Legislation was signed into law on October 24, 2012 making Pennsylvania the twelfth state to formally add the Benefit Corporation to its list of legal business entities. Fifteen other states are currently working through the details of adding a variation of the Benefit Corporation to their options for legal business entities as well. A Benefit Corporation is a for-profit corporation that will operate in a manner that has a positive impact on both the environment and society.
What are the major distinctions of a Benefit Corporation?
- The corporation’s stated purpose includes having a material positive impact on society and the environment.
- The duties of directors are expanded to require consideration of nonfinancial stakeholders as well as the financial interests of shareholders.
- An obligation to report on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard.
This article appeared in the July 2013 issue of Business Matters. For more articles related to Pittsburgh’s north hills you can subscribe here.