Benefit Corps Enacted

New York Authorizes the Incorporation of Benefit Corporations

December 21, 2011 – On December 12, Governor Cuomo signed legislation which will create a new class of corporations in New York whose purpose is to create a benefit for not just shareholders, but the community at large. These newly incorporated “benefit corporations” would have a “general public benefit” purpose, which is defined as a material, positive impact on society and the environment, as measured by a third-party standard, through activities that promote a combination of specific public benefits. By removing the legal impediments that may prevent directors or shareholders from pursuing a business model which results in social benefits, the new law will allow businesses to adopt higher standards of corporate purpose, accountability and transparency.