Benefit corporations approved

Senators passed a bill March 27 that allows a business corporation to become a benefit corporation.

Lincoln Sen. Danielle Conrad introduced LB751, which allows a business corporation to become a benefit corporation by a two-thirds vote of each class of shareholders.

The bill defines a benefit corporation as a domestic business corporation that creates a general public benefit, including:
• providing low-income or underserved individuals with benefit products or services;
• promoting economic opportunity for individuals in communities beyond creation of jobs in normal courses of business;
• protecting or restoring the environment;
• improving public health;
• promoting the arts, sciences or advancement of knowledge;
• increasing the flow of capital to entities with a purpose to benefit society or the environment; and
• conferring any other particular benefit on society or the environment.

Under LB751, the benefit director is required to submit an annual report to shareholders explaining whether or not the corporation’s actions were in accordance with its stated public benefit purposes. The report will describe the ability of the corporation to achieve its general public benefit purpose and the impact of its actions on shareholders, employees and customers.

Senators passed the bill on a 44-0 vote.