Vermont Benefits Corporation Act
Vermont Benefits Corporation Act
As of this writing (5/3), it appears that S.263, the “Vermont Benefits Corporations Act”, will become law and establish a new corporate form in Vermont. The House amended S. 263 but it is likely the Senate will concur in the House amendments and that Governor Douglas will sign the bill. If that occurs, Vermont will be the second state (after Maryland) to adopt “benefit” corporation legislation. The incubator of this legislation in B Lab, a Philadelphia based non-profit which has developed the “B” corporation rating system (not to be confused with a benefit corporation which is a creature of statute), which evaluates companies on social, environmental and workplace criteria.
The new legislation, which in the House amendments becomes effective on July 1, 2011, permits any corporation incorporating in Vermont to designate itself as a “benefit” corporation and permits existing corporations to be opt-in as “benefit” corporations, subject to approval by at least 2/3 of the outstanding shares. The new legislation provides for a “benefit director” and a “benefit officer”, modifies the standard of conduct for directors of benefit corporations and requires an annual benefit report. The Vermont Bar Association will be hosting a continuing education seminar on May 28th that will include a presentation by Ken Merritt on the new legislation.
