Delaware Passes A "Seismic Shift" Benefit Corporation Law - Generocity Philly


Jul. 19, 2013 2:45 pm

Delaware Passes A “Seismic Shift” Benefit Corporation Law

Delaware has been working on legislation to enable the formation of benefit corporations, a hybrid corporate form that balances public benefit with shareholder interest.

Delaware Governor Jack Markell after signing the bill.

Delaware has been working on legislation to enable the formation of benefit corporations, a hybrid corporate form that balances public benefit with shareholder interest.

Now, the bill has passed through the legislature and was signed Wednesday by Governor Jack Markell.

As Generocity reported in May, the mid-Atlantic region has the most states with benefit corporation laws in the country. New Jersey, Pennsylvania, New York, Maryland, Washington D.C. and Virginia have all passed some form of legislation.

Delaware is the 18th state nation-wide to enact a benefit corporation law, but many consider its addition a big win for the BCorp movement given that the state is home to 50 percent of all publicly-traded companies.

Investor Albert Wenger of Union Square Ventures provides remarks at the Delaware Signing Ceremony of benefit corporation legislation on July 17, 2013.

The cofounders of B Lab — a third party certifier that helped write the model bill that most states have referenced — responded to the passing of the Delaware law in Forbes magazine.

“It marks the coming home of a capitalism that returns business to its proper role in society to create shared and durable prosperity,” they said.

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Members of the Delaware Bar and Court of Chancery called the passage of the bill a “seismic shift” in U.S. corporate law, according to an official statement from B Lab released yesterday.

There are differences from the model bill though. The Delaware law does not require corporations to report on their environmental and social performance and then make that information available to the public.

Still, the Delaware law states that benefit corporations must “consider the interests of those materially affected by the operation of the corporation, in addition to the pecuniary interests of the stockholders of a Delaware corporation,” which is the central purpose of a benefit corporation.


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