Carolyn McMaster | July 18, 2013
Yesterday marked a historic moment in business: Delaware Gov. Jack Markell signed benefit corporation legislation, enabling companies in that state to form a legal business entity that holds the company accountable to social and environmental goals as well as profits. The Delaware Bar Association and Court of Chancery called the legislation a “seismic shift” in U.S. corporate law.
Delaware is the 18th state (plus the District of Columbia) to pass a benefit corporation law, but it’s the one that matters most to business leaders and investors, benefit corporation advocate B Lab noted in its announcement. One of the state’s key industries is incorporation—1 million entities are incorporated in Delaware, including half the country’s publicly owned companies and two-thirds of the Fortune 500—and this opens the door for these companies to bake sustainable operations and social and environmental missions into their legal documents.
“This is a very significant public policy issue,” Markell told the New York Times. “There is both a societal need and a market need.”
Neil Grimmer, CEO of San Francisco–based Plum Organics, was on hand at the signing ceremony to announce that he is filing in Delaware as a publicly owned company. The first day open to filers is Aug. 1.
Thinkshift became a benefit corporation Jan. 3, 2012, with the first wave of California companies. Other states that allow benefit corps are Arizona, Arkansas, Colorado, Hawai’i, Illinois, Louisiana, Maryland, Massachusetts, Nevada, Oregon, New Jersey, New York, Oregon, Pennsylvania, South Carolina and Vermont; 11 more states are working on it. For more about benefit corporations, visit http://www.bcorporation.net/what-are-b-corps/legislation.
More info about the Delaware law: