To: Rep. McKell, M.,
Subject: Please support S.B. 133 Benefit Corporation Amendments, endorsement letter and fact sheet
February 13, 2014
Dear Representative McKell,
As business leaders in the great state of Utah, we are writing to express our support for benefit corporation legislation S.B. 133, chief sponsor Senator John Valentine and co-sponsor Senator Pat Jones, to ask you to support it as well. The legislation will create a new corporate entity, the benefit corporation. A benefit corporation is a new corporate entity offering entrepreneurs and investors the option to build and invest in businesses that meet higher standards of corporate purpose, accountability, and transparency.
In a traditional corporation, fiduciary duty focuses exclusively on increasing shareholder profits. In the case of benefit corporations, fiduciary duty is redefined through a statement that the creation of public benefit is in the best interests of the benefit corporation. This allows corporate officers to define other goals beyond profit making and, in turn, gives investors the power to require those officers to make decisions that reflect those goals, even when they lower profitability.
We believe that benefit corporation legislation is a cost free tool that will support economic development, while it opens up the free market and deregulates corporate purpose, as well as brings considerable improvements to the state of Utah. Benefit corporation legislation supports entrepreneurship and fosters greater impact investment in our local companies and communities and encourages companies to incorporate in our state. States that welcome these new businesses will be poised for growth.
Please support the creation of benefit corporations in Utah by supporting S.B. 133.
Sincerely, the following business associations, businesses and entrepreneurs:
Economic Development Corporation of Utah
Salt Lake Chamber
Utah Valley Chamber of Commerce
Adjacent Consulting, organization development
ASG Advisors, social impact consulting
Be Locally SEO, web design
Classy Chasis, auto restoration
Cole Holland College, health profession training
Cotopaxi, recreation equipment retailing
DwellTek, solar installation
Goal Zero, solar generators
Impact Hub Salt Lake, social enterprise center
Kenner Kingston, commercial architect
Klass Strategies, management consulting
Laziz Foods, specialty food production
Lotus Community Development Consulting
Responsible Asset Management, brokerage
Rising Summits, consulting to nonprofits
Sorenson Global Impact Fund
Spa Secrets 4 You, cosmetics manufacturing
Sustainable StartUps, business accelerator
Sustain3, employee engagement services
Third Sun Productions, web design
Treasure Mountain Inn
Underfoot Floors, flooring materials
Valley Services, staffing services
Xmission, Internet services
Richard Young, Environmental Engineer
FACT SHEET – S.B. 133
Benefit Corporation Amendments
Chief Sponsor John Valentine, Co-Sponsor Pat Jones
House Sponsor Representative Keven Stratton
Legislation to Allow Optional Benefit Corporation Registration in Utah
February 13, 2014
Passage of this law would
· Establish a new optional form of state business registration for new or existing businesses.
· Expand legal protection for corporations interested in producing greater positive social and environmental outcomes through their commercial operations.
· Provide transparency on attainment of these benefits to wider group of stakeholders beyond owners.
· Allow expanded provision of public benefits by business as an alternative to expanding government.
· Help Utah compete: 20 states have adopted this new form of business and 16 others are considering it.
· NOT have any tax consequences.
Opportunity to register as a benefit corporation in Utah would
· Expand business owner freedom to align their corporate form with their community-supporting values.
· Aid Utah businesses in attracting the growing market component of consumers who desire to support companies that produce significant positive social and environmental outcomes.
· Provide adequate legal protection for Utah businesses to access impact investing revenue streams.
· Assist businesses to protect their values when selling a businesses, allowing a corporation to take the best overall offer, rather than being forced to take the most financially lucrative offer. This will also help keep businesses that are built in Utah from leaving the state once they grow and succeed.
· Increase businesses flexibility to address public challenges and reduce pressure to expand government.
Requirements for participating companies are minimal and reasonable
· Articles of incorporation would document intent of the company to provide public benefits.
· An annual benefits report enumerating these benefits would be posted for public to view.
· Benefits would be reported according to a third party standard chosen by the company.
Adoption and implementation would be relatively easy and cost effective because
· Enabling this new business type would require only minor changes to state forms and website.
· No new staff, extensive regulations, enforcement capability or significant costs would be required.
Allowing benefit corporation registration is good for business AND the public