S.B. 133

             1     

BENEFIT CORPORATION AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: John L. Valentine

             5     
House Sponsor: Keven J. Stratton

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies corporate provisions to enact the Benefit Corporation Act.
             10      Highlighted Provisions:
             11          This bill:
             12          .    enacts the Benefit Corporation Act, including:
             13              .    providing for the application and effect of chapter;
             14              .    defining terms;
             15              .    providing for incorporation as a benefit corporation;
             16              .    providing for election to become a benefit corporation;
             17              .    allowing for termination of benefit corporation status;
             18              .    addressing establishment of corporate purposes;
             19              .    imposing standards of conduct for directors;
             20              .    providing for a benefit director;
             21              .    imposing standards of conduct for officers;
             22              .    providing for a benefit officer;
             23              .    establishing a right of action;
             24              .    requiring an annual benefit report; and
             25              .    addressing availability of an annual benefit report; and
             26          .    makes technical and conforming changes.
             27      Money Appropriated in this Bill:


             28          None
             29      Other Special Clauses:
             30          None
             31      Utah Code Sections Affected:
             32      AMENDS:
             33           16-11-6 , as last amended by Laws of Utah 2010, Chapter 378
             34      ENACTS:
             35           16-10b-101 , Utah Code Annotated 1953
             36           16-10b-102 , Utah Code Annotated 1953
             37           16-10b-103 , Utah Code Annotated 1953
             38           16-10b-104 , Utah Code Annotated 1953
             39           16-10b-105 , Utah Code Annotated 1953
             40           16-10b-106 , Utah Code Annotated 1953
             41           16-10b-201 , Utah Code Annotated 1953
             42           16-10b-301 , Utah Code Annotated 1953
             43           16-10b-302 , Utah Code Annotated 1953
             44           16-10b-303 , Utah Code Annotated 1953
             45           16-10b-304 , Utah Code Annotated 1953
             46           16-10b-305 , Utah Code Annotated 1953
             47           16-10b-401 , Utah Code Annotated 1953
             48           16-10b-402 , Utah Code Annotated 1953
             49     
             50      Be it enacted by the Legislature of the state of Utah:
             51          Section 1. Section 16-10b-101 is enacted to read:
             52     
CHAPTER 10b. BENEFIT CORPORATION ACT

             53     
Part 1. General Provisions

             54          16-10b-101. Title.
             55          This chapter is known as the "Benefit Corporation Act."
             56          Section 2. Section 16-10b-102 is enacted to read:
             57          16-10b-102. Application and effect of chapter.
             58          (1) This chapter applies to a benefit corporation organized under this chapter.


             59          (2) The existence of a provision of this chapter does not of itself create an implication
             60      that a contrary or different rule of law is applicable to a business corporation that is not a
             61      benefit corporation. This chapter does not affect a statute or rule of law that is applicable to a
             62      business corporation that is not a benefit corporation.
             63          (3) (a) Except as otherwise provided in this chapter, Chapter 10a, Utah Revised
             64      Business Corporation Act, is applicable to a benefit corporation.
             65          (b) A benefit corporation may be subject simultaneously to this chapter and other
             66      chapters of this title, including Chapter 11, Professional Corporation Act.
             67          (c) This chapter controls over Chapter 10a, Utah Revised Business Corporation Act,
             68      and Chapter 11, Professional Corporation Act, or other laws.
             69          (4) The articles of incorporation or bylaws of a benefit corporation may not limit, be
             70      inconsistent with, or supersede a provision of this chapter.
             71          Section 3. Section 16-10b-103 is enacted to read:
             72          16-10b-103. Definitions.
             73          As used in this chapter:
             74          (1) "Annual benefit report" means a report required under Section 16-10b-401 .
             75          (2) "Benefit corporation" means a business corporation:
             76          (a) that elects to become subject to this chapter; and
             77          (b) the status of which as a benefit corporation has not been terminated.
             78          (3) "Benefit director" means the director designated as the benefit director of a benefit
             79      corporation under Section 16-10b-302 .
             80          (4) "Benefit enforcement proceeding" means a proceeding in a court of competent
             81      jurisdiction for:
             82          (a) failure of a benefit corporation to pursue or create general public benefit or a
             83      specific public benefit purpose set forth in its articles of incorporation; or
             84          (b) a violation of an obligation, duty, or standard of conduct under this chapter.
             85          (5) "Benefit officer" means the individual designated as the benefit officer of a benefit
             86      corporation under Section 16-10b-304 .
             87          (6) "Business corporation" means a corporation formed under Chapter 10a, Utah
             88      Revised Business Corporation Act, or Chapter 11, Professional Corporation Act.
             89          (7) "Division" means the Division of Corporations and Commercial Code.


             90          (8) "Executive officer" means:
             91          (a) a benefit corporation's president;
             92          (b) a vice president of the benefit corporation in charge of a principal business unit,
             93      division, or function; or
             94          (c) any other officer who performs a policy-making function for the benefit
             95      corporation.
             96          (9) "General public benefit" means a material positive impact on society and the
             97      environment:
             98          (a) taken as a whole;
             99          (b) assessed against a third-party standard; and
             100          (c) from the business of a benefit corporation.
             101          (10) "Immediate family" means a parent, spouse, surviving spouse, child, or sibling of
             102      a person.
             103          (11) (a) "Independent" means having no material relationship with a benefit
             104      corporation or a subsidiary of the benefit corporation.
             105          (b) Serving as a benefit director or benefit officer does not make an individual not
             106      independent.
             107          (c) A material relationship between an individual and a benefit corporation or any of its
             108      subsidiaries will be conclusively presumed to exist if one or more of the following apply:
             109          (i) the individual is, or has been within the last three years, an employee other than a
             110      benefit officer of the benefit corporation or a subsidiary of the benefit corporation;
             111          (ii) an immediate family member of the individual is, or has been within the last three
             112      years, an executive officer other than a benefit officer of the benefit corporation or a subsidiary
             113      of the benefit corporation; or
             114          (iii) there is beneficial or record ownership of 5% or more of the outstanding shares of
             115      the benefit corporation, calculated as if all outstanding rights to acquire equity interests in the
             116      benefit corporation had been exercised, by:
             117          (A) the individual; or
             118          (B) an entity of which the individual is a director, an officer, or a manager, or in which
             119      the individual owns beneficially or of record 5% or more of the outstanding equity interests,
             120      calculated as if all outstanding rights to acquire equity interests in the entity had been


             121      exercised.
             122          (12) "Minimum status vote" means:
             123          (a) in the case of a business corporation, in addition to any other required approval or
             124      vote, the satisfaction of the following conditions:
             125          (i) the shareholders of every class or series may vote as a separate voting group on the
             126      corporate action regardless of a limitation stated in the articles of incorporation or bylaws on
             127      the voting rights of a class or series; or
             128          (ii) the corporate action is required to be approved by vote of the shareholders of each
             129      class or series entitled to cast at least two-thirds of the votes that all shareholders of the class or
             130      series are entitled to cast on the action; or
             131          (b) in the case of a domestic entity other than a business corporation, in addition to any
             132      other required approval, vote, or consent, the satisfaction of the following conditions:
             133          (i) the holders of every class or series of equity interest in the entity that are entitled to
             134      receive a distribution of any kind from the entity may vote on or consent to the action
             135      regardless of any otherwise applicable limitation on the voting or consent rights of a class or
             136      series; or
             137          (ii) the action must be approved by vote or consent of the holders described in
             138      Subsection (12)(b)(i) entitled to cast at least two-thirds of the votes or consents that all of those
             139      holders are entitled to cast on the action.
             140          (13) "Publicly traded corporation" means a business corporation that has shares listed
             141      on a national securities exchange or traded in a market maintained by one or more members of
             142      a national securities association.
             143          (14) "Specific public benefit" includes:
             144          (a) providing low-income or underserved individuals or communities with beneficial
             145      products or services;
             146          (b) promoting economic opportunity for individuals or communities beyond the
             147      creation of jobs in the normal course of business;
             148          (c) protecting or restoring the environment;
             149          (d) improving human health;
             150          (e) promoting the arts, sciences, or advancement of knowledge;
             151          (f) increasing the flow of capital to entities with a purpose to benefit society or the


             152      environment; and
             153          (g) conferring any other particular benefit on society or the environment.
             154          (15) "Subsidiary" means, in relation to a person, an entity in which the person owns
             155      beneficially or of record 50% or more of the outstanding equity interests, calculated as if all
             156      outstanding rights to acquire equity interests in the entity had been exercised.
             157          (16) "Third-party standard" means a recognized standard for defining, reporting, and
             158      assessing corporate social and environmental performance that:
             159          (a) assesses the effect of the business and its operations upon the interests listed in
             160      Subsections 16-10b-301 (1)(a)(ii), (iii), (iv), and (v);
             161          (b) is developed by an entity that is not controlled by the benefit corporation;
             162          (c) is developed by an entity that both:
             163          (i) has access to necessary expertise to assess overall corporate social and
             164      environmental performance; and
             165          (ii) uses a balanced multistakeholder approach to develop the standard, including a
             166      reasonable public comment period; or
             167          (d) makes the following information publicly available:
             168          (i) about the standard:
             169          (A) the criteria considered when measuring the overall social and environmental
             170      performance of a business; and
             171          (B) the relative weightings, if any, of those criteria; and
             172          (ii) about the development and revision of the standard:
             173          (A) the identity of the directors, officers, material owners, and the governing body of
             174      the entity that developed and controls revisions to the standard;
             175          (B) the process by which revisions to the standard and changes to the membership of
             176      the governing body are made; or
             177          (C) an accounting of the revenue and sources of financial support for the entity, with
             178      sufficient detail to disclose a relationship that could reasonably be considered to present a
             179      potential conflict of interest.
             180          Section 4. Section 16-10b-104 is enacted to read:
             181          16-10b-104. Incorporation of benefit corporation.
             182          A person shall incorporate a benefit corporation in accordance with Chapter 10a, Part 2,


             183      Incorporation, but its articles of incorporation shall also state that it is a benefit corporation.
             184          Section 5. Section 16-10b-105 is enacted to read:
             185          16-10b-105. Election of benefit corporation status.
             186          (1) A business corporation may become a benefit corporation under this chapter by
             187      amending its articles of incorporation so that the articles of incorporation contain, in addition to
             188      the requirements of Section 16-10a-202 , a statement that the corporation is a benefit
             189      corporation. To be effective, the amendment must be adopted by at least the minimum status
             190      vote.
             191          (2) (a) Except as provided in Subsection (2)(b), if a domestic entity that is not a benefit
             192      corporation is a party to a merger or the exchanging entity in a share exchange and the
             193      surviving entity in the merger or share exchange is to be a benefit corporation, the plan of
             194      merger or share exchange must be approved by the domestic entity by at least the minimum
             195      status vote.
             196          (b) Subsection (2)(a) does not apply in the case of a corporation that is a party to a
             197      merger if the shareholders of the corporation are not entitled to vote on the merger pursuant to
             198      Section 16-10a-1104 .
             199          Section 6. Section 16-10b-106 is enacted to read:
             200          16-10b-106. Termination of benefit corporation status.
             201          (1) A benefit corporation may terminate its status as a benefit corporation and cease to
             202      be subject to this chapter by amending its articles of incorporation to delete the provision
             203      required by Section 16-10b-104 or 16-10b-105 to be stated in the articles of incorporation of a
             204      benefit corporation. To be effective, the amendment must be adopted by at least the minimum
             205      status vote.
             206          (2) (a) Except as provided in Subsection (2)(b), if a plan of merger or share exchange
             207      would have the effect of terminating the status of a business corporation as a benefit
             208      corporation, the plan must be adopted by at least the minimum status vote to be effective.
             209          (b) Subsection (2)(a) does not apply in the case of a corporation that is a party to a
             210      merger if the shareholders of the corporation are not entitled to vote on the merger pursuant to
             211      Section 16-10a-1104 .
             212          (3) A sale, lease, exchange, or other disposition of all or substantially all of the assets
             213      of a benefit corporation, unless the transaction is in the usual and regular course of business, is


             214      not effective unless the transaction is approved by at least the minimum status vote.
             215          Section 7. Section 16-10b-201 is enacted to read:
             216     
Part 2. Corporate Purposes

             217          16-10b-201. Corporate purposes.
             218          (1) A benefit corporation shall have a purpose of creating general public benefit. This
             219      purpose is in addition to its purpose under Section 16-10a-301 .
             220          (2) The articles of incorporation of a benefit corporation may identify one or more
             221      specific public benefits that it is the purpose of the benefit corporation to create in addition to
             222      its purposes under Section 16-10a-301 and Subsection (1). The identification of a specific
             223      public benefit under this Subsection (2) does not limit the purpose of a benefit corporation to
             224      create general public benefit under Subsection (1).
             225          (3) The creation of general public benefit and a specific public benefit under
             226      Subsections (1) and (2) is considered in the best interests of the benefit corporation.
             227          (4) A benefit corporation may amend its articles of incorporation to add, amend, or
             228      delete the identification of a specific public benefit that it is the purpose of the benefit
             229      corporation to create. To be effective, the amendment must be adopted by at least the
             230      minimum status vote.
             231          (5) A professional corporation that is a benefit corporation does not violate Section
             232      16-11-6 by having the purpose to create general public benefit or a specific public benefit.
             233          Section 8. Section 16-10b-301 is enacted to read:
             234     
Part 3. Accountability

             235          16-10b-301. Standard of conduct for directors.
             236          (1) Subject to Subsection (2), the board of directors, committees of the board of
             237      directors, and individual directors of a benefit corporation, in discharging the duties of their
             238      respective positions and in considering the best interests of the benefit corporation:
             239          (a) shall consider the effects of an action or inaction upon:
             240          (i) the shareholders of the benefit corporation;
             241          (ii) the employees and workforce of the benefit corporation, its subsidiaries, and its
             242      suppliers;
             243          (iii) the interests of customers as beneficiaries of the general public benefit or specific
             244      public benefit purposes of the benefit corporation;


             245          (iv) community and societal factors, including those of each community in which
             246      offices or facilities of the benefit corporation, its subsidiaries, or its suppliers are located;
             247          (v) the local and global environment;
             248          (vi) the short-term and long-term interests of the benefit corporation, including benefits
             249      that may accrue to the benefit corporation from its long-term plans and the possibility that these
             250      interests may be best served by the continued independence of the benefit corporation; and
             251          (vii) the ability of the benefit corporation to accomplish its general public benefit
             252      purpose and a specific public benefit purpose; and
             253          (b) may consider other pertinent factors or the interests of any other group that they
             254      consider appropriate.
             255          (2) (a) Subject to Subsection (2)(b), in discharging the duties of their respective
             256      positions and in considering the best interests of the benefit corporation, the board of directors,
             257      committees of the board of directors, and individual directors of a benefit corporation need not
             258      give priority to a particular interest or factor referred to in Subsection (1) over any other
             259      interest or factor.
             260          (b) Subsection (2)(a) does not apply if the benefit corporation has stated in its articles
             261      of incorporation its intention to give priority to certain interests or factors related to its
             262      accomplishment of its general public benefit purpose or of a specific public benefit purpose
             263      identified in its articles of incorporation.
             264          (3) The consideration of interests and factors in the manner required by Subsections (1)
             265      and (2) does not constitute a violation of Section 16-10a-840 .
             266          (4) Except as provided in the articles of incorporation or bylaws, a director is not
             267      personally liable for monetary damages for:
             268          (a) an action or inaction in the course of performing the duties of a director under
             269      Subsections (1) and (2) if the director performed the duties of office in compliance with
             270      Section 16-10a-840 and this section; or
             271          (b) failure of the benefit corporation to pursue or create general public benefit or
             272      specific public benefit.
             273          (5) A director does not have a duty to a person that is a beneficiary of the general
             274      public benefit purpose or a specific public benefit purpose of a benefit corporation arising from
             275      the status of the person as a beneficiary.


             276          Section 9. Section 16-10b-302 is enacted to read:
             277          16-10b-302. Benefit director.
             278          (1) The board of directors of a benefit corporation that is a publicly traded corporation
             279      shall, and the board of directors of any other benefit corporation may, include a director, who:
             280          (a) is designated the benefit director; and
             281          (b) shall have, in addition to the powers, duties, rights, and immunities of the other
             282      directors of the benefit corporation, the powers, duties, rights, and immunities provided in this
             283      chapter.
             284          (2) (a) A benefit director shall be elected, and may be removed, in the manner provided
             285      by Sections 16-10a-801 through 16-10a-810 .
             286          (b) Except as provided in Subsection (6), the benefit director shall be an individual
             287      who is independent.
             288          (c) The benefit director may serve as the benefit officer at the same time as serving as
             289      the benefit director.
             290          (d) The articles of incorporation or bylaws of a benefit corporation may prescribe
             291      additional qualifications of the benefit director not inconsistent with this Subsection (2).
             292          (3) The benefit director shall prepare, and the benefit corporation shall include in the
             293      annual benefit report to shareholders required by Section 16-10b-401 , the opinion of the benefit
             294      director on all of the following:
             295          (a) whether the benefit corporation acted in accordance with its general public benefit
             296      purpose and any specific public benefit purpose in all material respects during the period
             297      covered by the report;
             298          (b) whether the directors and officers complied with Subsections 16-10b-301 (1) and
             299      16-10b-303 (1), respectively; and
             300          (c) if, in the opinion of the benefit director, the benefit corporation or its directors or
             301      officers failed to act or comply in the manner described in Subsections (3)(a) and (b), a
             302      description of the ways in which the benefit corporation or its directors or officers failed to act
             303      or comply.
             304          (4) The act or inaction of an individual in the capacity of a benefit director shall
             305      constitute for all purposes an act or inaction of that individual in the capacity of a director of
             306      the benefit corporation.


             307          (5) Regardless of whether the articles of incorporation or bylaws of a benefit
             308      corporation include a provision eliminating or limiting the personal liability of directors
             309      authorized by Section 16-10a-841 , a benefit director may not be personally liable for an act or
             310      omission in the capacity of a benefit director unless the act or omission constitutes self-dealing,
             311      willful misconduct, or a knowing violation of law.
             312          (6) The benefit director of a professional corporation does not need to be independent.
             313          Section 10. Section 16-10b-303 is enacted to read:
             314          16-10b-303. Standard of conduct for officers.
             315          (1) An officer of a benefit corporation shall consider the interests and factors described
             316      in Subsection 16-10b-301 (1) in the manner provided in Subsections 16-10b-301 (1) and (2) if:
             317          (a) the officer has discretion to act with respect to a matter; and
             318          (b) it reasonably appears to the officer that the matter may have a material effect on the
             319      creation by the benefit corporation of general public benefit or a specific public benefit
             320      identified in the articles of incorporation of the benefit corporation.
             321          (2) The consideration of interests and factors in the manner described in Subsection (1)
             322      may not constitute a violation of Section 16-10a-831 or 16-10a-840 .
             323          (3) Except as provided in the articles of incorporation or bylaws of a benefit
             324      corporation, an officer is not personally liable for monetary damages for:
             325          (a) an action or inaction as an officer in the course of performing the duties of an
             326      officer under Subsection (1) if the officer performed the duties of the position in compliance
             327      with Section 16-10a-831 or 16-10a-840 and this section; or
             328          (b) failure of the benefit corporation to pursue or create general public benefit or
             329      specific public benefit.
             330          (4) An officer does not have a duty to a person that is a beneficiary of the general
             331      public benefit purpose or a specific public benefit purpose of a benefit corporation arising from
             332      the status of the person as a beneficiary.
             333          Section 11. Section 16-10b-304 is enacted to read:
             334          16-10b-304. Benefit officer.
             335          (1) A benefit corporation may have an officer designated as the benefit officer.
             336          (2) A benefit officer has:
             337          (a) the powers and duties relating to the purpose of the corporation to create general


             338      public benefit or specific public benefit provided:
             339          (i) by the bylaws; or
             340          (ii) absent controlling provisions in the bylaws, by resolutions or orders of the board of
             341      directors; and
             342          (b) the duty to prepare the benefit report required by Section 16-10b-401 .
             343          Section 12. Section 16-10b-305 is enacted to read:
             344          16-10b-305. Right of action.
             345          (1) Except in a benefit enforcement proceeding, a person may not bring an action or
             346      assert a claim against a benefit corporation or its directors or officers with respect to:
             347          (a) failure to pursue or create general public benefit or a specific public benefit set forth
             348      in its articles of incorporation; or
             349          (b) violation of an obligation, duty, or standard of conduct under this chapter.
             350          (2) A benefit corporation may not be liable for monetary damages under this chapter
             351      for a failure of the benefit corporation to pursue or create general public benefit or a specific
             352      public benefit.
             353          (3) (a) A benefit enforcement proceeding may be commenced or maintained only:
             354          (i) directly by the benefit corporation; or
             355          (ii) derivatively by:
             356          (A) a person or group of persons that owns beneficially or of record at least 2% of the
             357      total number of shares of a class or series outstanding at the time of the act or omission
             358      complained of;
             359          (B) a director;
             360          (C) a person or group of persons that own beneficially or of record 5% or more of the
             361      outstanding equity interests in an entity of which the benefit corporation is a subsidiary at the
             362      time of the act or omission complained of; or
             363          (D) other persons as specified in the articles of incorporation or bylaws of the benefit
             364      corporation.
             365          (b) A benefit corporation may provide in its articles of incorporation a greater degree of
             366      ownership by a person or group of persons than those listed under Subsection (3)(a) to bring a
             367      derivative action.
             368          (4) For purposes of this section, a person is the beneficial owner of shares or equity


             369      interests if the shares or equity interests are held in a voting trust or by a nominee on behalf of
             370      the beneficial owner.
             371          Section 13. Section 16-10b-401 is enacted to read:
             372     
Part 4. Transparency

             373          16-10b-401. Preparation of annual benefit report.
             374          (1) A benefit corporation shall prepare an annual benefit report that includes all of the
             375      following:
             376          (a) a narrative description of:
             377          (i) the ways in which the benefit corporation pursued general public benefit during the
             378      year and the extent to which general public benefit was created;
             379          (ii) (A) the ways in which the benefit corporation pursued a specific public benefit that
             380      the articles of incorporation state it is the purpose of the benefit corporation to create; and
             381          (B) the extent to which that specific public benefit was created; and
             382          (iii) circumstances that have hindered the creation by the benefit corporation of general
             383      public benefit or specific public benefit;
             384          (b) an assessment of the overall social and environmental performance of the benefit
             385      corporation against a third-party standard:
             386          (i) applied consistently with the application of that third-party standard in prior benefit
             387      reports; or
             388          (ii) accompanied by an explanation of the reasons for an inconsistent application;
             389          (c) the name of the benefit director and the benefit officer, if any, and the address to
             390      which correspondence to each of them may be directed;
             391          (d) the statement of the benefit director described in Subsection 16-10b-302 (3);
             392          (e) an identification of the third-party standard that will be used to prepare the next
             393      benefit report of the benefit corporation and a discussion of:
             394          (i) the process and rationale for selecting that third-party standard and, if it is different
             395      from the previous third-party standard used by the benefit corporation, the reasons for the
             396      change; and
             397          (ii) any connection between the organization that established the third-party standard,
             398      or its directors, officers, or a holder of 5% or more of the governance interests in the
             399      organization, and the benefit corporation or its directors, officers, or a holder of 5% or more of


             400      the outstanding shares of the benefit corporation, including a financial or governance
             401      relationship that might materially affect the credibility of the use of the third-party standard;
             402      and
             403          (f) if the benefit corporation has dispensed with, or restricted the discretion or powers
             404      of, the board of directors, a description of the persons that exercise the powers, duties, and
             405      rights and who have the immunities of the board of directors.
             406          (2) If, during the year covered by a benefit report, a benefit director resigns, refuses to
             407      stand for reelection to the position of benefit director, or is removed from the position of
             408      benefit director, and the benefit director furnishes the benefit corporation with written
             409      correspondence concerning the circumstances surrounding the resignation, refusal, or removal,
             410      the benefit report shall include that correspondence as an exhibit.
             411          (3) Neither the benefit report nor the assessment of the performance of the benefit
             412      corporation in the benefit report required by Subsection (1)(b) needs to be audited or certified
             413      by a third party.
             414          Section 14. Section 16-10b-402 is enacted to read:
             415          16-10b-402. Availability of annual benefit report.
             416          (1) A benefit corporation shall send its annual benefit report required by Section
             417      16-10b-401 to each shareholder on the earlier of:
             418          (a) 120 days following the end of the fiscal year of the benefit corporation; or
             419          (b) the same time that the benefit corporation delivers another annual report to its
             420      shareholders.
             421          (2) A benefit corporation shall post all of its benefit reports on the public portion of its
             422      Internet website, if any, but financial or proprietary information included in the benefit reports
             423      may be omitted from the benefit reports as posted.
             424          (3) If a benefit corporation does not have an Internet website, the benefit corporation
             425      shall provide a copy of its most recent benefit report, without charge, to a person that requests a
             426      copy, but financial or proprietary information included in the benefit report may be omitted
             427      from the copy of the benefit report provided.
             428          (4) (a) Concurrently with the delivery of the benefit report to shareholders under
             429      Subsection (2), the benefit corporation shall deliver a copy of the benefit report to the division
             430      for filing, but financial or proprietary information included in the benefit report may be omitted


             431      from the benefit report as delivered to the division.
             432          (b) The division shall charge a fee established by the division in accordance with
             433      Section 63J-1-504 for filing an annual benefit report.
             434          (c) The benefit corporation shall file the annual benefit report in addition to the annual
             435      report required by Section 16-10a-1603 .
             436          Section 15. Section 16-11-6 is amended to read:
             437           16-11-6. Purpose of professional corporation -- Power to own property and invest
             438      funds.
             439          (1) A professional corporation may be organized pursuant to the provisions of this [act]
             440      chapter only for the purpose of rendering one specific type of professional service and services
             441      ancillary [thereto] to the specific type of professional service and may not engage in any
             442      business other than rendering the professional service [which] that it was organized to render
             443      and services ancillary [thereto; provided, however, that] to the specific type of professional
             444      service.
             445          (2) Notwithstanding Subsection (1), a professional corporation may:
             446          (a) own real and personal property necessary or appropriate for rendering the type of
             447      professional service it was organized to render [and may];
             448          (b) invest its funds in real estate, mortgages, stocks, bonds, and any other type of
             449      investments[.]; and
             450          (c) if a benefit corporation, have as a purpose creating a general public benefit and a
             451      specific public benefit as provided in Chapter 10b, Benefit Corporation Act.




Legislative Review Note
    as of 1-21-14 9:44 AM


Office of Legislative Research and General Counsel


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