§ 1702 — Definitions

§ 1702. Definitions.\n As used in this article, unless the context otherwise requires, the\nterm:\n (a) "Benefit corporation" means a business corporation incorporated\nunder this article and whose status as a benefit corporation has not\nbeen terminated as provided in this article.\n (b) "General public benefit" means a material positive impact on\nsociety and the environment, taken as a whole, assessed against a\nthird-party standard, from the business and operations of a benefit\ncorporation.\n (c) "Independent" means that a person has no material relationship\nwith a benefit corporation or any of its subsidiaries. A material\nrelationship between a person and a benefit corporation or any of its\nsubsidiaries will be conclusively presumed to exist if:\n (1) the person is, or has been within the last three years, an\nemployee of the benefit corporation or any of its subsidiaries;\n (2) an immediate family member of the person is, or has been within\nthe last three years, an executive officer of the benefit corporation or\nany of its subsidiaries; or\n (3) the person, or an entity of which the person is a director,\nofficer or other manager or in which the person owns beneficially or of\nrecord five percent or more of the equity interests, owns beneficially\nor of record five percent or more of the shares of the benefit\ncorporation. A percentage of ownership in an entity shall be calculated\nas if all outstanding rights to acquire equity interests in the entity\nhad been exercised.\n (d) "Minimum status vote" means that, in addition to any other\napproval or vote required by this chapter, the certificate of\nincorporation or a bylaw adopted by the shareholders:\n (1) The holders of shares of every class or series that are entitled\nto vote on the corporate action shall be entitled to vote as a class on\nthe corporate action; and\n (2) The corporate action must be approved by vote of the shareholders\nof each class or series entitled to cast at least three-quarters of the\nvotes that all shareholders of the class or series are entitled to cast\nthereon.\n (e) "Specific public benefit," includes:\n (1) providing low-income or underserved individuals or communities\nwith beneficial products or services;\n (2) promoting economic opportunity for individuals or communities\nbeyond the creation of jobs in the normal course of business;\n (3) preserving the environment;\n (4) improving human health;\n (5) promoting the arts, sciences or advancement of knowledge;\n (6) increasing the flow of capital to entities with a public benefit\npurpose; and\n (7) the accomplishment of any other particular benefit for society or\nthe environment.\n (f) "Subsidiary" means an entity in which a person owns beneficially\nor of record fifty percent or more of the equity interests. A percentage\nof ownership in an entity shall be calculated as if all outstanding\nrights to acquire equity interests in the entity had been exercised.\n (g) "Third-party standard" means a recognized standard for defining,\nreporting and assessing general public benefit that is:\n (1) developed by a person that is independent of the benefit\ncorporation; and\n (2) transparent because the following information about the standard\nis publicly available:\n (A) the factors considered when measuring the performance of a\nbusiness;\n (B) the relative weightings of those factors; and\n (C) the identity of the persons who developed and control changes to\nthe standard and the process by which those changes are made.\n