The following words and phrases when used in this subchapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:
"Benefit company."A limited liability company that is subject to this subchapter.
"Benefit enforcement proceeding."A claim or action for:
(1) failure to pursue or create the general public benefit purpose of the benefit company or any specific public benefit purpose set forth in its certificate of organization; or
(2) violation of any obligation, duty or standard of conduct under this subchapter.
"General public benefit."A material positive impact on society and the environment, taken as a whole and assessed against a third-party standard, from the business and operations of a benefit company.
"Independent."When a person has no material relationship with a benefit company or any of its subsidiaries. A material relationship between an individual and a benefit company or any of its subsidiaries will be conclusively presumed to exist if:
(1) the person is or has been within the last three years an employee of the benefit company or any of its subsidiaries;
(2) an immediate family member of the person is or has been within the last three years an executive officer of the benefit company or any of its subsidiaries; or
(3) the person, or an association of which the person is a governor or officer or in which the person owns beneficially or of record 5% or more of the outstanding interests, owns beneficially or of record 5% or more of the outstanding interests of the benefit company. The percentage of ownership in an association shall be calculated as if all outstanding rights to acquire interests in the association had been exercised.
"Minimum status vote."As follows:
(1) In the case of a limited liability company, in addition to any other required approval or vote, the satisfaction of the following conditions:
(i) The members of every class or series must be entitled, as a class, to vote on the action regardless of a limitation stated in the certificate of organization or operating agreement on the voting rights of any class or series.
(ii) The action must be approved by a vote of the members of each class or series entitled to cast at least two-thirds of the votes that all members of the class or series are entitled to cast on the action.
(2) In the case of a domestic association other than a limited liability company, in addition to any other required approval, vote or consent, the satisfaction of the following conditions:
(i) The holders of every class or series of interest in the association that are entitled to receive a distribution of any kind from the association must be entitled as a class to vote on or consent to the action regardless of any otherwise applicable limitation on the voting or consent rights of any class or series.
(ii) The action must be approved by vote or consent of the holders described in subparagraph (i) entitled to cast at least two-thirds of the votes or consents that all of those holders are entitled to cast on the action.
"Specific public benefit."The term shall have the meaning specified in section 3302 (relating to definitions).
"Subsidiary."The term shall have the meaning specified in section 3302.
"Third-party standard."A standard for defining, reporting and assessing overall social and environmental performance which is:
(1) Comprehensive in that it assesses the effect of the business and its operations upon the interests listed in section 8895(a)(1)(ii), (iii), (iv) and (v) (relating to standard of conduct for members).
(2) Developed by an organization that is independent of the benefit company and satisfies the following requirements:
(i) Not more than one-third of the members of the governing body of the organization are representatives of any of the following:
(A) An association of businesses operating in a specific industry the performance of whose members is measured by the standard.
(B) Businesses from a specific industry or an association of businesses in that industry.
(C) Businesses whose performance is assessed against the standard.
(ii) The organization is not materially financed by an association or business described in subparagraph (i).
(3) Credible because the standard is developed by a person that both:
(i) Has access to necessary expertise to assess overall social and environmental performance.
(ii) Uses a balanced multistakeholder approach, including a public comment period of at least 30 days to develop the standard.
(4) Transparent because the following information is publicly available:
(i) About the standard:
(A) The criteria considered when measuring the overall social and environmental performance of a business.
(B) The relative weightings, if any, of those criteria.
(ii) About the development and revision of the standard:
(A) The identity of the directors, officers, material owners and the governing body of the organization that developed and controls revisions to the standard.
(B) The process by which revisions to the standard and changes to the membership of the governing body are made.
(C) An accounting of the sources of financial support for the organization, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest.