Vermont Representative- Please Support S.263- The Vermont Benefit Corporations Act
What is a Benefit Corporation”?
A Benefit Corporation is a new corporate form offering entrepreneurs and investors the option to build and invest in businesses that meet high standards of corporate purpose, accountability and transparency. Fiduciary duty is redefined by requiring consideration of interests not only of shareholders, but also of the corporation’s employees and suppliers, the local and state economy, and the environment.
Why is this important to Vermont?
- Vermont can better serve those businesses which would benefit from the greater clarity provided regarding corporate purpose and fiduciary duties.
- Vermont can strengthen the Vermont brand by pioneering a new kind of corporation that benefits both society and shareholders.
- Vermont Benefit Corporations will be required to consider the community and employee impact of potential sale, merger and relocation decisions, giving directors protection to choose to remain independent and local.
- Vermont Benefit Corporations will be attractive to the increasing number of investors seeking greater transparency and social impact in their investments.
How would a Benefit Corporation differ from the current corporate model?
In three major ways:
- corporate purpose will include the creation of public benefit;
- directors’ fiduciary duties include consideration of non-financial interests; and
- transparency is increased through required public annual Benefit Report.
Can an existing corporation elect to become a Benefit Corporation?
Yes. The bill requires at least a two-thirds majority vote for an existing corporation to become a Benefit Corporation. This is a higher standard than the usual simple majority. It also contains comprehensive notice about the anticipated effect on shareholders
Would this law be a mandate?
No. The legislation would provide an option to new and existing companies --and their investors – to voluntarily adopt higher standards of corporate purpose, accountability, and transparency.
Who supports this legislation?
The list of Vermont business supporters is growing. Some of the early supporters included Chroma Technology, King Arthur Flour, Gardener’s Supply, Seventh Generation, Vermont Smoke and Cure, Clean Yield Assets Management, Chelsea Green Publishing, Small Dog Electronics, Green Mountain Power, and Main Street Landing.
Please Contact: Andrea Cohen, firstname.lastname@example.org.