The Corporation Law Section of the Delaware State Bar Association is considering proposed legislation amending the Delaware General Corporation Law and related sections of Title 8 of the Delaware Code to, among other things, add "public benefit corporations" as a new form of corporate entity. Public benefit corporations are defined, generally, as for-profit corporations organized to produce certain "public benefits" (e.g., charitable, artistic, social or educational goals), and which operate in a responsible and sustainable manner. As distinguished from directors in traditional for-profit corporations, directors of a public benefit corporation may consider the public benefits for which the corporation was formed, and balance those benefits against the interests of its stockholders and other persons and entities affected by the corporation's actions. Directors in a traditional for-profit corporation must, generally, focus on the interests of the corporation and its stockholders. According to the proposed legislation, directors of a public benefit corporation will be deemed to have satisfied their fiduciary duties in balancing the interests of multiple parties, if their decisions are informed and disinterested. The proposed legislation would permit an existing corporation to convert to a public benefit corporation upon obtaining the approval of at least 90% of the holders of each class of the corporation's issued and outstanding stock. The conversion would also entitle dissenting shareholders to appraisal rights with respect to their shares.
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Delaware State Bar considers proposal to create "public benefit corporations" under Delaware General Corporation Law
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