Proposed Minnesota Public Benefit Corporation Legislation

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A bill has been introduced to bring public benefit corporations to Minnesota.  The public benefit corporation is a relatively recent legal innovation that occupies a hybrid position between a traditional corporation and a non-profit corporation.  A public benefit corporation requires directors to consider the impacts of corporate action on either all stakeholders in general or on a specific group of stakeholders, in addition to merely considering the impact on shareholders.  At the same time, a public benefit corporation operates for profit and can confer pecuniary gain upon its shareholders (something not possible in a non-profit corporation).  While these effects can be achieved through contractual modifications under current law, the proposed legislation provides a formal and standard model for such enterprises and allows them to be easily distinguished by consumers and commercial partners from traditional for-profit corporations.  Nineteen other states, including Delaware, have adopted some form of public benefit corporation legislation.

You can find more information here.

Topics:  Public Benefit Corporation

Published In: Business Organization Updates, General Business Updates, Nonprofits Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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