Profit and Purpose: Two New Types of California Corporation that Promote Social as well as Financial Benefits


Effective January 1, 2012, California companies are able to incorporate under two new forms of corporation: the Benefit Corporation and the Flexible Purpose Corporation. These new corporate forms facilitate companies’ efforts to advance social welfare and environmental sustainability objectives while creating profits and value for their shareholders.

The primary purposes of traditional for-profit corporations are to promote long-term value growth and maximize shareholder profit. Other purposes, such as social benefit, should not conflict with these primary goals. Although some for-profit corporations are currently able to devote resources to advancing social benefit goals, these efforts must be balanced with the corporate directors’ mandate of maximizing growth and profit.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

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.

© K&L Gates LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.