Legal Framework

The B Corporation legal framework bakes your values into the DNA of the company so they can better survive new management, new investors or even new ownership. Following is a summary and step-by-step guide

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Summary

Objective: Expand the responsibilities of the corporation to include consideration of the interests of employees, consumers, the community, and the environment.

• Give legal permission and protection to officers and directors to consider all stakeholders, not just shareholders

• Create additional rights for shareholders to hold directors and officers accountable to these interests

• Limit these expanded rights to shareholders exclusively -- non-shareholders are explicitly not empowered with a new right of action

Step-by-Step Guide

1. Amend your governing documents (e.g., Articles of Incorporation, Membership Agreement, Partnership Agreement) to redefine the best interests of the corporation to include the consideration of employees, consumers, the community and the environment

2. Obtain board / governing body approval of your amended governing documents

3. Obtain shareholder / member / partner approval, requiring a majority / super-majority vote, depending on your state of incorporation/operating agreement

4. File your amended articles with the Secretary of State (only for C or S Corporations; unnecessary for LLC's and LLP's)

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