A4692A-2011 Actions

• Jun 17, 2011: substituted by s79a
• Jun 17, 2011: rules report cal.395
• Jun 17, 2011: reported
• Jun 16, 2011: reported referred to rules
• Jun 14, 2011: reported referred to codes
• Jun 10, 2011: print number 4692a
• Jun 10, 2011: amend and recommit to corporations, authorities and commissions
• Feb 4, 2011: referred to corporations, authorities and commissions

A4692A-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 4692--A
 2011-2012 Regular Sessions
 I N  ASSEMBLY
 February 4, 2011
 
 Introduced  by  M.  of  A.  SILVER, BRENNAN, KAVANAGH, ROSENTHAL, GALEF,
 LIFTON, NOLAN, CORWIN -- read once and referred to  the  Committee  on
 Corporations,  Authorities  and  Commissions  -- committee discharged,
 bill amended, ordered reprinted as amended  and  recommitted  to  said
 committee
 AN  ACT  to  amend  the general construction law and the business corpo
 ration law, in relation to authorizing the  incorporation  of  benefit
 corporations,  providing for the public benefit to be created by bene
 fit corporations, for the election and termination of the status of  a
 benefit  corporation,  for the standards of conduct for directors of a
 benefit corporation, and for the preparation and  distribution  of  an
 annual benefit report by a benefit corporation
 

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1. Paragraphs 3 and 4 of subdivision d of section  65  of  the
 general  construction  law,  as added by chapter 451 of the laws of 1973
 are amended and a new paragraph 5 is added to read as follows:

 3. A railroad corporation, [or]
 4. A transportation corporation[.], OR
 5. A BENEFIT CORPORATION.
 

S 2.

Section 66 of the general construction law is amended by adding a
 new subdivision 4-a to read as follows:

 4-A. A "BENEFIT CORPORATION" MEANS A BUSINESS CORPORATION INCORPORATED
 UNDER ARTICLE SEVENTEEN OF THE BUSINESS CORPORATION LAW AND WHOSE STATUS
 AS A BENEFIT CORPORATION HAS NOT BEEN TERMINATED AS PROVIDED IN  ARTICLE
 SEVENTEEN OF THE BUSINESS CORPORATION LAW.
 

S  3.  The business corporation law is amended by adding a new article
 17 to read as follows:

 ARTICLE 17
 BENEFIT CORPORATIONS
 SECTION 1701. APPLICATION AND EFFECT OF ARTICLE.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD01470-03-1
 
       A. 4692--A                          2
 1702. DEFINITIONS.
 1703. FORMATION OF BENEFIT CORPORATIONS.
 1704. ELECTION  OF  AN EXISTING BUSINESS CORPORATION TO BECOME A
 BENEFIT CORPORATION.
 1705. TERMINATION OF BENEFIT CORPORATION STATUS.
 1706. CORPORATE PURPOSES.
 1707. STANDARD OF CONDUCT FOR DIRECTORS AND OFFICERS.
 1708. ANNUAL BENEFIT REPORT.
 1709. CONSPICUOUS LANGUAGE ON THE FACE OF CERTIFICATES.
 

S 1701. APPLICATION AND EFFECT OF ARTICLE.
 (A) THIS ARTICLE SHALL BE APPLICABLE TO ALL BENEFIT CORPORATIONS.
 (B) THE EXISTENCE OF A PROVISION OF THIS ARTICLE SHALL NOT  OF  ITSELF
 CREATE  ANY  IMPLICATION  THAT A CONTRARY OR DIFFERENT RULE OF LAW IS OR
 WOULD BE APPLICABLE TO A BUSINESS CORPORATION  THAT  IS  NOT  A  BENEFIT
 CORPORATION.  THIS  ARTICLE  SHALL NOT AFFECT ANY STATUTE OR RULE OF LAW
 THAT IS OR WOULD BE APPLICABLE TO A BUSINESS CORPORATION THAT IS  NOT  A
 BENEFIT CORPORATION.
 (C)  EXCEPT  AS OTHERWISE PROVIDED IN THIS ARTICLE, THIS CHAPTER SHALL
 BE APPLICABLE TO ALL BENEFIT CORPORATIONS.  THE SPECIFIC  PROVISIONS  OF
 THIS ARTICLE SHALL CONTROL OVER THE GENERAL PROVISIONS OF THIS CHAPTER.
 (D)  A  PROVISION  OF  THE CERTIFICATE OF INCORPORATION OR BYLAWS OF A
 BENEFIT CORPORATION MAY NOT RELAX, BE INCONSISTENT WITH OR SUPERSEDE ANY
 PROVISION OF THIS ARTICLE.
 

S 1702. DEFINITIONS.
 AS USED IN THIS ARTICLE, UNLESS THE CONTEXT  OTHERWISE  REQUIRES,  THE
 TERM:

 (A)  "BENEFIT  CORPORATION"  MEANS A BUSINESS CORPORATION INCORPORATED
 UNDER THIS ARTICLE AND WHOSE STATUS AS A  BENEFIT  CORPORATION  HAS  NOT
 BEEN TERMINATED AS PROVIDED IN THIS ARTICLE.
 (B) "GENERAL PUBLIC BENEFIT" MEANS A MATERIAL POSITIVE IMPACT ON SOCI
 ETY AND THE ENVIRONMENT, TAKEN AS A WHOLE, ASSESSED AGAINST A THIRD-PAR
 TY STANDARD, FROM THE BUSINESS AND OPERATIONS OF A BENEFIT CORPORATION.
 (C)  "INDEPENDENT"  MEANS  THAT  A PERSON HAS NO MATERIAL RELATIONSHIP
 WITH A BENEFIT CORPORATION OR ANY  OF  ITS  SUBSIDIARIES.    A  MATERIAL
 RELATIONSHIP  BETWEEN  A  PERSON AND A BENEFIT CORPORATION OR ANY OF ITS
 SUBSIDIARIES WILL BE CONCLUSIVELY PRESUMED TO EXIST IF:

 (1) THE PERSON IS, OR HAS BEEN WITHIN THE LAST THREE YEARS, AN EMPLOY
 EE OF THE BENEFIT CORPORATION OR ANY OF ITS SUBSIDIARIES;
 (2) AN IMMEDIATE FAMILY MEMBER OF THE PERSON IS, OR  HAS  BEEN  WITHIN
 THE LAST THREE YEARS, AN EXECUTIVE OFFICER OF THE BENEFIT CORPORATION OR
 ANY OF ITS SUBSIDIARIES; OR
 (3)  THE PERSON, OR AN ENTITY OF WHICH THE PERSON IS A DIRECTOR, OFFI
 CER OR OTHER MANAGER OR IN WHICH THE  PERSON  OWNS  BENEFICIALLY  OR  OF
 RECORD  FIVE  PERCENT OR MORE OF THE EQUITY INTERESTS, OWNS BENEFICIALLY
 OR OF RECORD FIVE PERCENT OR MORE OF THE SHARES OF  THE  BENEFIT  CORPO
 RATION.    A PERCENTAGE OF OWNERSHIP IN AN ENTITY SHALL BE CALCULATED AS
 IF ALL OUTSTANDING RIGHTS TO ACQUIRE EQUITY INTERESTS IN THE ENTITY  HAD
 BEEN EXERCISED.
 (D)  "MINIMUM  STATUS  VOTE"  MEANS  THAT,  IN  ADDITION  TO ANY OTHER
 APPROVAL OR VOTE REQUIRED BY THIS CHAPTER, THE CERTIFICATE  OF  INCORPO
 RATION OR A BYLAW ADOPTED BY THE SHAREHOLDERS:

 (1)  THE  HOLDERS OF SHARES OF EVERY CLASS OR SERIES THAT ARE ENTITLED
 TO VOTE ON THE CORPORATE ACTION SHALL BE ENTITLED TO VOTE AS A CLASS  ON
 THE CORPORATE ACTION; AND
 (2)  THE CORPORATE ACTION MUST BE APPROVED BY VOTE OF THE SHAREHOLDERS
 OF EACH CLASS OR SERIES ENTITLED TO CAST AT LEAST THREE-QUARTERS OF  THE
 
       A. 4692--A                          3
 VOTES  THAT ALL SHAREHOLDERS OF THE CLASS OR SERIES ARE ENTITLED TO CAST
 THEREON.
 (E) "SPECIFIC PUBLIC BENEFIT," INCLUDES:

 (1)  PROVIDING  LOW-INCOME  OR  UNDERSERVED INDIVIDUALS OR COMMUNITIES
 WITH BENEFICIAL PRODUCTS OR SERVICES;
 (2) PROMOTING ECONOMIC  OPPORTUNITY  FOR  INDIVIDUALS  OR  COMMUNITIES
 BEYOND THE CREATION OF JOBS IN THE NORMAL COURSE OF BUSINESS;
 (3) PRESERVING THE ENVIRONMENT;
 (4) IMPROVING HUMAN HEALTH;
 (5) PROMOTING THE ARTS, SCIENCES OR ADVANCEMENT OF KNOWLEDGE;
 (6)  INCREASING  THE FLOW OF CAPITAL TO ENTITIES WITH A PUBLIC BENEFIT
 PURPOSE; AND
 (7) THE ACCOMPLISHMENT OF ANY OTHER PARTICULAR BENEFIT FOR SOCIETY  OR
 THE ENVIRONMENT.
 (F)  "SUBSIDIARY"  MEANS AN ENTITY IN WHICH A PERSON OWNS BENEFICIALLY
 OR OF RECORD FIFTY PERCENT OR MORE OF THE EQUITY INTERESTS.  A  PERCENT
 AGE  OF OWNERSHIP IN AN ENTITY SHALL BE CALCULATED AS IF ALL OUTSTANDING
 RIGHTS TO ACQUIRE EQUITY INTERESTS IN THE ENTITY HAD BEEN EXERCISED.
 (G) "THIRD-PARTY STANDARD" MEANS A RECOGNIZED STANDARD  FOR  DEFINING,
 REPORTING AND ASSESSING GENERAL PUBLIC BENEFIT THAT IS:

 (1)  DEVELOPED  BY  A PERSON THAT IS INDEPENDENT OF THE BENEFIT CORPO
 RATION; AND
 (2) TRANSPARENT BECAUSE THE FOLLOWING INFORMATION ABOUT  THE  STANDARD
 IS PUBLICLY AVAILABLE:

 (A)  THE  FACTORS CONSIDERED WHEN MEASURING THE PERFORMANCE OF A BUSI
 NESS;
 (B) THE RELATIVE WEIGHTINGS OF THOSE FACTORS; AND
 (C) THE IDENTITY OF THE PERSONS WHO DEVELOPED AND CONTROL  CHANGES  TO
 THE STANDARD AND THE PROCESS BY WHICH THOSE CHANGES ARE MADE.
 

S 1703. FORMATION OF BENEFIT CORPORATIONS.
 A  BENEFIT CORPORATION SHALL BE FORMED IN ACCORDANCE WITH THIS CHAPTER
 EXCEPT THAT ITS CERTIFICATE OF INCORPORATION SHALL ALSO STATE THAT IT IS
 A BENEFIT CORPORATION.
 

S 1704. ELECTION OF AN EXISTING BUSINESS CORPORATION TO BECOME A BENEFIT
 CORPORATION.
 (A) A BUSINESS CORPORATION MAY BECOME A BENEFIT CORPORATION UNDER THIS
 ARTICLE BY AMENDING ITS CERTIFICATE OF INCORPORATION SO THAT IT CONTAINS
 A STATEMENT THAT THE CORPORATION IS A BENEFIT CORPORATION. THE AMENDMENT
 SHALL NOT BE EFFECTIVE UNLESS IT IS ADOPTED  BY  AT  LEAST  THE  MINIMUM
 STATUS VOTE.
 (B)  ANY CORPORATION THAT IS NOT A BENEFIT CORPORATION THAT IS A PARTY
 TO A MERGER OR CONSOLIDATION IN  WHICH  THE  SURVIVING  OR  CONSOLIDATED
 CORPORATION WILL BE A BENEFIT CORPORATION MUST APPROVE THE PLAN OF MERG
 ER  OR  CONSOLIDATION BY AT LEAST THE MINIMUM STATUS VOTE IN ADDITION TO
 ANY OTHER VOTE REQUIRED BY THIS CHAPTER,  THE  CERTIFICATE  OF  INCORPO
 RATION OR THE BYLAWS.
 (C) ANY CORPORATION THAT IS NOT A BENEFIT CORPORATION THAT IS PARTY TO
 A  MERGER  OR CONSOLIDATION IN WHICH SHARES OF STOCK OF SUCH CORPORATION
 WILL BE CONVERTED INTO A RIGHT TO RECEIVE SHARES OF STOCK OF  A  BENEFIT
 CORPORATION MUST APPROVE THE PLAN OF MERGER OR CONSOLIDATION BY AT LEAST
 THE  MINIMUM  STATUS VOTE IN ADDITION TO ANY OTHER VOTE REQUIRED BY THIS
 CHAPTER, THE CERTIFICATE OF INCORPORATION OR THE BYLAWS.
 

S 1705. TERMINATION OF BENEFIT CORPORATION STATUS.
 (A) A BENEFIT CORPORATION MAY TERMINATE ITS STATUS AS SUCH  AND  CEASE
 TO  BE  SUBJECT  TO THIS ARTICLE BY AMENDING ITS CERTIFICATE OF INCORPO
 RATION TO DELETE THE STATEMENT THAT THE CORPORATION IS A BENEFIT  CORPO
 
       A. 4692--A                          4
 RATION.  THE AMENDMENT SHALL NOT BE EFFECTIVE UNLESS IT IS ADOPTED BY AT
 LEAST THE MINIMUM STATUS VOTE.
 (B)  IF  A BENEFIT CORPORATION IS A PARTY TO A MERGER OR CONSOLIDATION
 IN WHICH THE SURVIVING OR NEW CORPORATION WILL NOT BE A  BENEFIT  CORPO
 RATION,  THE  PLAN  OF  MERGER  OR  CONSOLIDATION SHALL NOT BE EFFECTIVE
 UNLESS IT IS ADOPTED BY AT LEAST THE MINIMUM STATUS VOTE IN ADDITION  TO
 ANY  OTHER  VOTE  REQUIRED  BY THIS CHAPTER, THE CERTIFICATE OF INCORPO
 RATION OR THE BYLAWS.
 (C) ANY BENEFIT CORPORATION THAT IS PARTY TO A MERGER OR CONSOLIDATION
 IN WHICH SHARES OF STOCK OF SUCH BENEFIT CORPORATION WILL  BE  CONVERTED
 INTO  A  RIGHT TO RECEIVE SHARES OF STOCK OF A CORPORATION THAT IS NOT A
 BENEFIT CORPORATION MUST APPROVE THE PLAN OF MERGER OR CONSOLIDATION  BY
 AT  LEAST THE MINIMUM STATUS VOTE IN ADDITION TO ANY OTHER VOTE REQUIRED
 BY THIS CHAPTER, THE CERTIFICATE OF INCORPORATION OR THE BYLAWS.
 (D) A SALE, LEASE, CONVEYANCE, EXCHANGE, TRANSFER, OR  OTHER  DISPOSI
 TION OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF A BENEFIT CORPORATION,
 UNLESS THE TRANSACTION IS IN THE USUAL AND REGULAR COURSE OF BUSINESS OF
 THE  BENEFIT  CORPORATION, SHALL NOT BE EFFECTIVE UNLESS THE TRANSACTION
 IS APPROVED BY AT LEAST THE MINIMUM STATUS VOTE IN ADDITION TO ANY OTHER
 VOTE REQUIRED BY THIS CHAPTER, THE CERTIFICATE OF INCORPORATION  OR  THE
 BYLAWS.
 

S 1706. CORPORATE PURPOSES.
 (A) EVERY BENEFIT CORPORATION SHALL HAVE A PURPOSE OF CREATING GENERAL
 PUBLIC  BENEFIT.  THIS  PURPOSE  IS  IN  ADDITION  TO ITS PURPOSES UNDER
 SECTION TWO HUNDRED ONE OF THIS CHAPTER AND  ANY  SPECIFIC  PURPOSE  SET
 FORTH  IN  ITS  CERTIFICATE OF INCORPORATION UNDER PARAGRAPH (B) OF THIS
 SECTION.  THE PURPOSE TO CREATE GENERAL PUBLIC BENEFIT SHALL BE A  LIMI
 TATION  ON  THE  OTHER  PURPOSES  OF  THE BENEFIT CORPORATION, AND SHALL
 CONTROL OVER ANY INCONSISTENT PURPOSE OF THE BENEFIT CORPORATION.
 (B) THE CERTIFICATE OF INCORPORATION  OF  A  BENEFIT  CORPORATION  MAY
 IDENTIFY  ONE OR MORE SPECIFIC PUBLIC BENEFITS THAT IT IS THE PURPOSE OF
 THE BENEFIT CORPORATION TO CREATE IN  ADDITION  TO  ITS  PURPOSES  UNDER
 SECTION  TWO  HUNDRED  ONE  OF  THIS  CHAPTER  AND PARAGRAPH (A) OF THIS
 SECTION.  THE IDENTIFICATION OF A SPECIFIC  PUBLIC  BENEFIT  UNDER  THIS
 PARAGRAPH  DOES  NOT  LIMIT  THE  OBLIGATION OF A BENEFIT CORPORATION TO
 CREATE GENERAL PUBLIC BENEFIT.
 (C) THE CREATION OF GENERAL AND SPECIFIC PUBLIC BENEFITS  AS  PROVIDED
 IN  PARAGRAPHS  (A)  AND (B) OF THIS SECTION IS IN THE BEST INTERESTS OF
 THE BENEFIT CORPORATION.
 (D) A BENEFIT CORPORATION MAY AMEND ITS CERTIFICATE  OF  INCORPORATION
 TO  ADD, AMEND OR DELETE THE IDENTIFICATION OF A SPECIFIC PUBLIC BENEFIT
 THAT IT IS THE PURPOSE OF THE BENEFIT CORPORATION TO CREATE. THE  AMEND
 MENT SHALL NOT BE EFFECTIVE UNLESS IT IS ADOPTED BY AT LEAST THE MINIMUM
 STATUS VOTE.
 

S 1707. STANDARD OF CONDUCT FOR DIRECTORS AND OFFICERS.
 (A) IN DISCHARGING THE DUTIES OF THEIR RESPECTIVE POSITIONS, THE BOARD
 OF DIRECTORS, COMMITTEES OF THE BOARD AND INDIVIDUAL DIRECTORS AND OFFI
 CERS OF A BENEFIT CORPORATION:

 (1) SHALL CONSIDER THE EFFECTS OF ANY ACTION UPON:

 (A)  THE ABILITY FOR THE BENEFIT CORPORATION TO ACCOMPLISH ITS GENERAL
 AND ANY SPECIFIC PUBLIC BENEFIT PURPOSE;
 (B) THE SHAREHOLDERS OF THE BENEFIT CORPORATION;
 (C) THE EMPLOYEES AND WORKFORCE OF THE  BENEFIT  CORPORATION  AND  ITS
 SUBSIDIARIES AND SUPPLIERS;
 (D)  THE  INTERESTS  OF  CUSTOMERS  AS BENEFICIARIES OF THE GENERAL OR
 SPECIFIC PUBLIC BENEFIT PURPOSES OF THE BENEFIT CORPORATION;
 
       A. 4692--A                          5
 (E) COMMUNITY AND SOCIETAL  CONSIDERATIONS,  INCLUDING  THOSE  OF  ANY
 COMMUNITY  IN  WHICH OFFICES OR FACILITIES OF THE BENEFIT CORPORATION OR
 ITS SUBSIDIARIES OR SUPPLIERS ARE LOCATED;
 (F) THE LOCAL AND GLOBAL ENVIRONMENT; AND
 (G) THE SHORT-TERM AND LONG-TERM INTERESTS OF THE BENEFIT CORPORATION,
 INCLUDING  BENEFITS  THAT MAY ACCRUE TO THE BENEFIT CORPORATION FROM ITS
 LONG-TERM PLANS AND THE POSSIBILITY THAT THESE  INTERESTS  MAY  BE  BEST
 SERVED BY THE CONTINUED INDEPENDENCE OF THE BENEFIT CORPORATION;
 (2) MAY CONSIDER:

 (A)  THE RESOURCES, INTENT AND CONDUCT (PAST, STATED AND POTENTIAL) OF
 ANY PERSON SEEKING TO ACQUIRE CONTROL OF THE CORPORATION; AND
 (B) ANY OTHER PERTINENT FACTORS OR THE INTERESTS OF  ANY  OTHER  GROUP
 THAT THEY DEEM APPROPRIATE; AND
 (3)  SHALL  NOT  BE  REQUIRED TO GIVE PRIORITY TO THE INTERESTS OF ANY
 PARTICULAR PERSON OR GROUP REFERRED TO IN SUBPARAGRAPHS ONE AND  TWO  OF
 THIS  PARAGRAPH  OVER  THE INTERESTS OF ANY OTHER PERSON OR GROUP UNLESS
 THE BENEFIT CORPORATION HAS STATED ITS INTENTION  TO  GIVE  PRIORITY  TO
 INTERESTS RELATED TO A SPECIFIC PUBLIC BENEFIT PURPOSE IDENTIFIED IN ITS
 CERTIFICATE OF INCORPORATION.
 (B)  THE CONSIDERATION OF INTERESTS AND FACTORS IN THE MANNER REQUIRED
 BY PARAGRAPH (A) OF THIS SECTION:

 (1) SHALL NOT CONSTITUTE A VIOLATION OF  THE  PROVISIONS  OF  SECTIONS
 SEVEN HUNDRED FIFTEEN OR SEVEN HUNDRED SEVENTEEN OF THIS CHAPTER; AND
 (2)  IS  IN ADDITION TO THE ABILITY OF DIRECTORS TO CONSIDER INTERESTS
 AND FACTORS AS PROVIDED IN SECTION SEVEN HUNDRED SEVENTEEN OF THIS CHAP
 TER.
 (C) A DIRECTOR DOES NOT HAVE A FIDUCIARY DUTY TO A PERSON  THAT  IS  A
 BENEFICIARY  OF  THE  GENERAL  OR  SPECIFIC PUBLIC BENEFIT PURPOSES OF A
 BENEFIT CORPORATION ARISING FROM THE STATUS OF THE PERSON AS A BENEFICI
 ARY, UNLESS OTHERWISE STATED IN THE CERTIFICATE OF INCORPORATION OR  THE
 BYLAWS OF THE BENEFIT CORPORATION.
 

S 1708.  ANNUAL BENEFIT REPORT.
 (A)  A  BENEFIT CORPORATION MUST DELIVER TO EACH SHAREHOLDER AN ANNUAL
 BENEFIT REPORT INCLUDING:

 (1) A NARRATIVE DESCRIPTION OF:

 (A) THE PROCESS AND RATIONALE FOR SELECTING THE THIRD  PARTY  STANDARD
 USED TO PREPARE THE BENEFIT REPORT;
 (B)  THE  WAYS IN WHICH THE BENEFIT CORPORATION PURSUED GENERAL PUBLIC
 BENEFIT DURING THE YEAR AND THE EXTENT TO WHICH GENERAL  PUBLIC  BENEFIT
 WAS CREATED;
 (C)  THE  WAYS  IN  WHICH THE BENEFIT CORPORATION PURSUED ANY SPECIFIC
 PUBLIC BENEFIT THAT THE CERTIFICATE OF INCORPORATION STATES  IT  IS  THE
 PURPOSE  OF  THE  BENEFIT  CORPORATION TO CREATE AND THE EXTENT TO WHICH
 THAT SPECIFIC PUBLIC BENEFIT WAS CREATED; AND
 (D) ANY CIRCUMSTANCES THAT HAVE HINDERED THE CREATION BY  THE  BENEFIT
 CORPORATION OF GENERAL OR SPECIFIC PUBLIC BENEFIT;
 (2) AN ASSESSMENT OF THE PERFORMANCE OF THE BENEFIT CORPORATION, RELA
 TIVE TO ITS GENERAL PUBLIC BENEFIT PURPOSE ASSESSED AGAINST A THIRD-PAR
 TY  STANDARD  APPLIED CONSISTENTLY WITH ANY APPLICATION OF THAT STANDARD
 IN PRIOR BENEFIT REPORTS OR ACCOMPANIED BY AN EXPLANATION OF THE REASONS
 FOR ANY INCONSISTENT APPLICATION AND, IF APPLICABLE, ASSESSMENT  OF  THE
 PERFORMANCE  OF THE BENEFIT CORPORATION, RELATIVE TO ITS SPECIFIC PUBLIC
 BENEFIT PURPOSE OR PURPOSES;
 (3) THE COMPENSATION PAID BY THE BENEFIT CORPORATION DURING  THE  YEAR
 TO EACH DIRECTOR IN THAT CAPACITY; AND
 
       A. 4692--A                          6
 (4)  THE  NAME OF EACH PERSON THAT OWNS BENEFICIALLY OR OF RECORD FIVE
 PERCENT OR MORE OF THE OUTSTANDING SHARES OF THE BENEFIT CORPORATION.
 (B) THE BENEFIT REPORT MUST BE SENT ANNUALLY TO EACH SHAREHOLDER WITH
 IN  ONE  HUNDRED TWENTY DAYS FOLLOWING THE END OF THE FISCAL YEAR OF THE
 BENEFIT CORPORATION.  DELIVERY OF A BENEFIT REPORT TO SHAREHOLDERS IS IN
 ADDITION TO ANY OTHER REQUIREMENT TO DELIVER AN ANNUAL REPORT TO  SHARE
 HOLDERS.
 (C)  A BENEFIT CORPORATION MUST POST ITS MOST RECENT BENEFIT REPORT ON
 THE PUBLIC PORTION OF ITS WEBSITE, IF ANY, EXCEPT THAT THE  COMPENSATION
 PAID  TO DIRECTORS AND ANY FINANCIAL OR PROPRIETARY INFORMATION INCLUDED
 IN THE BENEFIT REPORT MAY BE OMITTED FROM THE BENEFIT REPORT AS POSTED.
 (D) CONCURRENTLY WITH THE DELIVERY OF THE BENEFIT REPORT TO SHAREHOLD
 ERS PURSUANT TO PARAGRAPH (B) OF THIS SECTION, THE  BENEFIT  CORPORATION
 MUST  DELIVER A COPY OF THE BENEFIT REPORT TO THE DEPARTMENT FOR FILING,
 EXCEPT THAT THE COMPENSATION PAID TO  DIRECTORS  AND  ANY  FINANCIAL  OR
 PROPRIETARY  INFORMATION  INCLUDED  IN THE BENEFIT REPORT MAY BE OMITTED
 FROM THE BENEFIT REPORT AS FILED UNDER THIS SECTION.
 (E) THE ANNUAL BENEFIT REPORT  SHALL  BE  IN  ADDITION  TO  ALL  OTHER
 REPORTING REQUIREMENTS UNDER THIS CHAPTER.
 

S 1709. CONSPICUOUS LANGUAGE ON THE FACE OF CERTIFICATES.
 ALL  CERTIFICATES  REPRESENTING  SHARES OF A BENEFIT CORPORATION SHALL
 CONTAIN, IN ADDITION TO ANY OTHER STATEMENTS REQUIRED  BY  THE  BUSINESS
 CORPORATION  LAW,  THE FOLLOWING CONSPICUOUS LANGUAGE ON THE FACE OF THE
 CERTIFICATE:

 "THIS ENTITY IS A BENEFIT CORPORATION ORGANIZED UNDER  ARTICLE  SEVEN
 TEEN OF THE NEW YORK BUSINESS CORPORATION LAW."
 

S  4.  Subparagraph  1 of paragraph (a) of section 720 of the business
 corporation law is amended by  adding  a  new  clause  (C)  to  read  as
 follows:

 (C)  IN  THE  CASE  OF  DIRECTORS OR OFFICERS OF A BENEFIT CORPORATION
 ORGANIZED UNDER ARTICLE SEVENTEEN OF THIS CHAPTER: (I)  THE  FAILURE  TO
 PURSUE  THE  GENERAL  PUBLIC BENEFIT PURPOSE OF A BENEFIT CORPORATION OR
 ANY SPECIFIC PUBLIC BENEFIT SET FORTH IN  ITS  CERTIFICATE  OF  INCORPO
 RATION;  (II) THE FAILURE BY A BENEFIT CORPORATION TO DELIVER OR POST AN
 ANNUAL REPORT AS REQUIRED BY SECTION SEVENTEEN HUNDRED EIGHT OF  ARTICLE
 SEVENTEEN  OF  THIS  CHAPTER;  OR  (III)  THE  NEGLECT OF, OR FAILURE TO
 PERFORM, OR OTHER VIOLATION OF HIS OR HER DUTIES OR STANDARD OF  CONDUCT
 UNDER ARTICLE SEVENTEEN OF THIS CHAPTER.
 

S  5.  This  act  shall take effect on the sixtieth day after it shall
 have become a law.

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