Gibson Dunn identifies a Corporate Paradigm Shift: Public Benefit Corporations

Since 2010, 30 states and the District of Columbia have passed legislation authorizing for-profit “public benefit corporations” (“PBC”), known in many states just as “benefit corporations.”[1] Although these laws vary slightly by state, each requires the board of directors of a PBC to consider the public benefit, in addition to shareholder return on investment, in their decision-making. Although state corporate law statutes and the tax code treat PBCs as for-profit enterprises, the legal focus of this new corporate model contrasts with that of traditional corporations, which focuses solely on maximizing shareholder wealth. The PBC laws are designed to empower … Read more