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The Delaware Public Benefit LP is available starting August 1st of 2019 to entrepreneurs and investors who seek to do good while profiting. Public Benefit Corporations and Public Benefit LLCs have existed for some time under Delaware law, but the Public Benefit LP is a brand new entity.
The law governing Delaware Limited Partnerships was amended as of June 19th of 2019 by Governor John Carney, so for the first time in Delaware’s history, an LP may elect to be a “Public Benefit Limited Partnership.” A Public Benefit LP is a for-profit entity; however, an LP’s management can take into account social, economic and political considerations without violating its fiduciary duty to act in the best interests of the company.
An LP wishing to elect Public Benefit status must include a Public Benefit Statement in its Certificate of Limited Partnership. In addition, the LP agreement must articulate in detail the “public benefits” that management may consider in operating the entity. Clear explanation of public benefit factors provides the LP with clarity in acting within the guidelines provided in the Certificate of Limited Partnership filed with the State of Delaware.
Every two years, a Public Benefit LP must provide the partners with information regarding its advancement of the public benefit(s) it seeks to promote, which must include: the objectives that have been established to promote the LP’s stated public benefit goals; the standards the LP is using to assess its progress in promoting its stated public benefits; and an assessment of the LP’s success in meeting its objectives and progress goals.
The advantage of a Public Benefit LP comes largely in the way that it can be marketed. By formally electing the Public Benefit LP status, parnters of the LP show a level of commitment to a public benefit(s), and this can attract mission-aligned partners, investors and clients.
The State of Delaware formation fees are the same for a Public Benefit LP and traditional LP and the annual franchise tax is the same, as well—$300 due June 1st of every year.
Harvard Business Services, Inc. can assist with the formation of the Public Benefit LP, LLC or Corporation please call us at 800 345 2677 extension 6900 or email firstname.lastname@example.org with any questions!
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.