In a Delaware Public Benefit Corporation, the Board of Directors is tasked with managing the corporation so its fiscal pursuits are balanced with its ethics, as described on the Certificate of Incorporation. The public benefit(s) stated can—but is not limited to—be related to the commercial business of the Public Benefit Corporation.
For example, a vitamin company can pledge to donate some of its products to underprivileged mothers or third-world orphanages. A Delaware Public Benefit Corporation is also allowed to decide how to prioritize its public benefit purpose.
However, the Board of Directors of a Delaware Public Benefit Company can be held accountable for the stated public benefit purpose(s). The Board is responsible for a biennial (every two years) reporting requirement. This report must be distributed to shareholders, and it must describe the company’s endeavors to achieve its public benefit purpose.
Unlike Public Benefit Corporations in other states, in a Delaware Public Benefit Corporation, the biennial report does not have to be completed by a third-party standard; nor is a Delaware Public Benefit Corporation required to publish this report publicly.
Delaware Public Benefit Corporations are, however, required to disclose the standards by which the Board of Directors has evaluated the corporation’s performance in regard to its identified public benefit(s).
Under the corporate law, any other type of Delaware Corporation can convert to a Public Benefit Corporation. All it has to do is solicit 66 2/3% of all shares (voting as a single class in this specific case) and amend its Certificate of Incorporation to abide by the Delaware Public Benefit regulations.
A Delaware Public Benefit Corporation can exist in perpetuity, just as any other type of Delaware Corporation.
Since 1981, Harvard Business Services, Inc. has helped form 130,170 Delaware corporations and LLCs for people all over the world.
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