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How to Form a Delaware Public Benefit Corporation

 

how to form a delaware public benefit corporation Form a Delaware Corporation

 

What is Required to Form a Delaware PBC

  • On the Certificate of Incorporation, indicate one (or more) public benefit purposes or goals the company will specifically promote (these should be artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific and/or technological in nature)
  • The Certificate of Incorporation should also state that the corporation is a Public Benefit Corporation
  • All the other information typically required on a corporation's Certificate of Incorporation is also needed, such as the name of the incorporator, the company's principal location and the name and address of your Delaware Registered Agent

 

How to Maintain Compliance in a Delaware PBC

  • The Board of Directors must furnish a Benefit Report every other year (at least) to the shareholders, which is assessed by a neutral, third-party standard; this report must include:
    • The annual objective(s) of the Public Benefit Corporation as established by the Board of Directors
    • How progress in achieving the goal(s) was measured
    • Facts that indicate whether or not the goals were achieved
    • Overall assessment of the Public Benefit Corporation's success
      • NOTE: in Delaware, this Benefit Report does not have to be made public as it does in most other states
  • Draft bylaws, just as you would in any other corporation
  • Hold an organizational meeting soon after you file the Certificate of Incorporation, in which you elect a Board of Directors and formally adopt the Public Benefit Corporation's bylaws
  • Maintain a Delaware Registered Agent
  • Pay your annual Delaware Franchise Tax and file annual report

 

How to Issue Stock in a Delaware PBC

All stock certificates must clearly show that the company is a Public Benefit Corporation

 

SOURCES

Field, Anna. "Who's Who of Social Enterprises Registers as Benefit Corporations in Delaware." Forbes.com. Forbes. 8 August 2013. Web. 14 March 2016.

Fisher, Daniel. "Delaware 'Public Benefit Corporation' Lets Directors Serve Three Masters Instead of One." Forbes.com. Forbes. 16 July 2013. Web. 10 March 2016.

Sampsella, Dick, JD, MBA. "An Examination of the Delaware Public Benefit Corporation Legislation." SRR Journal. Fall 2014. Web. 10 March 2016.

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