If already incorporated in Utah, properly registered and meeting all of the requirements of Title 16 Chapter 10a. Utah Revised Business Corporation Act and all other laws regulations and requirements, filing as a Benefit Corporation under Chapter 10b. Benefit Corporation Act requires an update to applicable articles of incorporation or bylaws. Simple and inexpensive, right?
Not so fast! The direct expenses of filing fees, attorney’s fees and other expenses are only the beginning. How do we better understand and budget for costs, charges, expenses both direct and indirect, required and discretionary? While there is no current template let, us begin by taking a look at the end, of the first year anyway and compare it to the initial requirements.
Under Chapter 10b, a Benefit Corporation shall have a purpose of creating “general public benefit”. The revised articles of incorporation of a benefit corporation “may identify one or more “specific public benefits” that it is the purpose of the benefit corporation. The creation of general public benefit and a specific public benefit is considered in the best interests of the benefit corporation.
Understand? You need to because there is the section under Chapter 10b addresses accountability of the Benefit Corporation directors. Under 16-10b-301. Standard of conduct for directors, there are references to the requirement for considering the effect of actions on the shareholders, employees, subsidiaries, suppliers Customers (as beneficiaries of the general public benefit or specific public benefit purposes of the benefit corporation), community and societal factors, the local and global environment, 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 and the ability of the benefit corporation to accomplish its general public benefit.
Of course, there is legal jargon in here so again, legal advice is highly recommended. To bring all of the items identified into a formal and documented structure might seem to be onerous but the process and results are of absolute value and will be essential when preparing ….
The required Annual Report
Utah Benefit Corporations are required to report annually on the ways in which the benefit corporation pursued general and specific (in a part of the amended articles of incorporation) public benefit during the year and the extent to which general/specific public benefit was created. There is more to be considered and delivered including “…an assessment of the overall social and environmental performance of the benefit corporation against a third-party standard”.
These are only a few of the considerations in forming and managing a Benefit Corporation in Utah. None of the items are outside the scope of what a responsible entity would enact in the normal course of action so these should be considered a guide to success rather than a deterrent to establish a Benefit Corporation.
At Impact Navigators, we work with businesses and individuals to establish and maintain their Utah Benefit Corporation. We coach and mentor businesses and individuals in the processes and practices needed to assure continuous and sustainable compliance against regulations and performance against targeted objectives. The outcomes we look to achieve are focused on increased financial performance, inclusion of targeted metrics in financial and social performance, enhancement of branding and marketing efforts and processes to maximize sustainability – for the benefit of all.
Let Impact Navigators help you transform your company through success and on to Significance!
Contact us today at Stewards@impactnavigators.com for an initial consultation.