Sec. 5. Responsibilities of United States corporations
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/bill/116/s/3215/is/section-5A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
In this section: The term general public benefit means a material positive impact on society resulting from the business and operations of a United States corporation, when taken as a whole. The term subsidiary means, with respect to a person, an entity in which the person owns beneficially or of record not less than 50 percent of the outstanding equity interests of the entity, calculated as if all outstanding rights to acquire equity interests in the entity had been exercised.
The charter of a large entity that is filed with the Office shall state that the entity is a United States corporation. A United States corporation shall have the purpose of creating a general public benefit, which shall be— identified in the charter of the United States corporation; and in addition to the purpose of the United States corporation under the articles of incorporation in the State in which the United States corporation is incorporated, if applicable. In discharging the duties of their respective positions, and in considering the best interests of a United States corporation, the board of directors, committees of the board of directors, and individual directors of a United States corporation— shall manage or direct the business and affairs of the United States corporation in a manner that— seeks to create a general public benefit; and balances the pecuniary interests of the shareholders of the United States corporation with the best interests of persons that are materially affected by the conduct of the United States corporation; and in carrying out subparagraph (A)— shall consider the effects of any action or inaction on— the shareholders of the United States corporation; the employees and workforce of— the United States corporation; the subsidiaries of the United States corporation; and the suppliers of the United States corporation; the interests of customers and subsidiaries of the United States corporation as beneficiaries of the general public benefit purpose of the United States corporation; community and societal factors, including those of each community in which offices or facilities of the United States corporation, subsidiaries of the United States corporation, or suppliers of the United States corporation are located; the local and global environment; the short-term and long-term interests of the United States corporation, including— benefits that may accrue to the United States corporation from the long-term plans of the United States corporation; and the possibility that those interests may be best served by the continued independence of the United States corporation; and the ability of the United States corporation to accomplish the general public benefit purpose of the United States corporation; may consider— other pertinent factors; or the interests of any other group that are identified in the articles of incorporation in the State in which the United States corporation is incorporated, if applicable; and shall not be required to give priority to a particular interest or factor described in clause
(i)or
(ii)over any other interest or factor. Each officer of a United States corporation shall balance and consider the interests and factors described in paragraph (1)(B)(i) in the manner described in paragraph (1)(B)(iii) if— the officer has discretion to act with respect to a matter; and it reasonably appears to the officer that the matter may have a material effect on the creation by the United States corporation of a general public benefit identified in the charter of the United States corporation. Except as provided in the charter of a United States corporation, neither a director nor an officer of a United States corporation may be held personally liable for monetary damages for— any action or inaction in the course of performing the duties of a director under paragraph
(1)or an officer under paragraph (2), as applicable, if the director or officer was not interested with respect to the action or inaction; or the failure of the United States corporation to pursue or create a general public benefit. Neither a director nor an officer of a United States corporation shall have any duty to a person that is a beneficiary of the general public benefit purpose of the United States corporation because of the status of the person as such a beneficiary. A director or an officer of a United States corporation who makes a business judgment in good faith shall be deemed to have fulfilled the duty of the director under paragraph
(1)or the officer under paragraph (2), as applicable, if the director or officer— is not interested in the subject of the business judgment; is informed with respect to the subject of the business judgment to an extent that the director reasonably believes to be appropriate under the circumstances; and rationally believes that the business judgment is in the best interests of the United States corporation. A United States corporation shall not be liable for monetary damages under this section for any failure of the United States corporation to pursue or create a general public benefit. A proceeding to enforce the requirements of this section may be commenced or maintained only— directly by the United States corporation to which the proceeding applies; or derivatively, under the laws of the State in which the United States corporation is organized, by a person, or a group of persons, that own— beneficially or of record not less than 2 percent of the total number of shares of a class or series outstanding at the time of the act or omission that is the subject of the proceeding; or beneficially or of record not less than 5 percent of the outstanding equity interests in an entity of which the United States corporation is a subsidiary at the time of the act or omission that is the subject of the proceeding. For the purposes of this subsection, a person shall be construed to be the beneficial owner of shares or equity interests if the shares or equity interests are held in a voting trust or by a nominee on behalf of the person. Nothing in this section may be construed to affect any provision of law that is applicable to a corporation, body corporate, body politic, joint stock company, or limited liability company, as applicable, that is not a United States corporation. Except as otherwise provided in this section, the law of the State in which a United States corporation is organized shall apply with respect to the United States corporation. If any provision of Federal law is inconsistent with the requirements of this section with respect to a United States corporation, the requirements of this section shall supersede that provision. A provision of the articles of incorporation in the State in which a United States corporation is incorporated, if applicable, or in the bylaws of a United States corporation may not limit, be inconsistent with, or supersede a provision of this section.