Here in Colorado, businesses will not have the option of forming as benefit corporations until April 1, 2014. However, Delaware’s statute became effective August 1, and 17 companies were ready and waiting to become benefit corporations on that first day.
Such companies included Plum Organics, which makes organic baby food, and home goods brand Method. Method’s co-founder Adam Lowry summed up the company’s decision as follows:
“Delaware benefit corporation law enables responsible businesses like Method to practice a more enlightened form of corporate governance that includes not only financial objectives, but social and environmental objectives. Our hope is that this legislation spurs the development of a robust sector of our economy comprised of businesses that do well by doing good, paving the way for more progressive policy, and ultimately, a more symbiotic relationship between business and society.”
Delaware’s buy-in to the benefit corporation concept is seen as crucial, because it is the home of more than one million legal entities and likely will have a significant development on this area of corporate law. Colorado’s statute is very similar to Delaware’s, and both technically label the entities as “public benefit corporations.” We’ve previously covered the evolution and details of the Colorado legislation, as well as some uncertainties with respect to charitable solicitations law, and will continue to provide updates on any developments.