California Signs Flex Corp and B Corp into Law

From Ellie Winninghoff, Ethical Markets Advisory Board

“California Governor Jerry Brown Sunday night, Oct. 9, 2011, signed into legislation a new corporate form that marries money and mission. The idea is to allow social enterprises, which are often organized as nonprofits or for-profit/nonprofit hybrids, to access capital from mainstream investors.

As a Flexible Purpose Corporation, a company can make profits while pursuing at least one do-good purpose akin to the charitable missions traditionally pursued by nonprofits–and/or promotes the interests of employees, suppliers, customers, creditors, community or public interests like the environment. Although early adopters are expected to be social enterprises engaged in activities like microfinance, this for-profit/nonprofit hybrid form can accommodate any kind of company–public or private, big or small, high growth or slow growth.”

See Signed Into CA Law: AB 361 (Benefit Corporations) & SB 201 (Flexible Purpose Corporations) from www.innov8social.com

See Ellie Winninghoff’s piece Broadening Fiduciary Duty – Flexible Corp And Benefit Corp Explained