Connecticut House Bill HB05490

Connecticut 2012 Regular Session

• Introduced: 3/8/12
• Refer: 3/8/12

Caption

An Act Concerning The Establishment Of Benefit Corporations.

Impact

If enacted, HB 05490 will amend state laws to recognize benefit corporations, providing them with legal protection to pursue public benefits without the fear of liability typically associated with prioritizing social goals over shareholder profits. This will allow companies that choose to become benefit corporations to have a formal avenue for measuring and reporting their social and environmental performance. The law will also facilitate the conversion of existing corporations into benefit corporations, thus broadening the pool of responsible business practices within the state.

Summary

House Bill 05490 aims to establish the framework for benefit corporations in the state. A benefit corporation is defined as a business entity that is committed to creating a material positive impact on society and the environment, assessed against a third-party standard. This bill allows corporations to pursue both profit and a broader public purpose, recognizing the importance of accountability towards stakeholders beyond shareholders. The legislation outlines requirements for the formation, operation, and governance of benefit corporations, ensuring that they prioritize social and environmental benefits alongside traditional business objectives.

Contention

One of the notable points of contention surrounding HB 05490 lies in the potential lack of clarity regarding what constitutes a 'public benefit'. Critics may argue that the bill could lead to misinterpretation of what benefits should be prioritized and how corporations can justify their actions under the guise of social responsibility. Additionally, there might be concerns regarding the enforcement of standards and accountability, particularly in relation to the proposed third-party assessments of corporate performance in fulfilling their stated public benefits.