In this chapter, unless the context otherwise requires:

Terms Used In Arizona Laws 10-2402

  • Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
  • Articles of incorporation: means the original or restated articles of incorporation or articles of merger and all amendments to the articles of incorporation or merger and includes amended and restated articles of incorporation and articles of amendment and merger. See Arizona Laws 10-140
  • Bylaws: means the code of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name by which those rules are designated. See Arizona Laws 10-140
  • Class: refers to a group of memberships that have the same rights with respect to voting, dissolution, redemption and transfer. See Arizona Laws 10-3140
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Distribution: means a direct or indirect transfer of money or other property, except its own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. See Arizona Laws 10-140
  • Entity: includes a corporation, foreign corporation, not for profit corporation, profit and not for profit unincorporated association, nonprofit corporation, close corporation, corporation sole or limited liability company, a professional corporation, association or limited liability company, a business trust, estate, partnership, registered limited liability partnership, trust or joint venture, two or more persons having a joint or common economic interest, any person other than an individual and a state, the United States and a foreign government. See Arizona Laws 10-140
  • including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
  • Membership: refers to the rights and obligations a member or members have pursuant to a corporation's articles of incorporation and bylaws and chapters 24 through 40 of this title. See Arizona Laws 10-3140
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: includes an individual and entity. See Arizona Laws 10-140
  • Proceeding: includes a civil suit and a criminal, administrative and investigatory action. See Arizona Laws 10-140
  • Process: means a citation, writ or summons issued in the course of judicial proceedings. See Arizona Laws 1-215
  • Vote: includes authorization by written ballot and written consent. See Arizona Laws 10-3140
  • Voting group: means all shares of one or more classes or series that under the articles of incorporation or chapters 1 through 17 of this title are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. See Arizona Laws 10-140

1. "Benefit corporation" means a corporation that both:

(a) Has elected to become subject to this chapter.

(b) The status of which as a benefit corporation has not been terminated.

2. "Benefit enforcement proceeding" means any claim or action for either of the following:

(a) The failure of a benefit corporation to pursue or create general public benefit or a specific public benefit purpose set forth in its articles.

(b) A violation of any obligation, duty or standard of conduct under this chapter.

3. "General public benefit" means a material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation.

4. "Minimum status vote" means:

(a) In the case of a business corporation, in addition to any other required approval or vote, the satisfaction of the following conditions:

(i) The shareholders of every class or series are entitled to vote as a separate voting group on the corporate action regardless of a limitation stated in the articles of incorporation or bylaws on the voting rights of any class or series.

(ii) The corporate action is approved by vote of the shareholders of each class or series entitled to cast at least two-thirds of the votes that all shareholders of the class or series are entitled to cast on the action.

(b) In the case of a domestic entity other than a business corporation, in addition to any other required approval, vote or consent, the satisfaction of the following conditions:

(i) The holders of every class or series of equity interest in the entity that are entitled to receive a distribution of any kind from the entity are entitled to vote on or consent to the action regardless of any otherwise applicable limitation on the voting or consent rights of any class or series.

(ii) The action is approved by vote or consent of the holders described in item (i) of this subdivision entitled to cast at least two-thirds of the votes or consents that all of those holders are entitled to cast on the action.

5. "Specific public benefit" includes:

(a) Providing low-income or underserved individuals or communities with beneficial products or services.

(b) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business.

(c) Protecting or restoring the environment.

(d) Improving human health.

(e) Promoting the arts, sciences or advancement of knowledge.

(f) Increasing the flow of capital to entities with a purpose to benefit society or the environment.

(g) Conferring any other particular benefit on society or the environment as specified in the benefit corporation’s articles of incorporation.

6. "Subsidiary" means, in relation to a person, an entity in which the person owns beneficially or of record fifty per cent or more of the outstanding equity interests.

7. "Supermajority status vote" means:

(a) For a business corporation, in addition to any other required approval or vote, the satisfaction of the following conditions:

(i) The shareholders of every class or series are entitled to vote as a separate voting group on the corporate action regardless of a limitation stated in the articles of incorporation or bylaws on the voting rights of any class or series.

(ii) The corporate action is approved by vote of the shareholders of each class or series entitled to cast at least three-fourths of the votes that all shareholders of the class or series are entitled to cast on the action.

(b) For a domestic entity other than a business corporation, in addition to any other required approval, vote or consent, the satisfaction of the following conditions:

(i) The holders of every class or series of equity interest in the entity that are entitled to receive a distribution of any kind from the entity are entitled to vote on or consent to the action regardless of any otherwise applicable limitation on the voting or consent rights of any class or series.

(ii) The action is approved by vote or consent of the holders described in item (i) of this subdivision entitled to cast at least three-fourths of the votes or consents that all of those holders are entitled to cast on the action.

8. "Third-party standard" means a recognized standard for defining, reporting and assessing corporate social and environmental performance that is:

(a) Comprehensive because it assesses the effect of a business and its operations on the interests listed in section 10-2431, subsection A, paragraph 1.

(b) Developed by an entity that is not controlled by the benefit corporation.

(c) Credible because it is developed by an entity that both:

(i) Has access to necessary expertise to assess overall corporate social and environmental performance.

(ii) Uses a balanced multistakeholder approach to develop the standard, including a reasonable public comment period.

(d) Transparent because the following information is publicly available about the standard:

(i) The criteria considered when measuring the overall social and environmental performance of a business.

(ii) The relative weightings, if any, of those criteria.

(e) Transparent because the following information is publicly available about the development and revision of the standard:

(i) The identity of the directors, officers, material owners and governing body of the entity that developed and controls revisions to the standard.

(ii) The process by which revisions to the standard and changes to the membership of the governing body are made.

(iii) An accounting of the revenue and sources of financial support for the entity, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest.