N.Y. Business Corporation Law 1708 – Annual benefit report
§ 1708. Annual benefit report.
Terms Used In N.Y. Business Corporation Law 1708
- Benefit corporation: means a business corporation incorporated under this article and whose status as a benefit corporation has not been terminated as provided in this article. See N.Y. Business Corporation Law 1702
- 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.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- 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. See N.Y. Business Corporation Law 1702
- Specific public benefit: includes :
(1) providing low-income or underserved individuals or communities with beneficial products or services;
(2) promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;
(3) preserving the environment;
(4) improving human health;
(5) promoting the arts, sciences or advancement of knowledge;
(6) increasing the flow of capital to entities with a public benefit purpose; and
(7) the accomplishment of any other particular benefit for society or the environment. See N.Y. Business Corporation Law 1702 - Third-party standard: means a recognized standard for defining, reporting and assessing general public benefit that is:
(1) developed by a person that is independent of the benefit corporation; and
(2) transparent because the following information about the standard is publicly available:
(A) the factors considered when measuring the performance of a business;
(B) the relative weightings of those factors; and
(C) the identity of the persons who developed and control changes to the standard and the process by which those changes are made. See N.Y. Business Corporation Law 1702
(a) A benefit corporation must deliver to each shareholder an annual benefit report including:
(1) a narrative description of:
(A) the process and rationale for selecting the third party standard used to prepare the benefit report;
(B) the ways in which the benefit corporation pursued general public benefit during the year and the extent to which general public benefit was created;
(C) the ways in which the benefit corporation pursued any specific public benefit that the certificate of incorporation states it is the purpose of the benefit corporation to create and the extent to which that specific public benefit was created; and
(D) any circumstances that have hindered the creation by the benefit corporation of general or specific public benefit;
(2) an assessment of the performance of the benefit corporation, relative to its general public benefit purpose assessed against a third-party standard applied consistently with any application of that standard in prior benefit reports or accompanied by an explanation of the reasons for any inconsistent application and, if applicable, assessment of the performance of the benefit corporation, relative to its specific public benefit purpose or purposes;
(3) the compensation paid by the benefit corporation during the year to each director in that capacity; and
(4) the name of each person that owns beneficially or of record five percent or more of the outstanding shares of the benefit corporation.
(b) The benefit report must be sent annually to each shareholder within one hundred twenty days following the end of the fiscal year of the benefit corporation. Delivery of a benefit report to shareholders is in addition to any other requirement to deliver an annual report to shareholders.
(c) A benefit corporation must post its most recent benefit report on the public portion of its website, if any, except that the compensation paid to directors and any financial or proprietary information included in the benefit report may be omitted from the benefit report as posted.
(d) Concurrently with the delivery of the benefit report to shareholders pursuant to paragraph (b) of this section, the benefit corporation must deliver a copy of the benefit report to the department for filing, except that the compensation paid to directors and any financial or proprietary information included in the benefit report may be omitted from the benefit report as filed under this section.
(e) The annual benefit report shall be in addition to all other reporting requirements under this chapter.