Utah Code 48-4-401. Annual benefit report

48-4-401. Annual benefit report.

(1)

A benefit company shall prepare an annual benefit report that includes:

Need help with a review of an LLC operating agreement?
Have it reviewed by a lawyer, get answers to your questions and move forward with confidence.
Connect with a lawyer now

Terms Used In Utah Code 48-4-401

Benefit company: means a limited liability company:

(a)	that elects to become subject to this chapter; and

(b)

the status of which as a benefit company has not been terminated. See Utah Code 48-4-103

General public benefit: means a material positive impact on society and the environment:

(a)	taken as a whole;

(b)	assessed against a third-party standard; and

(c)

from the business of a benefit company. See Utah Code 48-4-103

Process: means a writ or summons issued in the course of a judicial proceeding. See Utah Code 68-3-12.5

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; and

(g)

conferring any other particular benefit on society or the environment. See Utah Code 48-4-103

Third-party standard: means a standard for defining, reporting, and assessing overall social and environmental performance that:

(a)	assesses the effect of a business and a business's operations on the interests described in Subsections 48-4-301(1)(a)(ii) through (v);

(b)

is developed by an entity:

(i)	that is independent of the benefit company;

(ii)

whose governing body is comprised of no more than one-third of members who are representatives of any of the following:

(A)	an association of businesses that operate in a specific industry whose members are measured by the standard;

(B)	businesses from a specific industry or an association of businesses in that industry; or

(C)	businesses whose performance is assessed against the standard;

(iii)

that is not materially financed by an association or business described in Subsection (10)(b)(ii);

(iv)	that has access to necessary expertise to assess overall social and environmental performance;

(v)	uses a balanced multistakeholder approach to develop the standard, including a public comment period of at least 30 days; and

(vi)

makes the following information publically available:

(A)	the criteria considered when measuring the overall social and environmental performance of a business;

(B)	the relative weightings, if any, of the criteria described in Subsection (10)(b)(vi)(A);

(C)	the identity of each director, officer, material owner, and governing body of the entity that developed and controls revisions to the standard;

(D)	the process by which revisions to the standard and changes to the membership of the governing body are made; and

(E)

an accounting of the revenue and sources of financial support for the entity, with sufficient detail to disclose a relationship that could reasonably be considered to present a potential conflict of interest. See Utah Code 48-4-103

(a)

a narrative description of:

(i)	the ways in which the benefit company pursued the benefit company’s general public benefit purpose during the year and the extent to which general public benefit was created;

(ii)	the ways in which the benefit company pursued any specific public benefit that the benefit company’s certificate of organization states is the purpose of the benefit company to create and the extent to which the specific public benefit was created;

(iii)

any circumstances that have hindered the benefit company’s creation of general public benefit or any specific public benefit; and

(iv)	the process and rationale for selecting or changing the third-party standard used to prepare the benefit report;

(b)

an assessment of the overall social and environmental performance of the benefit company against a third-party standard:

(i)	applied consistently with any application of the standard in prior benefit reports; or

(ii)	accompanied by an explanation of the reasons for any inconsistent application; and

(c)

any connection between the organization that established the third-party standard, or the organization’s directors or officers, or a holder of 5% or more of the governance interests in the organization, and the benefit company or the benefit company’s members, managers, or officers or any holder of 5% or more of the outstanding interests in the benefit company, including any financial or governance relationship that might materially affect the credibility of the use of the third-party standard.

(2)	The assessment described in Subsection (1)(b) does not need to be audited or certified by a third party.

Enacted by Chapter 201, 2018 General Session

Previous section

Next section

Part 4 Contents