Public benefit corporations bill becomes Kansas law
Topeka ? Gov. Sam Brownback signed a bill into law Monday making it easier for for-profit corporations to engage in charitable or other socially beneficial activities, even if that cuts into their profit margins.
The bill authorizes a new class of corporations in Kansas known as “public benefit corporations” that could state in their charters that part of their mission is to produce a public benefit and to operate in a responsible, sustainable manner.
Those benefits could be any positive effect, the reduction of negative effects, or of an “artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological nature,” according to the law.
Under current corporate law in Kansas, officers and directors of a corporation have a duty to operate the company in a way that maximizes profits and shareholder value, and they can be sued by shareholders for failing to fulfill those duties.
The new law would shield public benefit corporations from those kinds of lawsuits.
Examples of such corporations already established in other states include the Ben and Jerry’s ice cream company and the online crowdsourcing platform Kickstarter.
The corporation bill was one of five bills Brownback signed into law Thursday. He also signed a bill amending the Kansas Open Records Act to exclude the addresses of prospective jurors from information that is released to the public.
The final version of the bill passed the Kansas Senate on May 3 by a vote of 40-0. It passed the House on May 5, 118-3.