Allowing the formation of certain for-profit corporations as benefit corporations authorized to do business in this state under certain conditions

GENERAL. This bill amends the “Iowa Business Corporation Act” codified in Code chapter 490, by creating new subchapter XVIII governing benefit corporations. The bill allows a new for-profit business to either incorporate as a benefit corporation or as an existing for-profit corporation to become a benefit corporation.1801(1)).1801(2)). Both existing Code chapter 490 and the bill’s amendments in part creating new subchapter XVIII are based on model legislation prepared by the American bar association. DECLARATION.1801(3)).401).5).1806(1)). CHOICE TO FORM AS OR BECOME A BENEFIT ENTITY.202).1003)).1104(7)). In any case, at least percent of the corporation’s outstanding voting and nonvoting shares of each class and series must approve the choice.1302(1)).1104(7)). MANAGEMENT.1805(1)).1805(2)).1805(3)).1807). See Code chapter 490, subchapter VII, part D. REPORT.1806(2)). The benefit corporation’s directors are responsible for the report’s preparation. The benefit corporation’s articles may require the involvement by a third party, responsible for certifying how the corporation addressed the public benefit or the best interests of those materially affected by the corporation’s conduct.1806(3)). APPLICATION. The special designation of a corporation as a benefit corporation does not by itself create an implication that different rules apply to nonbenefit corporations.1808).