07 Apr '11, 9am
Q&A on California’s Proposed “Flexible Purpose Corporation”
We are trying to make it easier for companies to include social and environmental goals in their business plans. This legislation creates a new corporate form that helps them do just that. Currently, officers of publicly held for-profit corporations face liability for pursuing any social benefit goals that might be seen as conflicting with the maximization of profit or shareholder value. Entrepreneurs who choose to incorporate under this new form avoid this liability so long as they are transparent with their investors about their goals. The bill will make it easier for for-profit social entrepreneurs to find commercial funders, and will help them to ensure their company stays on mission.