Episode 36 – Benefit Corporation Legislation (AB 361) Passes in California

October 20, 2011

In Episode 36 of The Wendel Forum (originally aired on Green 960 AM radio on October 15, 2011), Wendel Rosen green business partners Bill Acevedo and Donald Simon sit down together to discuss the recent passage of AB 361, the new Benefit Corporation legislation signed into law by California Governor Jerry Brown on October 9, 2011.   The legislation becomes effective January 1, 2012. 

Green Business attorney Donald Simon

Wendel Rosen's Donald Simon helped draft and promote new Benefit Corporation legislation (AB 361)

The legislation was originally advanced by B Lab, a non-profit based out of Pennsylvania and New York that has been promoting a private certification label for companies called “B Corp.”  So, what are B Corporations?  They are companies that choose to publicly measure themselves against metrics that include social and environmental missions.  (By the way, Wendel Rosen is a certified B Corporation).  Last November, B Lab tapped an elite team of lawyers in California, Donald along with Jonathan Storper and John Montgomery, to form the working legal group to craft and promote the legislation, which became known as AB 361.   Assembly Bill 361 (Huffman)  creates a new corporate structure available to companies that want to build social and environmental values into their core mission.  

Adopting the Benefit Corporation form of entity will protect corporate officers (and hold them accountable) for socially- and environmentally-driven decision making.   It requires transparency and verification from those companies choosing to take its form.  Donald and Bill explain how this legislation will help to differentiate genuine core corporate values from great marketing hype in the sustainable business marketplace and the steps companies can take to switch to this new corporate form.

Erik Trojian, Director of Policy for B Lab, joins the conversation to help explain what’s happening nationally to introduce Benefit Corporation.  For example, in New York, similar legislation is currently awaiting the governor’s signature.  There are several other states that have already enacted these types of laws.  With the passage of these bills across the country, it increases the opportunities for new purpose-driven investment dollars to support innovative businesses.  

States that have passed B Corp legislation: 

  • California
  • Hawaii
  • Virginia
  • Maryland
  • Vermont
  • New Jersey

Forthcoming legislation: 

  • Colorado
  • New York
  • North Carolina
  • Pennsylvania
  • Michigan 

We invite you to learn more about this new form of corporate entity and what it might mean for your green business by listening to the interview.  Then tell us what you think.
Will your company consider this form of entity? 

Post Links:

Interview discussion regarding AB 361 Benefit Corporation legislation: Episode 36 of The Wendel Forum (27.35 minutes, mp3)

B Corporations / B Lab website: http://bcorporation.net/

Green 960 AM radio website: http://www.green960.com/main.html

Wendel Rosen’s B Corp Listing: http://www.bcorporation.net/wendelrosen

Around the Capital legislation tracking website: http://www.aroundthecapitol.com/Bills/AB_361/20112012/

Tracking B Corp Legislation Around the Country: http://www.bcorporation.net/publicpolicy

Benefit Corporation Legal Provisions and FAQ from B Lab: http://www.bcorporation.net/resources/bcorp/documents/Benefit%20Corporation%20-%20Legal%20Provisions%20and%20FAQ.pdf

Donald Simon website bio: www.wendel.com/dsimon

Bill Acevedo website bio: www.wendel.com/wacevedo

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5 Responses to “Episode 36 – Benefit Corporation Legislation (AB 361) Passes in California”


  1. [...] spreading the word about how companies can adopt this new corporate structure.  You can listen to Episode 36 of The Wendel Forum for a previous discussion about this legislation, which allows companies to incorporate their values [...]


  2. [...] Both laws require that the corporation specify a social benefit (or special purpose) in their articles of incorporation, both require the business to maintain a certain amount of transparency with annual reporting, and neither requires that the social benefit trumps profit (unlike typical L3C legislation).  A stark difference between the two is that BenCorp Law requires third-party certification and Flex Law does not.  Not surprising, BenCorp Law was originally crafted by B Lab, an organization in the business of third-party certification.   This is not an accusation, just a fact. [...]


  3. [...] Both laws require that the corporation specify a social benefit (or special purpose) in their articles of incorporation, both require the business to maintain a certain amount of transparency with annual reporting, and neither requires that the social benefit trumps profit (unlike typical L3C legislation).  A stark difference between the two is that BenCorp Law requires third-party certification and Flex Law does not.  Not surprising, BenCorp Law was originally crafted by B Lab, an organization in the business of third-party certification.   This is not an accusation, just a fact. [...]


  4. [...] Both laws require that the corporation specify a social benefit (or special purpose) in their articles of incorporation, both require the business to maintain a certain amount of transparency with annual reporting, and neither requires that the social benefit trumps profit (unlike typical L3C legislation).  A stark difference between the two is that BenCorp Law requires third-party certification and Flex Law does not.  Not surprising, BenCorp Law was originally crafted by B Lab, an organization in the business of third-party certification.   This is not an accusation, just a fact. [...]


  5. [...] [The following post is written by Wendel Rosen Green Business Practice Group Partner Donald S. Simon in response to a recent article addressing legislation that allows for the formation of benefit corporations.  Regular readers of The Wendel Forum will remember we have covered Benefit Corporation in prior episodes.] [...]


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