Article 17 of the Business Corporation Law (“BCL”) governs the incorporation and operation of benefit corporations. Business corporations formed as benefit corporations, in addition to business purposes, are formed for the purpose of creating a “general public benefit.” BCL §1702(b) provides that a “general public benefit” is a “material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation.”
To form a benefit corporation the filer must present a certificate of incorporation pursuant to §402 of the Business Corporation Law to the Department of State. The certificate of incorporation must include all of the statements required by BCL §402 including the corporation’s business purpose. Additionally, the certificate of incorporation must include a statement that “The corporation is a benefit corporation under Article 17 of the Business Corporation Law.” This statement is not a statement of purposes and should be set forth in a separate paragraph of the certificate of incorporation. A benefit corporation’s certificate of incorporation is not required to include a statement regarding general public benefit purpose.
The certificate of incorporation for a benefit corporation may include a statement of one or more “specific public benefit” purposes. "Specific public benefit" purposes include, but are not limited to: “(1) providing low-income or underserved individuals or communities with beneficial products or services; (2) promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business; (3) preserving the environment; (4) improving human health; (5) promoting the arts, sciences or advancement of knowledge; (6) increasing the flow of capital to entities with a public benefit purpose; and (7) the accomplishment of any other particular benefit for society or the environment” (BCL §1702(e)).
The name of a benefit corporation must comply with the provisions of §301 of the Business Corporation Law. Consent of the New York State Department of Financial Services is required if the benefit corporation’s name includes the word “benefit.”
The fee for filing the certificate of incorporation is $125.
Benefit corporations may also file a paper certificate of incorporation with the Department of State. A sample form is available on the Department’s website. The completed certificate of incorporation, together with the statutory filing fee, should be forwarded to the New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.
Election of an existing business corporation to become a benefit corporation
An existing business corporation may elect to become a benefit corporation by amending its certificate of incorporation to include a statement that “The corporation is a benefit corporation under Article 17 of the Business Corporation Law.” The certificate of amendment must be authorized by the “minimum status vote” of the shareholders (BCL §§1702(d) and 1704).
Termination of benefit corporation status
An existing benefit corporation may terminate its status as a benefit corporation by amending its certificate of incorporation to delete the statement that “The corporation is a benefit corporation under Article 17 of Business Corporation Law.” The certificate of amendment must be authorized by the “minimum status vote” of the shareholders (BCL §§1702(d) and 1704).
Benefit corporation stock certificates
Benefit corporation stock certificates must contain the following conspicuous language on the face of each certificate:
"This entity is a benefit corporation organized under Article Seventeen of the New York Business Corporation Law" (BCL 1709).
Annual benefit reports
Benefit corporations are required to file an annual report pursuant to Business Corporation Law §1708 within 120 days following the end of its fiscal year with the Department of State. The completed annual benefit report, together with the statutory filing fee of $60, should be forwarded to the New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.
The annual report must include a white cover sheet (“backer”) that sets forth the document’s title (Annual Report of (name of the benefit corporation) under Business Corporation Law section 1708) and the name and address of the individual to whom the receipt for the filing should be mailed.