On June 12, 2012, South Carolina become the tenth state to adopt benefit corporation legislation. The new corporate entity type is effective immediately. Existing firms can switch to this new entity type with at least a two-thirds shareholder vote.
The provisions of this South Carolina statute are consistent with the boilerplate benefit corporation legislation promoted by B Lab, a non-profit corporate social responsiblity (CSR) auditor based in Pennsylvania. Firms incorporating under this law must adopt and be assessed under an independent third party CSR standard, such as those provided be B Lab, Ceres, Green Seal, GRI, People4Earth, etc.
Benefit corporations in South Carolina must provide a "specific public benefit." They must also consider the needs of many constituencies above and beyond financial returns for shareholders. The lists of these public benefits and constituencies is identical to those of Louisiana, therefore please refer to yesterday's article about Louisiana's new benefit corporation statute for more detail.
In approving benefit corporations, South Carolina becomes the tenth state to do so, following California, Hawaii, Louisiana, Maryland, New Jersey, New York, Vermont, Virginia, and Washington State.
A full list of states with benefit corporation statutes is available on my website, along with a listing of companies that have adopted this new corporate entity type.
Craig R. Everett, PhD
Graziadio School of Business and Management