Hybrid Corporations: Emerging Business Structures

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Hybrid Corporations: Emerging Business Structures Evaluating Flexible Purpose, Social Purpose and Benefit Corporations; Legal Considerations for Documentation TUESDAY, FEBRUARY 14, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: David A. Levitt, Principal, Adler & Colvin, San Francisco LaVerne Woods, Partner and Chair, Tax-Exempt Organizations Practice, Davis Wright Tremaine, Seattle The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 HYBRID CORPORATIONS: EMERGING BUSINESS STRUCTURES LaVerne Woods David A. Levitt Davis Wright Tremaine LLP Adler & Colvin 1201 Third Avenue, Suite Montgomery Street, Suite 1220 Seattle, WA San Francisco, CA (206) (415)

6 What Is A Hybrid Corporation? Blend business purpose with a social or charitable purpose Directors can take non-economic issues into consideration when making business decisions 6

7 Emerging Hybrid Entities Benefit Corporations Flexible Purpose Corporations Social Purpose Corporations L3Cs 7

8 Why Do We Need These New Hybrid Corporations Anyway? Corporate mission otherwise may be limited to a financial purpose Director fiduciary duties otherwise may require maximizing wealth (Revlon duties) How much of an issue outside of a Revlon-type sale of company situation? 8

9 What Is a Constituency Statute And Isn t That Enough? 9

10 Benefit Corporations Must create a general public benefit: A material positive impact on society and the environment, taken as a whole, as assessed against a third-party standard. 10

11 Benefit Corporations General public benefit / 3 rd party standard Specific public benefits? Director fiduciary duties Transparency / Reporting Accountability: benefit enforcement 11

12 Benefit Corporations How do I become a benefit corporation? Articles of Incorporation Minimum Status Vote Select a 3 rd party standard 12

13 What Is The Difference Between a Benefit Corporation And a B Corporation? 13

14 Flexible Purpose Corporation Specialized purpose in Articles Protection for director decisionmaking Dissenter s rights in formation Transparency / Reporting 14

15 Benefit vs. Flexible Purpose General public benefit vs. specific special purpose 3 rd party standard vs. transparency only Director duties: may vs. shall Accountability / right of enforcement 15

16 What Is an L3C And How Is That Different From a Hybrid Corporation? 16

17 When Would A Hybrid Corporation Be Appropriate? Alternative to a traditional corporation? Alternative to an exempt organization? Subsidiary of an exempt organization? 17

18 Ask Why Is The Entity Being Formed? Mission vs. money Expand scope of operations? Attract investors? Customers? Future sale of business? 18

19 Ask Where Is The Money Coming From? Grants and contributions? Private equity investors? Loans? Other? 19