From the Harvard Law Review – Volume 4, Issue 2
Delaware has innovated in the benefit corporation area by creating its own statutory framework to compete with the Model Benefit Corporation Legislation (the “Model”), and when Delaware talks, other states listen. This Article provides a comparative analysis of Delaware’s Public Benefit Corporation (“PBC”) law and the Model, and suggests that Delaware’s approach is superior in most areas. Despite Delaware’s superiority, this Article also calls for policymakers to consider amendments to Delaware’s PBC statute, including clarifying the priority of the specific public benefit purpose, requiring a partial-asset lock, imposing a charitable giving floor, providing more effective enforcement mechanisms, and reconfiguring the current re- porting requirements. Social enterprise legal forms are extraordinarily recent additions to the list of possible business entity types. While Delaware’s PBC law is likely to have significant influence on social enterprise statutes, continued innovation in this field, from inside and outside of Delaware, is both likely and necessary.
The full article can be found here.