AB742,3,7 6202.101 Application and effect of chapter. (1) General rule. This chapter
7shall be applicable to all benefit corporations.

AB742,3,12 8(2) Application of business corporation law generally. The existence of a
9provision of this chapter shall not of itself create an implication that a contrary or
10different rule of law is applicable to a business corporation that is not a benefit
11corporation. This chapter shall not affect any statute or rule that is applicable to a
12business corporation that is not a benefit corporation.

AB742,4,2 13(3) Laws applicable to benefit corporations. Except as otherwise provided
14in this chapter, ch. 180 shall be generally applicable to all benefit corporations. The
15specific provisions of this chapter shall control over the general provisions of ch. 180.

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1A benefit corporation may be simultaneously subject to this chapter and provisions
2of other chapters.

AB742,4,5 3(4) Organic records. A provision of the articles or bylaws of a benefit
4corporation may not relax, be inconsistent with, or supersede a provision of this
5chapter.

AB742,4,7 6202.102 Definitions; computation of ownership; independence. (1)
7Definitions. Unless the context clearly indicates otherwise, in this chapter:

AB742,4,108 (a) "Benefit corporation" means a business corporation that has elected to
9become subject to this chapter and whose status as a benefit corporation has not been
10terminated under s. 202.105 or 202.401 (5).

AB742,4,1211 (b) "Benefit director" means the person designated as the benefit director of a
12benefit corporation as provided in s. 202.302.

AB742,4,1513 (c) "Benefit enforcement proceeding" means any claim or action brought
14directly by a benefit corporation, or derivatively on behalf of a benefit corporation,
15against a director or officer for any of the following:

AB742,4,1716 1. Failure to pursue the general public benefit purpose of the benefit
17corporation or any specific public benefit purpose set forth in its articles.

AB742,4,1818 2. Violation of a duty or standard of conduct under this chapter.

AB742,4,2019 (d) "Benefit officer" means the officer of a benefit corporation, if any, designated
20as the benefit officer as provided in s. 202.304.

AB742,4,2121 (e) "Department" means the department of financial institutions.

AB742,4,2222 (f) "Entity" has the meaning given in s. 180.0103 (8).

AB742,5,223 (g) "General public benefit" means a material positive impact on society and the
24environment by the operations of a benefit corporation taken as a whole, as measured

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1by a 3rd-party standard, through activities that promote some combination of
2specific public benefits.

AB742,5,73 (h) "Independent" means that a person has no material relationship with a
4benefit corporation or any of its subsidiaries, either directly or as a shareholder,
5partner, member, or other owner or as a director, officer, or other manager of an entity
6that has a material relationship with the benefit corporation or any of its
7subsidiaries.

AB742,5,108 (i) "Minimum status vote" means that, in addition to any other approval or vote
9required by this chapter or ch. 180 or a bylaw adopted by the shareholders, at least
10one of the following applies:

AB742,5,1311 1. The holders of shares of every class or series shall be entitled to vote on the
12corporate action regardless of any limitation stated in the articles of incorporation
13or bylaws on the voting rights of any class or series.

AB742,5,1614 2. The corporate action must be approved by vote of the shareholders of each
15class or series entitled to cast at least two-thirds of the votes that all shareholders
16of the class or series are entitled to cast thereon.

AB742,5,1717 (j) "Service corporation" has the meaning given in s. 180.1901 (2).

AB742,5,1818 (k) "Specific public benefit" includes all of the following:

AB742,5,2019 1. Providing low-income or underserved individuals or communities with
20beneficial products or services.

AB742,5,2221 2. Promoting economic opportunity for individuals or communities beyond the
22creation of jobs in the normal course of business.

AB742,5,2323 3. Preserving the environment.

AB742,5,2424 4. Improving human health.

AB742,5,2525 5. Promoting the arts, sciences, or advancement of knowledge.

AB742,6,1

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16. Increasing the flow of capital to entities with a public benefit purpose.

AB742,6,32 7. The accomplishment of any other particular benefit for society or the
3environment.

AB742,6,54 (L) "Subsidiary" of a person means an entity in which the person owns
5beneficially or of record 50 percent or more of the outstanding equity interests.

AB742,6,86 (m) "Third-party standard" means a recognized standard for defining,
7reporting, and assessing corporate social and environmental performance that is all
8of the following:

AB742,6,99 1. Developed by a person that is independent of the benefit corporation.

AB742,6,1110 2. Transparent because all of the following information about the standard is
11publicly available:

AB742,6,1212 a. The factors considered when measuring the performance of a business.

AB742,6,1313 b. The relative weightings of the factors under subd. 2. a.

AB742,6,1514 c. The identity of the persons who developed and control changes to the
15standard and the process by which those changes are made.

AB742,6,18 16(2) Computation of ownership; independence. (a) For purposes of subs. (1) (h)
17and (L), a percentage of ownership in an entity shall be calculated as if all
18outstanding rights to acquire equity interests in the entity had been exercised.

AB742,6,1919 (b) For purposes of sub. (1) (h), all of the following apply:

AB742,6,2120 1. Serving as a benefit director or benefit officer does not make a person not
21independent.

AB742,6,2322 2. A material relationship between a person and a benefit corporation or any
23of its subsidiaries will be conclusively presumed to exist if any of the following apply:

AB742,6,2524 a. The person is, or has been within the last 3 years, an employee of the benefit
25corporation or any of its subsidiaries, other than as a benefit officer.

AB742,7,3

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1b. An immediate family member of the person is, or has been within the last
23 years, an executive officer, other than a benefit officer, of the benefit corporation
3or any of its subsidiaries.

AB742,7,74 c. The person, or an entity of which the person is a director, officer, or other
5manager or in which the person owns beneficially or of record 5 percent or more of
6the outstanding equity interests, owns beneficially or of record 5 percent or more of
7the outstanding shares of the benefit corporation.

AB742,7,10 8202.103 Formation of benefit corporations. A benefit corporation shall be
9formed in accordance with ch. 180, except that its articles shall also state that it is
10a benefit corporation.

AB742,7,16 11202.104 Election of an existing business corporation to become a
12benefit corporation. (1) Amendment. An existing business corporation may
13become a benefit corporation under this chapter by amending its articles so that they
14contain, in addition to the requirements of s. 180.0202, a statement that the
15corporation is a benefit corporation. The amendment shall not be effective unless it
16is adopted by at least the minimum status vote.

AB742,7,22 17(2) Fundamental transactions. If a corporation that is not a benefit
18corporation is a party to a merger, consolidation, or division or is the exchanging
19corporation in a share exchange, and the surviving, new, or any resulting corporation
20in the merger, consolidation, division, or share exchange is to be a benefit
21corporation, then the plan of merger, consolidation, division, or share exchange shall
22not be effective unless it is adopted by at least the minimum status vote.

AB742,8,2 23202.105 Termination of benefit corporation status. (1) Amendment. A
24benefit corporation may terminate its status as such and cease to be subject to this
25chapter by amending its articles to delete the provision required by ss. 202.103 and

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1202.104 to be stated in the articles of a benefit corporation. The amendment shall
2not be effective unless it is adopted by at least the minimum status vote.

AB742,8,5 3(2) Fundamental transactions. If a corporate plan would have the effect of
4terminating the status of a business corporation as a benefit corporation, the plan
5shall not be effective unless it is adopted by at least the minimum status vote.

AB742,8,11 8202.201 Corporate purposes. (1) General public benefit purpose. A
9benefit corporation shall have a purpose of creating general public benefit. This
10purpose is in addition to its purpose under s. 180.0301 and any specific purpose set
11forth in its articles under sub. (2).

AB742,8,16 12(2) Optional specific public benefit purpose. The articles of a benefit
13corporation may identify one or more specific public benefits that it is the purpose
14of the benefit corporation to create in addition to its purposes under s. 180.0301 and
15sub. (1). The identification of a specific public benefit under this subsection does not
16limit the obligation of a benefit corporation to create general public benefit.

AB742,8,19 17(3) Effect of purposes. The creation of general public benefit and specific
18public benefit as provided in subs. (1) and (2) shall be considered to be in the best
19interests of the benefit corporation.

AB742,8,23 20(4) Amendment. A benefit corporation may amend its articles to add, amend,
21or delete the identification of a specific public benefit that it is the purpose of the
22benefit corporation to create. The amendment shall not be effective unless it is
23adopted by at least the minimum status vote.

AB742,9,3

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1(5) Service corporations. A service corporation that is a benefit corporation
2is not limited by ss. 180.1903 and 180.1905 in its authority to create general public
3benefit or a specific public benefit.

AB742,9,11 6202.301 Standard of conduct for directors. (1) Consideration of
7interests. (a) Notwithstanding ss. 180.0302 (15) and 180.0827, in discharging the
8duties of their respective positions, the board of directors, committees of the board,
9and individual directors of a benefit corporation, in considering the best interests of
10the benefit corporation, shall consider the effects of any action or inaction on all of
11the following:

AB742,9,1212 1. The shareholders of the benefit corporation.

AB742,9,1413 2. The employees and workforce of the benefit corporation and its subsidiaries
14and suppliers.

AB742,9,1615 3. The interests of customers as beneficiaries of the general public benefit or
16specific public benefit purposes of the benefit corporation.

AB742,9,1917 4. Community and societal factors, including those of any community in which
18offices or facilities of the benefit corporation or its subsidiaries or suppliers are
19located.

AB742,9,2020 5. The local and global environment.

AB742,9,2421 6. The short-term and long-term interests of the benefit corporation, including
22benefits that may accrue to the benefit corporation from its long-term plans and the
23possibility that these interests may be best served by the continued corporate
24independence of the benefit corporation.

AB742,10,2

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17. The ability of the benefit corporation to accomplish its general public benefit
2purpose and any specific public benefit purpose.

AB742,10,63 (b) Notwithstanding ss. 180.0302 (15) and 180.0827, in discharging the duties
4of their respective positions, the board of directors, committees of the board, and
5individual directors of a benefit corporation, in considering the best interests of the
6benefit corporation, may consider any of the following:

AB742,10,87 1. The resources, intent, and conduct of any person seeking to acquire control
8of the corporation.

AB742,10,109 2. Any other pertinent factors or the interests of any other group that is deemed
10appropriate.

AB742,10,1511 (c) Under pars. (a) and (b), the board of directors, committees of the board, and
12individual directors of a benefit corporation are not required to give priority to the
13interests of any particular person or group referred to in pars. (a) or (b) over the
14interests of any other person or group unless the benefit corporation has stated in
15its articles its intention to give such priority.

AB742,10,19 16(2) Coordination with other provisions of law. The consideration of interests
17and factors in the manner required by sub. (1) does not constitute a violation of s.
18180.0801 or any other provision of ch. 180 and is in addition to the ability of directors
19to consider interests and factors as provided in s. 180.0827.

AB742,10,21 20(3) Exoneration from personal liability. A director of a benefit corporation
21is not personally liable, as such, for monetary damages for any of the following:

AB742,10,2322 (a) Any action taken as a director if the director performed the duties of his or
23her office in compliance with this section and the provisions of ch. 180.

AB742,10,2524 (b) Failure of the benefit corporation to pursue or create general public benefit
25or specific public benefit.

AB742,11,3

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1(4) Limitation on standing. A director does not have a duty to a person that
2is a beneficiary of the general public benefit purpose or a specific public benefit
3purpose of a benefit corporation arising from the status of the person as a beneficiary.

AB742,11,8 4202.302 Benefit director. (1) General rule. The board of directors of a
5benefit corporation shall include one director who shall be designated the "benefit
6director" and shall have, in addition to all of the powers, duties, rights, and
7immunities of the other directors of the benefit corporation, the powers, duties,
8rights, and immunities provided in this section.

AB742,11,14 9(2) Election, removal, and qualifications. The benefit director shall be
10elected, and may be removed, in the manner provided by subch. VIII of ch. 180, and
11shall be an individual who is independent. The benefit director may serve as the
12benefit officer at the same time as serving as the benefit director. The articles or
13bylaws of a benefit corporation may prescribe additional qualifications of the benefit
14director not inconsistent with this subsection.

AB742,11,25 15(3) Annual compliance statement. The benefit director shall prepare, and the
16benefit corporation shall include in the annual benefit report to shareholders
17required by s. 202.401, a statement whether, in the opinion of the benefit director,
18the benefit corporation acted in accordance with its general public benefit purpose
19and any specific public benefit purpose in all material respects during the period
20covered by the report and whether the directors and officers complied with ss.
21202.301 (1) and 202.303 (1), respectively. If in the opinion of the benefit director the
22benefit corporation or its directors or officers failed to comply with ss. 202.301 (1) and
23202.303 (1), then the statement of the benefit director shall include a description of
24the ways in which the benefit corporation or its directors or officers failed to comply
25with ss. 202.301 (1) and 202.303 (1).

AB742,12,3

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1(4) Status of actions. The acts of an individual in the capacity of a benefit
2director shall constitute for all purposes acts of that individual in the capacity of a
3director of the benefit corporation.

AB742,12,8 4(5) Alternative governance arrangements. If a benefit corporation has
5elected under s. 180.1821 not to have a board of directors, then the bylaws of the
6benefit corporation must provide that the shareholders who perform the duties of a
7board of directors shall include a person with the powers, duties, rights, and
8immunities of a benefit director.

AB742,12,13 9(6) Exoneration from personal liability. Notwithstanding s. 180.0828 and
10any provision of a benefit corporation's bylaws, a benefit director shall not be
11personally liable for any act or omission in the capacity of a benefit director unless
12the act or omission constitutes self-dealing, willful misconduct, or a knowing
13violation of law.

AB742,12,19 14202.303 Standard of conduct for officers. (1) General rule. Each officer
15of a benefit corporation shall consider the interests and factors described in s.
16202.301 (1) in the manner provided in that subsection when the officer has discretion
17to act with respect to a matter and it reasonably appears to the officer that the matter
18may have a material effect on the creation of general or specific public benefit by the
19benefit corporation or on any of the interests or factors referred to in s. 202.301 (1).

AB742,12,22 20(2) Coordination with other provisions of law. The consideration of interests
21and factors in the manner described in sub. (1) shall not constitute a violation of s.
22180.0841 or any other provision of ch. 180.

AB742,13,2 23(3) Exoneration from personal liability. An officer of a benefit corporation
24is not personally liable, as such, for monetary damages for any action taken as an

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1officer if the officer performed the duties of the position in compliance with this
2section and the provisions of ch. 180.

AB742,13,4 3202.304 Benefit officer. (1) Designation. A benefit corporation may have an
4officer designated the "benefit officer."

AB742,13,9 5(2) Functions. A benefit officer shall have the powers and duties, as provided
6in the bylaws and as determined by the board of directors, relating to the benefit
7corporation's purpose of creating general public benefit or specific public benefit. If
8a benefit corporation has a benefit officer, the duties of the benefit officer shall
9include preparing the benefit report required by s. 202.401.

AB742,13,16 10202.305 Right of action. (1) General rule. The duties of directors and
11officers under this chapter, and the general and any specific public benefit purpose
12of a benefit corporation, may be enforced only in a benefit enforcement proceeding.
13No person may bring an action or assert a claim against a benefit corporation or its
14directors or officers with respect to the duties of directors and officers under this
15chapter and the general and any specific public benefit purpose of the benefit
16corporation except in a benefit enforcement proceeding.

AB742,13,19 17(2) Parties with standing. A benefit enforcement proceeding may be
18commenced or maintained only directly by the benefit corporation or derivatively by
19any of the following:

AB742,13,2020 (a) A shareholder.

AB742,13,2121 (b) A director.