N.Y. Business Corporation Law § 1702: Definitions

§ 1702. Definitions.

As used in this article, unless the context otherwise requires, the

term:

(a) "Benefit corporation" means a business corporation incorporated

under this article and whose status as a benefit corporation has not

been terminated as provided in this article.

(b) "General public benefit" means 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.

(c) "Independent" means that a person has no material relationship

with a benefit corporation or any of its subsidiaries. A material

relationship between a person and a benefit corporation or any of its

subsidiaries will be conclusively presumed to exist if:

(1) the person is, or has been within the last three years, an

employee of the benefit corporation or any of its subsidiaries;

(2) an immediate family member of the person is, or has been within

the last three years, an executive officer of the benefit corporation or

any of its subsidiaries; or

(3) the person, or an entity of which the person is a director,

officer or other manager or in which the person owns beneficially or of

record five percent or more of the equity interests, owns beneficially

or of record five percent or more of the shares of the benefit

corporation. A percentage of ownership in an entity shall be calculated

as if all outstanding rights to acquire equity interests in the entity

had been exercised.

(d) "Minimum status vote" means that, in addition to any other

approval or vote required by this chapter, the certificate of

incorporation or a bylaw adopted by the shareholders:

(1) The holders of shares of every class or series that are entitled

to vote on the corporate action shall be entitled to vote as a class on

the corporate action; and

(2) The corporate action must be approved by vote of the shareholders

of each class or series entitled to cast at least three-quarters of the

votes that all shareholders of the class or series are entitled to cast

thereon.

(e) "Specific public benefit," includes:

(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.

(f) "Subsidiary" means an entity in which a person owns beneficially

or of record fifty percent or more of the equity interests. A percentage

of ownership in an entity shall be calculated as if all outstanding

rights to acquire equity interests in the entity had been exercised.

(g) "Third-party standard" means a recognized standard for defining,

reporting and assessing general public benefit that is:

(1) developed by a person that is independent of the benefit

corporation; and

(2) transparent because the following information about the standard

is publicly available:

(A) the factors considered when measuring the performance of a

business;

(B) the relative weightings of those factors; and

(C) the identity of the persons who developed and control changes to

the standard and the process by which those changes are made.