Benefit Company overview
The Benefit Company is a proposed new ‘opt-in’ legal company form. It will offer entrepreneurs and investors a legal framework to build and invest in businesses that meet higher standards of corporate purpose, accountability, and transparency.
Below are the additional obligations Benefit Companies will have. Importantly, there are no changes to other obligations under the existing Corporations Act.
Redefined Company Purpose
Benefit Companies will be required to including a binding corporate purpose in their constitution requiring the company to create a material positive impact on society and the environment (known as ‘general public benefit’) in addition to being financially successful.
Expanded Director Duties
The duties of the directors and officers will be redefined to require them to consider the interests of non-financial stakeholders in addition to the financial interests of shareholders.
Requirement to Report on Purpose
The company must report annually on overall social and environmental performance using a third party standard.