Question

Benefit corporations differ from traditional corporations in three main ways. The main purpose is to benefit the ___ , so directors must consider the impact of their decisions on society and the ___ . Shareholders have an additional right of private action, called a ___ , that allows them to sue the corporation for failure to pursue the purpose. Finally, benefit corporations must issue an annual ___on its performance and include a third-party standard of assessment.

Fill in the blanks with words that would best complete the passage.

public

environment

benefit enforcement proceeding

financial statement

benefit report

shareholders

IRS

derivative suit

Answer 1

1. The main purpose is to benefit the public

2. Directors must consider the impact of their decisions on society and environment

3. Shareholders have additional rights of private action called benefit enforcement proceeding

4. benefit corporations must issue an annual benefit report.

Benefits cooperations are for-profit organizations whose aim is to benefit the public as a whole rather than the limit number of shareholders. The directors of the company consider the impact of their actions on the environment, public, and society as a whole. Thus the company takes a view of a larger picture when making decisions. Shareholders through benefit enforcement proceeding can enforce the corporation to pursue the stated objectives.