New York § 1702 - 1702Definitions

§ 1702. 1702Definitions

§ 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.