Conn. Gen. Stat. § 33-1351

Current with legislation from the 2024 Regular and Special Sessions.

Section 33-1351 - Definitions

As used in this section and sections 33-1352 to 33-1364, inclusive:

(1) "Benefit corporation" means a business corporation (A) that has elected to become subject to the provisions of sections 33-1352 to 33-1364, inclusive, and (B) whose status as a benefit corporation has not been terminated pursuant to section 33-1356.

(2) "Benefit director" means either (A) the director designated as the benefit director of a benefit corporation pursuant to section 33-1359, or (B) a person with one or more of the powers, duties or rights of a benefit director under section 33-1359 to the extent that such person has been granted all or part of the authority to manage the business and affairs of the corporation by a shareholder agreement that complies with section 33-717.

(3) "Benefit enforcement proceeding" means any claim or action for (A) the failure of a benefit corporation to pursue or create a general public benefit or any specific public benefit purpose set forth in its certificate of incorporation, or (B) the violation of any obligation, duty or standard of conduct under sections 33-1352 to 33-1364, inclusive.

(4) "Benefit officer" means the individual designated as the benefit officer of a benefit corporation pursuant to section 33-1361.

(5) "Business corporation" means a corporation whose internal affairs are governed by chapter 601.

(6) "Charitable organization" means any organization that is exempt from federal income tax under Section 501(a) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, and that the United States Treasury Department has expressly determined, by letter, to be an organization that is described in Section 501(c)(3) of said Internal Revenue Code.

(7) "General public benefit" means a material positive impact on both society and the environment, taken as a whole, as assessed against a third-party standard, from the business and operations of a benefit corporation.

(8) "Independent" means having no material relationship with a benefit corporation or a subsidiary of the benefit corporation, provided a person who serves as a benefit director or benefit officer does not lack independence solely by serving in such capacity.

(9) "Legacy preservation provision" means a provision in the certificate of incorporation adopted in accordance with section 33-1355.

(10) "Material relationship" means a relationship between a person and a benefit corporation or any of its subsidiaries if any of the following apply:

(A) The person is, or has been within the last three years, an employee other than a benefit officer of the benefit corporation or a subsidiary;

(B) an immediate family member of the person is, or has been within the last three years, an executive officer other than a benefit officer of the benefit corporation or a subsidiary; or

(C) there is beneficial or record ownership of five per cent or more of the outstanding shares of the benefit corporation, calculated on the assumption that all outstanding rights to acquire shares in the benefit corporation had been exercised, by (i) the person, or (ii) an entity (I) of which the person is a director, an officer or a manager; or (II) in which the person owns beneficially or of record five per cent or more of the outstanding equity interests, calculated on the assumption that all outstanding rights to acquire equity interests in the entity had been exercised.

(11) "Minimum status vote" means

(A) in the case of a business corporation, in addition to any other required approval or vote, the satisfaction of the following conditions:

(i) The shareholders of every class or series shall be entitled to vote as a separate voting group on the corporate action regardless of a limitation stated in the certificate of incorporation or bylaws on the voting rights of any class or series; and

(ii) the corporate action is approved by the vote of shareholders of each class or series entitled to cast at least two-thirds of the votes that shareholders of the class or series are entitled to cast on the action; and

(B) in the case of a domestic entity other than a business corporation, in addition to any other required approval, vote or consent, the satisfaction of the following conditions:

(i) The holders of each class or series of equity interest in the entity that are entitled to receive a distribution of any kind from the entity shall be entitled to vote on or consent to the action regardless of any otherwise applicable limitation on the voting or consent rights of any such class or series; and

(ii) the action is approved by the vote or written consent of the holders described in subparagraph (B)(i) of this subdivision entitled to cast at least two-thirds of the votes that all of those holders are entitled to cast on the action.

(12) "Publicly traded corporation" means a business corporation that has shares listed on a national securities exchange or traded in a market maintained by one or more members of a national securities association.

(13) "Specific public benefit" includes:

(A) Providing low-income or underserved individuals or communities with beneficial products or services;

(B) promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;

(C) protecting or restoring the environment;

(D) improving human health;

(E) promoting the arts, sciences or advancement of knowledge;

(F) increasing the flow of capital to other benefit corporations or similar entities whose purpose is to benefit society or the environment; and

(G) conferring any other particular benefit on society or the environment.

(14) "Subsidiary" means, in relation to a person, an entity in which the person owns beneficially or of record fifty per cent or more of the outstanding equity interests.

(15) "Third-party standard" means a recognized standard for defining, reporting and assessing corporate social and environmental performance that:

(A) Assesses the effect of its business and operations upon the interests listed in subparagraphs (B), (C), (D) and (E) of subdivision (1) of subsection (a) of section 33-1358;

(B) is developed by an entity that is independent; and

(C) makes publicly available the following information about the development and revision of the standard:

(i) The identity of the directors, officers, material owners, and the governing body of the entity that developed and controls revisions to the standard;

(ii) the process by which revisions to the standard and changes to the membership of the governing body are made; and

(iii) an accounting of the revenue and sources of financial support for such entity, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest.

Conn. Gen. Stat. § 33-1351

( P.A. 14-217, S. 141.)

Added by P.A. 14-0217, S. 141 of the Connecticut Acts of the 2014 Regular Session, eff. 10/1/2014.