SC Benefit Corporation Bill Signed into Law
PRESS RELEASE -
Governor Haley (R) signed HB 4766 today, bringing more freedom to business in the South. The legislation, sponsored by Rep. Tommy Stringer (R-Greer), creates a new class of corporation in South Carolina called benefit corporations that are legally required to pursue the creation of a material positive impact on society and the environment, while meeting higher standards of accountability and transparency.
Current law requires corporations to prioritize the financial interests of shareholder over the interests of workers, communities, and the environment. Benefit corporation legislation not only gives businesses the freedom and legal protection to use business for a higher purpose than maximizing profits, but it gives individual citizens something positive for which to advocate.
Benefit Corporations are identical to existing SC corporations except that a benefit corporation is required to: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) expand fiduciary duty to require consideration of the interests of employees, community and the environment when making decisions; and 3) publicly report annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard.
South Carolina joins Louisiana, which enacted benefit corporation legislation in early June to become the first states in the South to offer this new tool for community-minded entrepreneurs and investors. They join seven other states in creating a new corporate form giving entrepreneurs the freedom to redefine success in business.New Jersey,Virginia,Hawaii,California,New York,Vermont and Maryland have all passed similar legislation and Illinois, Pennsylvania, and North Carolina are moving forward. Legislation has enjoyed strong bi-partisan support in every state.
Rep. Tommy Stringer commented, “By passing the South Carolina Benefit Corporation Act, we have joined the vanguard of states that are looking beyond government programs to solve our social problems. This inventive legislation will unleash the generosity of existing South Carolina businesses who wish to promote their commitment to corporate responsibility. Furthermore, this legislation enhances our ability to attract new businesses to our state that are willing to invest in our future. I appreciate the strong bi-partisan support and the support of Gov. Haley that allowed this legislation to become a reality.