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Chapter 156E of the Massachusetts General Laws became effective on December 1, 2012.  It provides for “benefit corporations,” a unique business or professional corporation whose purpose is not only to serve the interests of the shareholders, but also to “create a material, positive impact on society and the environment.”

The 2015 supplement to Massachusetts Corporation Law & Practice has added a chapter on Benefit Corporations.  The actual incorporation of Benefit Corporations is done under Chapter 156A, the professional corporation statute, or Chapter 156D, the business corporation statue. 156E differs from these sections by requiring Directors to consider societal and environmental factors in making decisions and mandating an annual report describing how a public benefit has been pursued and measuring performance.

Over half the states have passed Benefit Corporations legislation.  B Corp, the nonprofit organization that wrote model legislation for this type of business organization, provides optional B Corp certification and guidance for individual businesses.

For more information, see our Law About Benefit Corporations.

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