As used in this Act, unless the context otherwise requires, the words and phrases defined in this Section shall have the meanings set forth herein. "Benefit corporation" means a corporation organized under the Business Corporation Act of 1983 or a foreign benefit corporation organized under the laws of another state, authorized to transact business in this State, and: (1) which has elected to become subject to this Act; and (2) whose status as a benefit corporation has not been terminated under Section 2.10. "Benefit director" means either: (1) the director designated as the benefit director of a benefit corporation under Section 4.05; or (2) a person with one or more of the powers, duties, or rights of a benefit director to the extent provided in the bylaws pursuant to Section 4.05. "Benefit enforcement proceeding" means a claim or action for: (1) the failure of a benefit corporation to pursue or create general public benefit or a specific public benefit set forth in its articles of incorporation; or (2) a violation of an obligation, duty, or standard of conduct under this Act. "Benefit officer" means the individual designated as the benefit officer of a benefit corporation under Section 4.15. "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. "Independent" means having no material relationship with a benefit corporation or a subsidiary of the benefit corporation. A person serving as benefit director or benefit officer may be considered independent. For the purposes of this definition, a percentage of ownership in an entity shall be calculated as if all outstanding rights to acquire equity interests in the entity have been exercised. 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 3 years, an employee other than a benefit officer of the benefit corporation or a subsidiary of the benefit corporation; (2) an immediate family member of the person is, or has been within the last 3 years, an executive officer other than a benefit officer of the benefit corporation or its subsidiaries; or (3) there is beneficial or record ownership of 5% or more of the outstanding shares of the benefit corporation by: (A) the person; or (B) 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 5% or more of the outstanding equity interests. "Minimum status vote" means that: (1) in the case of a corporation, in addition to any other approval or vote required by the Business Corporation Act of 1983, the bylaws, or the articles of incorporation: (A) the shareholders of every class or series shall be entitled to vote on the corporate action regardless of a limitation stated in the articles of incorporation or bylaws on the voting rights of any class or series; and (B) the corporate action shall be approved by vote of the outstanding shares of each class or series entitled to vote by at least two-thirds of the votes that all shareholders of the class or series are entitled to cast on the action; and (2) in the case of an entity organized under the laws of this State that is not a corporation, in addition to any other approval, vote, or consent required by the statutory law, if any, that principally governs the internal affairs of the entity or any provision of the publicly filed record or document required to form the entity, if any, or of any agreement binding on some or all of the holders of equity interests in the entity: (A) the holders of every 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 class or series; and (B) the action must be approved by a vote or consent of at least two-thirds of such holders. "Specific public benefit" means: (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 ordinary 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; or (7) the accomplishment of any other particular benefit for society or the environment. "Subsidiary" of a person means an entity in which the person owns beneficially or of record 50% or more of the outstanding equity interests. For the purposes of this subsection, a percentage of ownership in an entity shall be calculated as if all outstanding rights to acquire equity interests in the entity have been exercised. "Third-party standard" means a standard for defining, reporting, and assessing overall corporate, social, and environmental performance that: (1) is a comprehensive assessment of the impact of the business and the business' operations upon the considerations listed in subdivisions (a)(1)(B) through (a)(1)(E) of Section 4.01; (2) is developed by an entity that has no material financial relationship with the benefit corporation or any of its subsidiaries; (3) is developed by an entity that is not materially financed by any of the following organizations and not more than one-third of the members of the governing body of the entity are representatives of: (A) associations of businesses operating in a specific industry, the performance of whose members is measured by the standard; (B) businesses from a specific industry or an association of businesses in that industry; or (C) businesses whose performance is assessed against the standard; and (4) is developed by an entity that: (A) accesses necessary and appropriate expertise to assess overall corporate social and environmental performance; and (B) uses a balanced multi-stakeholder approach, including a public comment period of at least 30 days to develop the standard; and (5) makes the following information regarding the standard publicly available: (A) the factors considered when measuring the overall social and environmental performance of a business and the relative weight, if any, given to each of those factors; (B) the identity of the directors, officers, any material owners, and the governing body of the entity that developed, and controls revisions to, the standard, and the process by which revisions to the standard and changes to the membership of the governing body are made; and (C) an accounting of the sources of financial support for the entity, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest. and been terminated under Section 2.10. of a benefit corporation under Section 4.05; or or rights of a benefit director to the extent provided in the bylaws pursuant to Section 4.05. or create general public benefit or a specific public benefit set forth in its articles of incorporation; or of conduct under this Act. years, an employee other than a benefit officer of the benefit corporation or a subsidiary of the benefit corporation; has been within the last 3 years, an executive officer other than a benefit officer of the benefit corporation or its subsidiaries; or more of the outstanding shares of the benefit corporation by: officer, or a manager; or or of record 5% or more of the outstanding equity interests. other approval or vote required by the Business Corporation Act of 1983, the bylaws, or the articles of incorporation: shall be entitled to vote on the corporate action regardless of a limitation stated in the articles of incorporation or bylaws on the voting rights of any class or series; and vote of the outstanding shares of each class or series entitled to vote by at least two-thirds of the votes that all shareholders of the class or series are entitled to cast on the action; and laws of this State that is not a corporation, in addition to any other approval, vote, or consent required by the statutory law, if any, that principally governs the internal affairs of the entity or any provision of the publicly filed record or document required to form the entity, if any, or of any agreement binding on some or all of the holders of equity interests in the entity: 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 class or series; and consent of at least two-thirds of such holders. or communities with beneficial products or services; or communities beyond the creation of jobs in the ordinary course of business; knowledge; a public benefit purpose; or benefit for society or the environment. the business and the business' operations upon the considerations listed in subdivisions (a)(1)(B) through (a)(1)(E) of Section 4.01; financial relationship with the benefit corporation or any of its subsidiaries; financed by any of the following organizations and not more than one-third of the members of the governing body of the entity are representatives of: specific industry, the performance of whose members is measured by the standard; association of businesses in that industry; or against the standard; and to assess overall corporate social and environmental performance; and including a public comment period of at least 30 days to develop the standard; and standard publicly available: overall social and environmental performance of a business and the relative weight, if any, given to each of those factors; material owners, and the governing body of the entity that developed, and controls revisions to, the standard, and the process by which revisions to the standard and changes to the membership of the governing body are made; and support for the entity, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest. (805 ILCS 40/Art. 2 heading) Article 2. Formation of Benefit Corporations
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