Saturday, 20 July 2013
The B Corp—A Big Change Coming for IP Investment and Practice or What Would Myriad do?
On July 17, 2013, the Governor of one of the most, if not the most popular state to incorporate, Delaware, signed into law the B Corp (or public benefit corporation). What is the B Corp? According to the press release by the Governor’s office, the B Corp is “a new kind of socially conscious for-profit corporation intended to operate in a responsible and sustainable manner. Their affairs are to be conducted for the benefit not only of stockholders, but also for public interest and those affected by the corporation’s activities.” The press release also states:
A public benefit corporation (PBC) will be formed in the same manner as any other corporation formed under the Delaware General Corporation Law. However, in order to be a PBC, the corporation’s certificate of incorporation must identify one or more specific public benefits and must have a name that clearly identifies its status as a PBC. Public benefits for which corporations may be formed include, but are not limited to, those of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technical nature.
At least once every two years, a public benefit corporation must send its stockholders a statement with respect to its promotion of the public benefit(s) identified in its charter, as well as its promotion of the best interests of those materially affected by the corporation’s conduct.
Here is an article by Chrystia Freeland in The New York Times (July 18, 2013) titled Capitalism, but With a Little Heart about the B Corp. How will this impact new companies (and existing companies) in the technology sector? (any comments from the tax experts?) Would you be more willing to invest in a company if you knew it was a “B Corp?” Will “B Corps” use IP differently than other types of entities? If Myriad was a “B Corp” would its actions be different? What do you think?