DeSaulnier Social Purpose Corporations Bill Headed to Governor

August 20, 2014 · 22 comments

A measure by Senator Mark DeSaulnier (D-Concord) to encourage the formation of Social Purpose Corporations is headed to Governor Brown. This bill strengthens previous efforts by Senator DeSaulnier to encourage companies to incorporate with a special purpose.

“It is important that California provide options to socially conscious entrepreneurs,” Senator DeSaulnier said. “This bill will help encourage the formation of businesses driven to do more than just maximize profits for their shareholders. SB 1301 ensures that California remains on the forefront of promoting socially conscious business practices.”

Senator DeSaulnier carried legislation (SB 201) in 2011 to establish a new corporate form—a Flexible Purpose Corporation. This new corporate form integrated the for-profit philosophy of the traditional corporation along with a “special purpose” mission to encourage and expressly permit companies to pursue one or more charitable or public purpose activities in addition to creating economic value for shareholders. Washington and Delaware followed California’s lead in creating similar corporate forms.

SB 1301 renames Flexible Purpose Corporations as Social Purpose Corporations, to more accurately reflect the spirit of the law. SB 1301 seeks to strengthen and clean up the corporate code created under SB 201, by clarifying that directors of Social Purpose Corporations are required—and not just encouraged—to consider a special purpose. This bill also cleans up California code to better conform to other states’ guidelines and new corporate laws that have proven successful in encouraging companies to incorporate with a special mission.

According to the Secretary of State, a total of 62 Flexible Purpose Corporations have been formed since January 1, 2012.

1 The government now requires August 20, 2014 at 4:56 PM

corporations to consider charity.

Darn glad I incorporated in a different state.

I’ll decide how to use my profits, not this communistic government of CA.

But its getting to be time to move on, so soon I’ll be closing the business in CA. I will be moving to another state where there is still a little freedom, perhaps TX. People will be put out of work, no taxes will be paid, I’ll be a lot happier and financially healthy.

Go thank Marky for that.

2 Elwood August 20, 2014 at 5:07 PM

I try to take solace in the fact that Mark can do less damage in D.C. as a junior member of the minority party.

3 ..... August 20, 2014 at 5:16 PM

How many bills have been introduced and laws passed to clean up the previous bills/laws?

Can’t they get it right the first time?

4 Bubba August 20, 2014 at 5:23 PM

What????
A special purpose?
I’ve got a “SPECIAL PURPOSE”…….. Navin Johnson

5 Noj August 20, 2014 at 5:48 PM

Little late aren’t you Mark? They’ve all left for Texas.

6 Bubba August 20, 2014 at 6:08 PM

I’m sorry… “Social Purpose”…..that’s different.
Never mind.

7 oldman August 20, 2014 at 6:44 PM

This is what happens when you elect liberals. It will continue.

8 What a load August 20, 2014 at 6:47 PM

Is there some kind of competition between DeSaulnier and Bonilla to see who can introduce the highest number of idiotic laws?

9 mutts August 20, 2014 at 6:52 PM

Bubba, you think like I do! Lol
Its fitting, though, the jerk!

10 RIII August 20, 2014 at 7:54 PM

I have yet to see or hear of any legislation being proposed addressing where the costs of all of these “New” illegal aliens will be covered. There will be a major increase of cost to everything in the infrastructure of this country and not one “Elected Representative” will be heard discussing these costs. Where are our local representatives on this issue? Consider the immediate costs to our school systems, our medical facilities and the financial impact to our local communities. Legislation to control a shrinking business community is not the answer.

11 Dorothy August 20, 2014 at 7:58 PM

I thought all corporations were special purpose – their own purpose for incorporating in the first place. They are also socially conscious since each corporation has employees that must work together – bosses vs wage slaves.

12 Anon August 20, 2014 at 8:16 PM

YA! Special Purpose? Didn’t South Park have an episode or two on this?

13 Lorelei August 20, 2014 at 9:50 PM

What a waste of carbon……..

14 @RIII (10) August 20, 2014 at 9:57 PM

Included in that “financial impact ON our local communities” is the cost of crime, breaking all kinds of laws, the impact on law enforcement, housing the criminals, feeding them, court costs, DMV costs, licensing illegals, causing accidents and not carrying insurance, etc. etc. etc. etc. etc………………

15 Wellgeez August 21, 2014 at 1:02 AM

Flexible Purpose. Social Purpose. These are additional options for incorporation, not requirements…

16 Pyrrhus August 21, 2014 at 9:28 AM

MDUSD seriously needs to get their act together. The lack of reading comprehension here at Claycord should put all those teachers to shame. Where exactly does it say that it is a requirement of all corporations? It is an option for a corporation to take on the designation which allows the corporation to pursue charity over profits. This protects the corporation and it’s officers from investors that could sue for violating the duties of maximizing profits over charity work. The designation also eases the requirements for the company to acquire program related investments from private foundations.

17 Bob the Repairman August 21, 2014 at 9:34 AM

Again, it must be election season!!!

18 foonman August 21, 2014 at 9:54 AM

@what a load……….wondering the same thing? Who will win the battle on who can introduce the most interference in our everyday lives? We are a nation of laws………..but it seems common sense went out the window a few years ago and now we are a nation overlorded by and for lawyers with make-work projects. Not necessarily DeSaulnier and Bonilla but the entire system of government……….I’ll go lay down now…..I feel better….

19 Frambley1 August 21, 2014 at 12:04 PM

There should not be ANY corporations that exist in our country that do not benefit society as a whole. We as a society allow corporations to exist. What other purpose would there be to allowing that other than to benefit society?

20 jtkatec August 21, 2014 at 12:32 PM

More MBA speak, it’s a great way to distract the public from the real issues

21 Safety Scond August 21, 2014 at 10:51 PM

Democrat voters….you own this pyhsco politics! Who the F would ever want to start a business in this insane state. Young middle-class people of California have a very dismall future. Your only hope is to elect NEW blood; from city councils to the US senate! You must purge all career political whores!

22 Pyrrhus August 22, 2014 at 1:32 PM

@Safety Scond I don’t vote based on party, I vote for the most qualified and who I think will do a good job. I’m also a young middle class person. My future is great and so is the future of my wife. There are many job opportunities for our fields of work, and we aren’t even in the tech industry. Believe it or not, the economy in the Bay Area is doing well. San Francisco unemployment rate is better than it was before the recession.

http://www.mercurynews.com/business/ci_26173290/bay-area-jobless-rate-sinks-strong-june-job

Here’s a choice quote from the article, “http://www.mercurynews.com/business/ci_26173290/bay-area-jobless-rate-sinks-strong-june-job”

But by all means, you wackos can keep moving to Texas and Arizona. More jobs for the rest of us.

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