2023 Vermont Statutes › Title 11A - Vermont Business Corporations › Chapter 21 - Benefit Corporations › § 21.03. Definitions

§ 21.03. Definitions
(a) As used in this chapter:
(1) “Benefit corporation” means a corporation as defined in section 1.40 of this title whose articles of incorporation include the statement “This corporation is a benefit corporation.”
(2) “Benefit director” means:
(A) a director designated as a benefit director of a benefit corporation as provided in section 21.10 of this title; or
(B) a person with one or more of the powers, duties, or rights of a benefit director to the extent provided in the articles of incorporation or shareholder agreement of a close corporation pursuant to subsection 21.10(e) of this title.
(3) “Benefit officer” means the officer of a benefit corporation, if any, designated as the benefit officer as provided in section 21.12 of this title.
(4) “General public benefit” means a material positive impact on society and the environment, as measured by a third-party standard, through activities that promote some combination of specific public benefits.
(5) “Independent” means that a person has no material relationship with a benefit corporation or any of its subsidiaries (other than the relationship of serving as the benefit director or benefit officer), either directly or as an owner or manager of an entity that has a material relationship with the benefit corporation or any of its subsidiaries. A material relationship between a person and the benefit corporation or any of its subsidiaries will be conclusively presumed to exist if:
(A) the person is, or has been within the last three years, an employee of the benefit corporation or any of its subsidiaries, other than as a benefit officer;
(B) an immediate family member of the person is, or has been within the last three years, an executive officer, other than a benefit officer, of the benefit corporation or any of its subsidiaries; or
(C) the person, or an entity of which the person is a manager or in which the person owns beneficially or of record five percent or more of the equity interests, owns beneficially or of record five percent or more of the shares of the benefit corporation.
(6) “Specific public benefit” includes:
(A) providing low income or underserved individuals or communities with beneficial products or services;
(B) promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;
(C) preserving or improving the environment;
(D) improving human health;
(E) promoting the arts or sciences or the advancement of knowledge;
(F) increasing the flow of capital to entities with a public benefit purpose; and
(G) the accomplishment of any other identifiable benefit for society or the environment.
(7) “Subsidiary” of a person means an entity in which the person owns beneficially or of record 50 percent or more of the equity interests.
(8) “Third-party standard” means a recognized standard for defining, reporting, and assessing corporate social and environmental performance that:
(A) is developed by a person that is independent of the benefit corporation; and
(B) is transparent because the following information about the standard is publicly available:
(i) the factors considered when measuring the performance of a business;
(ii) the relative weightings of those factors; and
(iii) the identity of the persons who developed and control changes to the standard and the process by which those changes are made.
(b) For purposes of subdivisions (a)(5)(C) and (7) of this section, a percentage of ownership in an entity shall be calculated as if all outstanding rights to acquire equity interests in the entity had been exercised. (Added 2009, No. 113 (Adj. Sess.), § 1, eff. July 1, 2011; amended 2011, No. 146 (Adj. Sess.), § 1.)