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The Florida Senate

2021 Florida Statutes (Including 2021B Session)

Title XXXVI BUSINESS ORGANIZATIONS
Chapter 607 FLORIDA BUSINESS CORPORATION ACT Entire Chapter
SECTION 502
Definitions.
F.S. 607.502
607.502 Definitions.—As used in this part, unless the context otherwise requires, the term:
(1) “Benefit director” means:
(a) The director designated as the benefit director of a social purpose corporation under s. 607.508; 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 bylaws under s. 607.508.
(2) “Benefit enforcement proceeding” means a claim or action for:
(a) The failure of a social purpose corporation to pursue or create a public benefit or a specific public benefit established in its articles of incorporation; or
(b) A violation of any obligation, duty, or standard of conduct under this part.
(3) “Benefit officer” means the individual designated as the benefit officer of a social purpose corporation under s. 607.510.
(4) “Independent” means not having a material relationship with the social purpose corporation or a subsidiary of the social purpose corporation. A person does not have a material relationship solely by virtue of serving as the benefit director or benefit officer of the social purpose corporation or a subsidiary of the social purpose corporation. In determining whether a director or officer is independent, a material relationship between an individual and a social purpose corporation or any of its subsidiaries will be conclusively presumed to exist, at the time independence is to be determined, if any of the following apply:
(a) The individual is or was within the prior 3 years an employee, other than a benefit officer, of the social purpose corporation or a subsidiary.
(b) An immediate family member of the individual is or was within the prior 3 years an executive officer, other than a benefit officer, of the social purpose corporation or a subsidiary.
(c) When ownership is calculated as if all outstanding rights to acquire equity interests in the social purpose corporation had been exercised, there is beneficial or record ownership of 5 percent or more of the outstanding shares of the social purpose corporation by:
1. The individual; or
2. An entity:
a. Of which the individual is a director, an officer, or a manager; or
b. In which, when ownership is calculated as if all outstanding rights to acquire equity interests in the entity had been exercised, the individual owns beneficially or of record 5 percent or more of the outstanding equity interests.
(5) “Minimum status vote” means:
(a) In the case of a corporation that is to become a social purpose corporation, whether by amendment of the articles of incorporation or by way of or pursuant to a merger, conversion, or share exchange; a social purpose corporation whose articles of incorporation are to be amended pursuant to s. 607.506(2); or a social purpose corporation that is to cease being a social purpose corporation, in addition to any other required approval or vote, the satisfaction of the following conditions:
1. The holders of each class or series of shares shall be entitled to vote as a separate voting group on the corporate action regardless of any limitation on the voting rights of any class or series stated in the articles of incorporation or bylaws.
2. The corporate action is approved by vote of each class or series of shares entitled to vote by at least two-thirds of the total votes of the class or series.
(b) In the case of a domestic entity, other than a corporation, which is to be simultaneously converted to a social purpose corporation or merged into a social purpose corporation, in addition to any other required approval, vote, or consent, the satisfaction of the following conditions:
1. The holders of each class or series of equity interest in the entity who are entitled to receive a distribution of any kind are entitled, as a separate voting group, to vote on or consent to the action regardless of any applicable limitation on the voting or consent rights of any class or series.
2. The action is approved by vote or consent of each class or series of equity interest described in subparagraph 1. who are entitled to vote by at least two-thirds of the votes or consent of the class or series.
(6) “Public benefit” means a positive effect, or the minimization of negative effects, taken as a whole, on the environment or on one or more categories of persons or entities, other than shareholders in their capacity as shareholders, of an artistic, charitable, economic, educational, cultural, literary, religious, social, ecological, or scientific nature, from the business and operations of a social purpose corporation. The term includes, but is not limited to, the following:
(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) Protecting or restoring the environment.
(d) Improving human health.
(e) Promoting the arts, sciences, or advancement of knowledge.
(f) Increasing the flow of capital to entities that have as their stated purpose the provision of a benefit to society or the environment.
(7) “Social purpose corporation” means a corporation that is formed, or has elected to become, subject to this part, the status of which as a social purpose corporation has not been terminated.
(8) “Specific public benefit” means a benefit identified as a purpose of the social purpose corporation which is set forth in the articles of incorporation and is consistent with a public benefit.
(9) “Subsidiary” means, in relation to a person other than an individual, an entity in which the person owns beneficially or of record 50 percent or more of the outstanding equity interests.
(10) “Third-party standard” means a recognized standard for defining, reporting, and assessing the societal and environmental performance of a business which is:
(a) Comprehensive, because it assesses the effect of the business and its operations upon the interests listed in s. 607.507(1)(a).
(b) Developed by an entity that is not controlled by the social purpose corporation.
(c) Credible, because it is developed by an entity that has access to necessary expertise to assess the overall effect of the business and uses a balanced, collaborative approach to develop the standard, including a period for public comment.
(d) Transparent, because the following information is publicly available:
1. The criteria considered under the standard when measuring the overall effect of the business and its operations upon the interests provided in s. 607.507(1)(a) and the relative weights, if any, of those criteria; and
2. The process used in the development and revision of the third-party standard regarding the identity of the directors, officers, material owners, and governing body of the entity that developed and controls revisions to the standard; the process by which revisions to the standard and changes to the membership of the governing body are made; and an accounting of the revenue and 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.
History.—s. 8, ch. 2014-209.