On January 1, 2014, Nevada will be added to the growing list of states that allow the formation of benefit corporations, as well as enable existing corporations to become benefit corporations. This simple designation can be done at the time of formation by checking a box on the articles and adding the general or specific benefit. Existing entities can elect to become a benefit corporation by amending their existing articles of incorporation.
A benefit corporation “may be organized to pursue a general public benefit or a specific public benefit set forth in the articles.” While a normal for-profit corporation has a fiduciary duty to its shareholders, a benefit corporation has a fiduciary duty to both its shareholders and the benefit it has set forth.
For a complete list of states where benefit corporation legislation has passed, go here. For more information on Assembly Bill 89 (AB 89), which authorizes the formation of benefit corporations in Nevada, go here.