Well, well. I write a post on public benefit corporations, and I find out that the law has been updated a little. In an age of political division, Colorado’s HB 17-1200 received an unusual level of bi-partisan support. It passed the Colorado House 63-0 and the Senate 30-4. The bill didn’t make a lot of changes to public benefit corporation law, but it tweaked it a little to make the form easier for companies to use, and more specifically, easier for existing companies to switch to the public benefit form.
So what were the key changes? Here they are effective August of 2017:
- In keeping with a trend with nonprofits, public benefit corporations no longer have to include ‘PBC’ or ‘Public Benefit Corporation’ in their name. The legislature basically thought that the name change was making it harder for existing corporations to take advantage of this entity form. For anyone who has had to do it, it’s really easy to file the name change, but pretty difficult to notify everyone who needs to know about it. Banks, credit cards, vendors, customers, etc., etc.
- Cooperatives are now allowed to organize as a public benefit corporation. Again, this opens the entity form up to a wider variety of applications.
- Public benefit corporations now require a two-thirds shareholder vote before merging with another entity that would eliminate the ‘public benefit’ features of the entity.
So overall, it seems the Colorado legislature is watching and encouraging the use of the public benefit corporation by making it easier for folks to use it. Will it have the effect they intend? We’ll see. Perhaps another post will dive into an analysis here.