Rhode Island General Laws 7-5.3-11. Right of action
(a) Except in a benefit enforcement proceeding, no person may bring an action or assert a claim against a benefit corporation or its directors or officers with respect to:
(1) Failure to pursue or create general public benefit or a specific public benefit set forth in its articles of incorporation; or
(2) Violation of an obligation, duty, or standard of conduct under this chapter.
Terms Used In Rhode Island General Laws 7-5.3-11
- Benefit corporation: means a corporation for profit with purposes set forth in Rhode Island General Laws 7-5.3-2
- Benefit enforcement proceeding: means any claim or action or proceeding for:
(i) Failure of a benefit corporation to pursue or create general public benefit or a specific public benefit purpose set forth in its articles; or
(ii) Violation of any obligation, duty, or standard of conduct under this chapter. See Rhode Island General Laws 7-5.3-2
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- General public benefit: means a material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation. See Rhode Island General Laws 7-5.3-2
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
- Specific public benefit: includes :
(i) Providing low-income or underserved individuals or communities with beneficial products or services;
(ii) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;
(iii) Protecting or restoring the environment;
(iv) Improving human health;
(v) Promoting the arts, sciences, or advancement of knowledge;
(vi) Increasing the flow of capital to entities with a purpose to benefit society or the environment; and
(vii) Conferring any other particular benefit on society or the environment. See Rhode Island General Laws 7-5.3-2
- Subsidiary: means , in relation to a person, an entity in which the person owns beneficially, or of record, fifty percent (50%) or more of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the entity had been exercised. See Rhode Island General Laws 7-5.3-2
(b) A benefit corporation shall not be liable for monetary damages under this chapter for any failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.
(c) A benefit enforcement proceeding may be commenced or maintained only:
(1) Directly by the benefit corporation; or
(2) Derivatively in accordance with the procedures in § 7-1.2-711 by:
(i) A person or group of persons that owned beneficially, or of record, at least two percent (2%) of the total number of shares of a class or series outstanding at the time of the act or omission complained of;
(ii) A director;
(iii) A person or group of persons that owned beneficially, or of record, five percent (5%) or more of the outstanding equity interests in an entity of which the benefit corporation is a subsidiary at the time of the act or omission complained of; or
(iv) Other persons as specified in the articles of incorporation or bylaws of the benefit corporation.
(d) For purposes of this section, a person is the beneficial owner of shares or equity interests if the shares or equity interests are held in a voting trust or by a nominee on behalf of the beneficial owner.
History of Section.
P.L. 2013, ch. 487, § 1; P.L. 2013, ch. 500, § 1.