Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back

Know the Law: New Hampshire Benefit Corporations Aim to Support the Public Good

Written by: Lauren C. Kilmister

Published in the Union Leader (1/19/2020)

Q: What is a benefit corporation, and how is it different than a traditional corporation in New Hampshire?

A: A benefit corporation is a type of entity that was introduced to the Granite State in 2015 with the New Hampshire Benefit Corporation Act (RSA Chapter 293-C). Currently, there are 17 active New Hampshire benefit corporations.

While traditional business corporations exist to benefit shareholders and maximize profits, benefit corporations permit the corporation to also support an identified public good. The directors of benefit corporations have a different standard of conduct than directors of business corporations, which creates what is referred to as a “double bottom line.”

Directors of benefit corporations are required by statute to take into account not only the interests of the corporation and its shareholders, but the interests of its employees, suppliers, customers, community and environment. The Benefit Corporation Act allows directors to take a broad approach and consider any other factors they deem appropriate, as long as the operations of the corporation contribute to the general public benefit.

While this “double bottom line” may sound like a burden, these additional considerations allow directors of benefit corporations to pursue objectives other than shareholder profits, while still faithfully executing their duties. Instead of being obligated to maximize profits, directors of benefit corporations know that their shareholders also prioritize a public benefit, even if that means lower dividends or slower growth in value.

To form a benefit corporation, the founders must make certain filings with the New Hampshire Secretary of State. In addition to the business purpose that all corporations are required to include in their Articles of Incorporation, a benefit corporation must state a purpose that creates a general public benefit. The purpose can be vague, such as “to create a general public benefit,” or more specific, such as “to create healing products, to run a healthy business, and to make a difference in the world through the manufacture and sale of holistic body care.”

Each year, a benefit corporation must submit an annual benefit report to the secretary of state that reports on how the corporation has followed its stated public benefit purpose. Like other annual reports of New Hampshire corporations, this document can be accessed by the public through the New Hampshire Secretary of State’s website.

Lauren can be reached at [email protected].

Know the Law is a bi-weekly column sponsored by McLane Middleton, Professional Association. We invite your questions of business law. Questions and ideas for future columns should be emailed to [email protected]. Please note – Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation.

Integrity and trust

At McLane Middleton we establish and maintain long-standing relationships with our clients to help us better achieve their unique goals over time. This approach to building trust requires that our esteemed lawyers and professionals use their broad, in-depth knowledge and work together with integrity to ascertain sound resolutions to legal matters for their clients.

Strength in numbers

McLane Middleton is made up of more than 105 attorneys who represent a broad range of clients throughout the region, delivering customized solutions. As a firm we are recognized as having the highest legal ability rating. The firm is rated Preeminent by Martindale Hubbell and is recognized as one of the nation's leading law firms in Chambers USA. Our attorneys are distinguished leaders in their respective practice areas.

Meet Our People

Commitment and collaboration

McLane Middleton's versatile group of attorneys and paralegals become trusted authorities on each case through collaboration. We work with our clients to learn their individual needs first and foremost and, together, we develop comprehensive solutions to their specific legal matters. This approach helps us exceed our clients' expectations efficiently and effectively, client by client, case by case.

Practice Areas

A history of excellence

McLane Middleton was established in 1919 in New Hampshire, and has five offices across two states. However, deep historical roots don't allow you to become innate. Our firm is organized, technological, and knowledgeable. Our history means we are recognized. But our reputation is built on the highest quality of service and experience in very specific areas of law.

The Firm

Intelligence paired with action

Our team continuously seeks opportunities to enhance their professional development and put key learnings to action. The pursuit of further insight guides us to volunteer service opportunities, speaking engagements, and teaching roles. Our lawyers are sought after thought leaders across their industries, and recipients of leadership awards throughout the region.