Historically and legally, for-profit corporations have been restricted in pursuing social goals because, generally, corporate leadership was fiduciarily obligated to pursue wealth for its owners and shareholders.
With Governor DeWine’s signing of Senate Bill 21 on December 21, 2020, Ohio Corporation Law now permits the formation of a “Benefit Corporation” which can pursue both profit and beneficial social goals.
A “Benefit Corporation” can be formed and pursue both socially beneficial purposes and wealth for its owners and shareholders. These purposes can include those traditionally pursued by non-profit entities, such as in the areas of the arts, education, social services and health. Of course, the special tax benefits which often pertain to non-profit corporations will not accrue to the benefit of an Ohio Benefit Corporation and any contributors thereto.
The ability to be a benefit corporation is available both by creating a new benefit corporation or converting from a standard Ohio for-profit corporation to a benefit corporation.
If you have any questions about benefit corporations, please contact Dana Rose or your Weston Hurd attorney.