M.G.L. c. 156E, § 1 Short title
c. 156E, § 1. Short title
Section 1. This chapter shall be known and may be cited as the Massachusetts Benefit Corporation Act.
BENEFIT CORPORATIONS
M.G.L. pt. Part I, tit. Title XXII, ch. c. 156E
in effectM.G.L. c. 156E, § 2 Definitions
c. 156E, § 2. Definitions
Section 2. As used in this chapter, the following words shall, unless the context otherwise requires, have the following meanings:—
''Benefit corporation'', a corporation incorporated under chapter 156A or chapter 156D that has elected to be a benefit corporation under section 4 or 5 and has not ceased to be a benefit corporation by terminating its benefit corporation status underof section 6.
''Benefit director'', either: (i) the director designated as the benefit director of a benefit corporation under subsection (a) of section 11; or (ii) a person with any of the powers, duties or rights of a benefit director to the extent provided in the bylaws underto subsection (e) of section 11.
''Benefit enforcement proceeding'', a claim or action brought directly by a benefit corporation, or derivatively as authorized by this chapter on behalf of a benefit corporation, against a director or officer for: (i) failure to pursue the general public benefit purpose of the benefit corporation or a specific public benefit purpose set forth in its articles; or (ii) a violation of any obligation, duty or standard of conduct under this chapter.
''Benefit officer'', the individual designated as the benefit officer of a benefit corporation under section 13.
''General public benefit'', a material, positive impact on society and the environment, taken as a whole, as measured by a third-party standard, from the business and operations of a benefit corporation.
''Independent'', having no material relationship with a benefit corporation or a subsidiary of the benefit corporation; provided, however, that serving as a benefit director or benefit officer shall not preclude a person from being independent; provided further, that a material relationship between a person and a benefit corporation or any of its subsidiaries shall be presumed to exist if 1 or more of the following apply: (1) the person is, or has been within the last year, an employee other than a benefit officer of the benefit corporation or a subsidiary of the benefit corporation;;(2) an immediate family member of the person is, or has been within the last year, an executive officer other than a benefit officer of the benefit corporation or its subsidiary; (3) there is beneficial or record ownership of 5 per cent or more of the outstanding shares of the benefit corporation by: (i) the person; or (ii) an association of which the person is a director, an officer or a manager or in which the person owns beneficially or of record 5 per cent or more of the outstanding equity interests.
''Minimum status vote'', (1) in the case of a business corporation, in addition to any other required approval or vote, the satisfaction of the following conditions: (i) the holders of every class or series shall be entitled to vote on the corporate action regardless of a limitation stated in the articles of organization or bylaws on the voting rights of any class or series; and (ii) the corporate action shall be approved by the affirmative vote of the shareholders of each class or series entitled to cast at least two-thirds of the votes that all shareholders of the class or series are entitled to cast on the action; (2) in the case of a domestic entity other than a business corporation, in addition to any other required approval, vote or consent, the satisfaction of the following conditions:
(i) the holders of every class or series of equity interest in the entity that are entitled to receive a distribution of any kind from the entity shall be entitled to vote on or consent to the action regardless of any otherwise applicable limitation on the voting or consent rights of any class or series; and
(ii) the action shall be approved by the affirmative vote or consent of the holders described in clause (1) entitled to cast at least two-thirds of the votes or consents that all of those holders are entitled to cast on the action.
''Specific public benefit'', any of the following: (1) providing low-income or underserved individuals or communities with beneficial products or services; (2) promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business; (3) promoting the preservation and conservation of the environment; (4) improving human health; (5) promoting the arts, sciences, access to and advancement of knowledge; (6) increasing or facilitating the flow of capital and assets to entities with a general public benefit purpose; or (7) conferring any other particular benefit on society or the environment.
''Third-party standard'', a standard for defining, reporting and assessing overall corporate social and environmental performance which is: (1) comprehensive in that it assesses the effect of the business and its operations upon the interests listed in subclauses (ii), (iii), (iv) and (v) of clause (1) of subsection (a) of section 10; (2) developed or performed by a person or organization independent of the benefit corporation and not more than one-third of the members of the governing body of the organization are representatives of any of the following: (i) an association of businesses operating in a specific industry the performance of whose members is measured by the standard; (ii) a business from a specific industry or an association of businesses in that industry; or (iii) a business whose performance is assessed against the standard; (3) not materially financed by an association of business described in clause (2); (4) credible because the standard is developed by a person that: (i) has access to necessary expertise to assess overall corporate social and environmental performance; and (ii) uses a balanced multi-stakeholder approach, including a public comment period of at least 30 days to develop the standard; (5) transparent, because the following information is publicly available about the standard: (i) the criteria considered when measuring the overall social and environmental performance of a business; (ii) the relative weighting of those criteria; (iii) the identity of the directors, officers, material owners and governing body of the organization that developed and control revisions to the standard; and (iv) an accounting of the sources of financial support for the organization, with sufficient detail to disclose any relationship that could reasonably be considered to present a potential conflict of interest.
M.G.L. c. 156E, § 3 Compliance with chapters 156A and 156D; authority of this chapter over articles of organization, bylaws or shareholder agreement of benefit corporation
c. 156E, § 3. Compliance with chapters 156A and 156D; authority of this chapter over articles of organization, bylaws or shareholder agreement of benefit corporation
Section 3. (a) Except as otherwise provided in this chapter, a benefit corporation doing business in the commonwealth shall comply with all applicable laws regarding corporations, including chapters 156A and 156D. Chapter 156D shall apply to benefit corporations and they shall enjoy the powers and privileges and be subject to the duties, restrictions and liabilities of corporations organized under said chapter 156D except where inconsistent with this chapter. The existence of this chapter shall not excuse or exempt any business organized under the laws of the commonwealth from complying with all relevant laws and regulations in the commonwealth, except to the extent they are inconsistent with this chapter.
(b) The articles of organization, bylaws or shareholder agreement of a benefit corporation may not relax, be inconsistent with or supersede this chapter. A benefit corporation's articles of organization, bylaws or shareholder agreement that is inconsistent with this chapter shall be void and unenforceable under this subsection and shall not render the entirety or remaining provisions of the articles of organization, bylaws or shareholder agreement void or unenforceable.
M.G.L. c. 156E, § 4 Organization of benefit corporation
c. 156E, § 4. Organization of benefit corporation
Section 4. A benefit corporation shall be organized under either chapter 156A or chapter 156D, as applicable, except that a benefit corporation's articles of organization shall make clear reference that it is a benefit corporation.
M.G.L. c. 156E, § 5 Election by existing corporation to convert to benefit corporation
c. 156E, § 5. Election by existing corporation to convert to benefit corporation
Section 5. An existing corporation organized under chapter 156A or chapter 156D may elect to become a benefit corporation by amending its articles of organization to include a statement that the corporation is a benefit corporation. In order to be effective, the amendment shall be adopted by at least the minimum status vote. Such amendment shall be treated as an amendment of the articles under clause (4) of subsection (a) of section 13.02 of said chapter 156D and the shareholders of the corporation shall be entitled to appraisal rights under sections 13.01 to 13.31, inclusive, of said chapter 156D.
M.G.L. c. 156E, § 6 Termination of status as benefit corporation
c. 156E, § 6. Termination of status as benefit corporation
Section 6. A benefit corporation may terminate its status as a benefit corporation and cease to be subject to this chapter by amending its articles of organization to delete the statement required by sections 4 and 5 that the corporation is a benefit corporation. In order to be effective, the amendment shall be adopted by at least the minimum status vote.
M.G.L. c. 156E, § 7 Prohibition against advertising as benefit corporation without full compliance with this chapter
c. 156E, § 7. Prohibition against advertising as benefit corporation without full compliance with this chapter
Section 7. A business corporation organized under the laws of the commonwealth shall not hold itself out as, advertise itself as, or indicate in any way that it is a benefit corporation unless it was organized under and in full compliance with this chapter.
M.G.L. c. 156E, § 8 Creation for benefit corporation resulting from merger, share exchange or conversion
c. 156E, § 8. Creation for benefit corporation resulting from merger, share exchange or conversion
Section 8. (a) An entity that is not a benefit corporation shall become a benefit corporation and shall be subject to this chapter if:
(1) the entity that is not a benefit corporation is a party to a merger or conversion or the entity that is not a benefit corporation is the exchanging corporation in a share exchange; and
(2) the surviving corporation in the merger, share exchange or conversion is to be a benefit corporation.
(b) In order to be effective, a plan of merger or share exchange subject to this section, shall be adopted by the minimum status vote.
(c) If a corporation that is not a benefit corporation is a party to a merger, share exchange or conversion in which the surviving or resulting corporation is a benefit corporation, the transaction shall be treated as if it were a conversion to nonprofit status for purposes of section 13.02 of chapter 156D and the shareholders of the corporation shall be entitled to appraisal rights under sections 13.01 to 13.31, inclusive, of said chapter 156D.
M.G.L. c. 156E, § 9 General public benefit; specific public benefit
c. 156E, § 9. General public benefit; specific public benefit
Section 9. (a) In addition to its purposes under chapter 156D as a business corporation, a benefit corporation shall have the purpose of creating general public benefit.
(b) The articles of organization of a benefit corporation may identify 1 or more specific public benefits that it is the purpose of the benefit corporation to create in addition to its purpose as a business corporation and under subsection (a). The identification of a specific public benefit under this subsection shall not limit the obligation of a benefit corporation under subsection (a).
(c) The creation of a general public benefit and a specific public benefit under subsections (a) and (b) shall be in the best interest of the benefit corporation.
(d) A benefit corporation may amend its articles of organization to add, amend or delete the identification of a specific public benefit under chapter 156D; provided, however, that the elimination of an optional specific public benefit shall not significantly diminish or eliminate the general public benefit required in this subsection.
(e) A professional corporation that is a benefit corporation shall not be in violation of section 3 of chapter 156A by having the purpose to create a general public benefit or a specific public benefit.
M.G.L. c. 156E, § 10 Board of directors, committees and individual directors; consideration of best interests of corporation; non-liability for monetary damages
c. 156E, § 10. Board of directors, committees and individual directors; consideration of best interests of corporation; non-liability for monetary damages
Section 10. (a) In discharging the duties of their respective positions and in considering the best interests of the benefit corporation, the board of directors, committees of the board and individual directors of a benefit corporation:
(1) shall consider the effects of any action upon:
(i) the shareholders of the benefit corporation;
(ii) the employees and workforce of the benefit corporation, its subsidiaries and its suppliers;
(iii) the interest of customers or clients as beneficiaries of the general public benefit or specific public benefit purposes of the benefit corporation;
(iv) community and societal factors, including those of each community in which offices or facilities of the benefit corporation, its subsidiaries or its suppliers are located;
(v) the local, regional and global environment;
(vi) the short-term and long-term interests of the benefit corporation, including benefits that may accrue to the benefit corporation from its long-term plans and the possibility that these interests may be best served by the continued independence of the benefit corporation; and
(vii) the ability of the benefit corporation to accomplish its general public benefit purpose and any specific public benefit purpose; and
(2) may consider:
(i) the interests of the economy of the state, the region and the country under clause (3) of subsection (a) of section 8.30 of chapter 156D; or
(ii) other pertinent factors or the interests of any other group that they considerdeem appropriate.
(b) Directors shall consider the factors in clause (1) of subsection (a) using sound and reasonable judgment in determining corporate actions and the best interests of the benefit corporation. Directors shall not be required to give priority to the interests of a particular person or group referred to in clauses (1) or (2) of said subsection (a) over the interests of any other person or group unless the benefit corporation has stated in its articles its intention to give priority to certain interests related to its accomplishment of its general public benefit purpose or of a specific public benefit purpose identified in its articles.
(c) The consideration of interests and factors in the manner required by subsection (a) shall not constitute a violation of section 8.01 of chapter 156D.
(d) A director shall not be personally liable for monetary damages for:
(1) any action or inaction as a director if the director performed the duties of office in compliance with section 8.30 of chapter 156D and this section; or
(2) failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.
(e) A director shall not have a fiduciary duty to a person that is a beneficiary of the general or specific public benefit purposes of a benefit corporation arising from the status of the person as a beneficiary.
M.G.L. c. 156E, § 11 Benefit director; powers and duties; election and removal annual shareholder's report; non-liability
c. 156E, § 11. Benefit director; powers and duties; election and removal annual shareholder's report; non-liability
Section 11. (a) The board of directors of a benefit corporation shall include 1 director who shall:
(1) be designated the benefit director; and
(2) have, in addition to the powers, duties, rights and immunities of the other directors of the benefit corporation, the powers, duties, rights and immunities provided in this chapter.
(b) The benefit director shall be elected, and may be removed, in the manner provided under chapter 156D and shall be an individual who is independent. The benefit director may serve as the benefit officer at the same time as serving as the benefit director. The articles of organization, bylaws or shareholder agreement of a benefit corporation may prescribe additional qualifications of the benefit director consistent with this section.
(c) The benefit director shall prepare and the benefit corporation shall include in the annual shareholder's report the opinion of the benefit director on the following:
(1) whether the benefit corporation acted in accordance with its general public benefit and any specific public benefit purpose in all material respects during the period covered by the report;
(2) whether the directors and officers complied with subsection (a) of section 10 and subsection (a) of section 12;
(3) whether, in the opinion of the benefit director, the benefit corporation or its directors or officers failed to comply with subsection (b) and, if so, a description of the ways in which the benefit corporation or its directors or officers failed to comply; and
(4) what impact the corporation's status as a benefit corporation is having on its business, including client or consumer opinion, return on investment, impact on shareholders and impact on employees.
(d) The action or inaction of an individual in the capacity of a benefit director shall constitute, for all purposes, an action or inaction of that individual in the capacity of a director of the benefit corporation.
(e)(1) A shareholder agreement of a benefit corporation adopted under subsection (a) of section 7.32 of chapter 156D shall provide that the persons or shareholders who perform the duties of the board of directors shall include a person with the powers, duties, rights and immunities of a benefit director specified under subsection (d) of section 10.).
(2) A person that exercises 1 or more of the powers, duties or rights of a benefit director under this subsection shall:
(i) not be required to be independent of the benefit corporation;
(ii) have the immunities of a benefit director;
(iiiiv) not be subject to the procedures for election or removal of directors in chapter 156D unless the person is also a director of the benefit corporation or the shareholder agreement makes those procedures applicable; and.
(iv) may share the powers, duties and rights of a benefit director with 1 or more other persons.
(f) The benefit director of a professional corporation shall not be required to be independent.
(g) Regardless of whether the bylaws of a benefit corporation include a provision eliminating or limiting the personal liability of directors authorized by chapter 156D, a benefit director shall not be personally liable for an act or omission in the capacity of a benefit director unless the act or omission constitutes self-dealing, willful and intentional misconduct or a knowing violation of the law.
M.G.L. c. 156E, § 12 Officers; consideration of interests and factors of Sec. 10, subsec. (a); non-liability for monetary damages
c. 156E, § 12. Officers; consideration of interests and factors of Sec. 10, subsec. (a); non-liability for monetary damages
Section 12. (a) Each officer of a benefit corporation shall consider the interests and factors described in clause (1) of subsection (a) of section 10 in the manner provided in said subsection (a) if:
(1) the officer has discretion to act with respect to a matter; and
(2) it reasonably appears to the officer that the matter may have a material effect on the creation of a general public benefit or a specific public benefit by the benefit corporation.
(b) The consideration of interests and factors in the manner described in clause (1) of subsection (a) shall not constitute a violation of section 8.41 of chapter 156D.
(c) An officer shall not be personally liable for monetary damages for:
(1) any action or inaction as an officer if the officer performed the duties of the position in compliance with chapter 156D and this section; or
(2) failure of the benefit corporation to pursue or create a general public benefit or a specific public benefit.
(d) An officer shall not have a fiduciary duty to a person that is a beneficiary of the general or specific public benefit purposes of a benefit corporation arising from the status of the person as a beneficiary.
M.G.L. c. 156E, § 13 Benefit officer; powers and duties
c. 156E, § 13. Benefit officer; powers and duties
Section 13. (a) A benefit corporation may have an officer designated as the benefit officer. A benefit officer shall have:
(1) the powers and duties relating to the purpose of the corporation to create a general public benefit or a specific public benefit provided:
(i) by the bylaws; or
(ii) absent controlling provisions in the bylaws, by resolutions or orders of the board of directors; and
(2) the duty to oversee and prepare the annual benefit report required by subsection (a) of section 15.
[There is no subsection (b).]
M.G.L. c. 156E, § 14 Benefit enforcement proceeding
c. 156E, § 14. Benefit enforcement proceeding
Section 14. (a)(1) The duties under this chapter and the general public benefit purpose and any specific public benefit purpose of a benefit corporation may be enforced only in a benefit enforcement proceeding.
(2) Except in a benefit enforcement proceeding, no person shall bring an action or assert a claim against a benefit corporation or its directors or officers with respect to:
(i) failure to pursue or create general or specific public benefits set forth in its articles; or
(ii) a violation of a duty or standard of conduct under this chapter.
(3) A benefit corporation shall not be liable for monetary damages under this chapter for any failure of the benefit corporation to pursue or create a general public benefit or a specific public benefit.
(b) A benefit enforcement proceeding shall be commenced or maintained only:
(1) directly by the benefit corporation; or
(2) derivatively by:
(i) a shareholder;
(ii) a director;
(iii) a person or group of persons that owns beneficially or of record 5 per cent or more of the equity interests in an association of which the benefit corporation is a subsidiary; or
(iv) other persons as specified in the articles of organization, bylaws or shareholder agreement of the benefit corporation.
M.G.L. c. 156E, § 15 Annual benefit report
c. 156E, § 15. Annual benefit report
Section 15. (a) A benefit corporation shall prepare an annual benefit report, including all of the following information:
(1) a narrative description of:
(i) the ways in which the benefit corporation pursued a general public benefit during the year and the extent to which general public benefit was created;
(ii) the ways in which the benefit corporation pursued a specific public benefit that the articles of organization state it is the purpose of the benefit corporation to create and the extent to which that specific public benefit was created;
(iii) any circumstances that have hindered the creation by the benefit corporation of general public benefit or specific public benefit; and
(iv) the process and rationale for selecting or changing the third-party standard used to prepare the benefit report;
(2) an assessment of the overall social and environmental performance of the benefit corporation against a third-party standard:
(i) applied consistently with any application of that standard in prior benefit reports; or
(ii) accompanied by an explanation of the reasons for any inconsistent application;
(3) the name of the benefit director and the benefit officer, if any, and the address to which correspondence to each of them may be directed;
(4) the compensation paid by the benefit corporation during the year to each director in the capacity of a director;
(5) the name of each person that owns 5 per cent or more of the outstanding shares of the benefit corporation either: (i) of record; or (ii) beneficially, to the extent known to the benefit corporation without investigation;
(6) the statement of the benefit director described in subsection (c) of section 11;
(7) a statement of any connection between the organization that established the third-party standard, or its directors, officers or any holder of 5 per cent or more of the governance interests in the organization, and the benefit corporation or its directors, officers or any holder of 5 per cent or more of the outstanding shares of the benefit corporation, including any financial or governance relationship which might materially affect the credibility of the use of the third-party standard; and
(8) if the benefit corporation has dispensed with, or restricted the discretion or powers of, the board of directors, a description of:
(i) the persons that exercise the powers, duties and rights and who have the immunities of the board of directors; and
(ii) the benefit director, as required by subsection (d) of section 11.
(b) Nothing in this chapter shall require the benefit report or the assessment of the performance of the benefit corporation in the benefit report required by clause (2) of subsection (a) to be audited or certified by a third party standards provider.
M.G.L. c. 156E, § 16 Timing of annual benefit report sent to shareholders; posting on website; copy to state secretary
c. 156E, § 16. Timing of annual benefit report sent to shareholders; posting on website; copy to state secretary
Section 16. (a) The annual benefit report shall be sent to each shareholder at the same time that the benefit corporation delivers any other annual report to its shareholders, or within 120 days following the end of the fiscal year of the benefit corporation.
(b) A benefit corporation shall post its most recent annual benefit report on the public portion of its website, if any, but the compensation paid to directors and financial, confidential or proprietary information included in the benefit report may be omitted from the benefit report as posted.
(c) If a benefit corporation does not have a website, the benefit corporation shall provide a copy of its most recent benefit report, without charge, to any person that requests a copy, but the compensation paid to directors and financial or proprietary information included in the benefit report may be omitted from the copy of the benefit report provided.
(d) The benefit corporation shall deliver a copy of the benefit report to the state secretary with its annual report required by section 16.22 of chapter 156D, but the compensation paid to directors and financial, confidential or proprietary information included in the benefit report may be omitted from the benefit report as filed. The state secretary shall charge a fee of $75 for filing a benefit report in addition to the fee required for the annual report.
Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter156EFetched: 10/20/2026