Minnesota Public Benefit Corporation Act Passes
ST. PAUL, MINN. – The Senate passed legislation today creating a new type of corporation in Minnesota. HF 2582 allows for the incorporation of public benefit corporations, for-profit enterprises that have the opportunity to spend money on social causes. Currently, 20 other states and the District of Columbia have adopted similar laws. The bill passed with broad, bipartisan support by a vote of 48-16.
State Senator Jim Carlson (DFL-Eagan), co-author of the legislation, praised the bill for giving Minnesota’s entrepreneurs a new tool to create positive change in their communities while also earning financial profits for philanthropic investors. Senator Carlson noted that one of the best known public benefit corporations in the country is Ben & Jerry’s ice cream.
“Many entrepreneurs in the state are looking for ways to take their skills and start businesses that can address social problems. Before today, their only option was to use the traditional non-profit or for-profit model. By combining these models, our entrepreneurs can create corporations that are able to make profits and gain investors but also work to address important issues. With this public benefit corporation, we can move beyond philanthropic and government financial support and tap into the private sector to sustain and scale social impact,” said Senator Carlson.
The bill defines the term, public benefit corporation, as applying to two types of organizations: general benefit organizations (GBC) and specific benefit corporations (SBC). A GBC is meant to be guided by a triple bottom line approach—people, planet, profit. An SBC would operate as a for-profit enterprise that exists for a specific social purpose. Owners would decide whether they want to file as an SBC or a GBC.
“This bill will allow our entrepreneurs and investors to start, support, and grow Minnesota-based “social businesses” that create jobs and wealth in Minnesota while addressing social needs. This is a great way for us to make positive change in Minnesota,” said Senator Carlson.
For information on this or any legislation, please contact Sen. Jim Carlson at 651-297-8073 or by email at Contact Sen. Jim Carlson.