Minnesota Legislature
HF 697
as introduced - 87th Legislature (2011 - 2012) Posted on 02/24/2011 10:42am
Current Version - as introduced
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A bill for an act
relating to corporations; providing for incorporation of for-profit community
enhancement corporations; proposing coding for new law as Minnesota Statutes,
chapter 304A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[304A.01] CITATION.
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This chapter may be cited as the "Minnesota Community Enhancement Corporation
Act."
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Sec. 2.
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[304A.02] DEFINITIONS.
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new text begin Subdivision 1. new text end
new text begin Applicability. new text end
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For purposes of this chapter, the terms defined in this
section have the meanings given.
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new text begin Subd. 2. new text end
new text begin Community enhancement. new text end
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"Community enhancement" means
providing directly or indirectly through for-profit business undertakings public goods and
improvements and advantages for the general public well-being of local, state, national, or
world communities.
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new text begin Subd. 3. new text end
new text begin Stakeholder. new text end
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"Stakeholder" means:
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(1) a shareholder;
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(2) an employee;
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(3) a customer;
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(4) a community of interest; or
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(5) a creditor.
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new text begin Subd. 4. new text end
new text begin Best interests of the corporation. new text end
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The best interests of the corporation
means those goals and objectives which are reasonably thought to provide for long-term
community enhancement or to advance one or more interests of stakeholders.
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Sec. 3.
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[304A.03] RELATIONSHIP TO OTHER LAW.
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Chapter 302A, including its definitions, applies to corporations incorporated or
governed under this chapter, except as otherwise provided in this chapter, or where chapter
302A conflicts with this chapter.
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Sec. 4.
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[304A.04] INCORPORATION.
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(a) A for-profit corporation may be incorporated under this chapter to pursue one or
more modes of community enhancement as stated in its articles of incorporation.
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(b) The secretary of state shall maintain the corporation's incorporation records in
a manner that clearly distinguishes community enhancement corporations incorporated
under this chapter.
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(c) A corporation incorporated under this chapter shall include as part of its corporate
name the phrase "community enhancement corporation" or the abbreviation "CEC."
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Sec. 5.
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[304A.05] STANDARD OF CONDUCT; DIRECTORS.
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new text begin Subdivision 1. new text end
new text begin Standard; liability. new text end
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(a) A director of a community enhancement
corporation shall seek the best interests of the corporation:
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(1) in good faith;
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(2) in a manner the director reasonably believes to be in the best interests of the
corporation; and
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(3) with the care an ordinarily prudent person in a like position would exercise
under similar circumstances.
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(b) A person who satisfies the requirements of paragraph (a) is not liable by reason
of being or having been a director of the corporation.
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(c) Nothing in this chapter creates liability to, or a cause of action in favor of, a
person other than the corporation or a shareholder.
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new text begin Subd. 2. new text end
new text begin Reliance. new text end
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(a) A director is entitled to rely on information, opinions,
reports, or statements, including financial statements and other financial data, in each case
prepared or presented by:
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(1) one or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters presented;
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(2) counsel, public accountants, or other persons as to matters that the director
reasonably believes are within the person's professional or expert competence; or
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(3) a committee of the board upon which the director does not serve, duly established
in accordance with section 302A.241, as to matters within its designated authority, if the
director reasonably believes the committee to merit confidence.
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(b) Paragraph (a) does not apply to a director who has knowledge concerning
the matter in question that makes the reliance otherwise permitted by paragraph (a)
unwarranted.
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new text begin Subd. 3. new text end
new text begin Presumption of assent; dissent. new text end
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A director who is present at a meeting of
the board when an action is approved by the affirmative vote of a majority of the directors
present is presumed to have assented to the action approved, unless the director:
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(1) objects at the beginning of the meeting to the transaction of business because
the meeting is not lawfully called or convened and does not participate thereafter in the
meeting, in which case the director shall not be considered to be present at the meeting
for any purpose of this chapter;
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(2) votes against the action at the meeting; or
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(3) is prohibited by section 302A.255 from voting on the action.
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new text begin Subd. 4. new text end
new text begin Elimination or limitation of liability. new text end
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A director's personal liability to the
corporation or its shareholders for monetary damages for breach of fiduciary duty as a
director may be eliminated or limited in the articles. The articles shall not eliminate or
limit the liability of a director:
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(1) for any breach of the director's duty of loyalty to the corporation or its
shareholders;
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(2) for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law;
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(3) under section 80A.76 or 302A.559;
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(4) for any transaction from which the director derived an improper personal benefit;
or
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(5) for any act or omission occurring prior to the date when the provision in the
articles eliminating or limiting liability becomes effective.
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Sec. 6.
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[304A.06] STANDARD OF CONDUCT; OFFICERS.
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(a) An officer of a community enhancement corporation shall discharge the fiduciary
duties of the office loyally, in good faith, in a manner that the officer believes to be in the
best interests of the corporation, and with the care an ordinarily prudent person in a like
position would exercise under similar circumstances.
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(b) Nothing in this chapter creates liability to, or a cause of action in favor of, a
person or entity other than the corporation or a shareholder.
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(c) This section, and not section 302A.361, applies under this chapter.
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Sec. 7.
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[304A.07] STAKEHOLDER ENGAGEMENT.
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new text begin Subdivision 1. new text end
new text begin Stakeholder impact. new text end
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The board of a community enhancement
corporation shall provide reasonable constructive opportunities for stakeholder
engagement with the corporation, its officers, and its board.
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new text begin Subd. 2. new text end
new text begin Public interest reports. new text end
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A community enhancement corporation shall
make an annual report to the public on its financial condition and describing its efforts
with respect to achieving community enhancement and constructively engaging with
material stakeholder interests.
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Sec. 8. new text begin EFFECTIVE DATE.
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Sections 1 to 7 are effective the day following final enactment.
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