Why Delaware's new public benefit corporation law matters - Technical.ly Delaware

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Jul. 20, 2015 7:32 am

Why Delaware’s new public benefit corporation law matters

The amendments, which ultimately encourage social enterprise, were recently approved by Gov. Jack Markell. Silicon Valley lawyer and entrepreneur John Montgomery explains why that's good news.

Gov. Jack Markell.

(Photo by Flickr user Jeffrey, used under a Creative Commons license)

Effective August 1, amendments to Delaware’s public benefit corporation law will make it easier for corporations to become socially conscious.

As Silicon Valley lawyer and entrepreneur John Montgomery writes on LinkedIn Pulse, current Delaware corporate law “makes it difficult for its corporations to legally pursue a heroic purpose, become sustainable or become leaders in corporate social responsibility.” (We delved into some of these issues, relating specifically to B Corps, on our sister site, Technical.ly Philly.)

The amendments, approved by Gov. Jack Markell last week, carry significant weight for the seemingly endless stream of businesses incorporating in Delaware. Whereas Montgomery writes that it was nearly “illegal to do the right thing” before, the new amendments will not only make corporate social endeavors legal, but encouraged.

Read into on the effects the amendment will have on corporations here.

“It turns out that doing business this way is more profitable,” Montgomery writes. “The preliminary economic data indicates that corporations built with principles of sustainability, such as those embodied by the benefit corporation, out perform their conventional peers and provide a better rate of return to investors.”

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