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17-72a01. Law applicable to public benefit corporations; how formed. K.S.A. 17-72a01 through 17-72a09, and amendments thereto, apply to all public benefit corporations, as defined in K.S.A. 17-72a02, and amendments thereto. If a corporation elects to become a public benefit corporation under K.S.A. 17-72a01 through 17-72a09, and amendments thereto, in the manner prescribed in K.S.A. 17-72a01 through 17-72a09, and amendments thereto, it shall be subject in all respects to the provisions of the Kansas general corporation code, except to the extent K.S.A. 17-72a01 through 17-72a09, and amendments thereto, impose additional or different requirements, in which case such requirements shall apply.

History: L. 2017, ch. 71, § 1; July 1.

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17-72a02. Public benefit corporation defined; contents of certificate of incorporation. (a) A "public benefit corporation" is a for-profit corporation organized under and subject to the requirements of the Kansas general corporation code that is intended to produce a public benefit or public benefits and to operate in a responsible and sustainable manner. To that end, a public benefit corporation shall be managed in a manner that balances the stockholders' pecuniary interests, the best interests of those materially affected by the corporation's conduct and the public benefit or public benefits identified in its articles of incorporation. In the articles of incorporation, a public benefit corporation shall:

(1) Identify within its statement of business or purpose pursuant to K.S.A. 17-6002(a)(3), and amendments thereto, one or more specific public benefits to be promoted by the corporation; and

(2) state within its heading the name of the corporation and that it is a public benefit corporation pursuant to K.S.A. 17-7919(b), and amendments thereto.

(b) "Public benefit" means a positive effect, or reduction of negative effects, on one or more categories of persons, entities, communities or interests, other than stockholders in their capacities as stockholders, including, but not limited to, effects of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological nature. "Public benefit provisions" means the provisions of the articles of incorporation contemplated by this section.

(c) If the name of a public benefit corporation does not contain language stated in K.S.A. 17-7919(b)(1) through (4), and amendments thereto, the corporation shall, prior to issuing unissued shares of stock or disposing of treasury shares, provide notice to any person to whom such stock is issued or who acquires such treasury shares that it is a public benefit corporation; but such notice need not be provided if the issuance or disposal is pursuant to an offering registered under the securities act of 1933, 15 U.S.C. § 77r et seq., or if, at the time of issuance or disposal, the corporation has a class of securities that is registered under the securities exchange act of 1934, 15 U.S.C. § 78a et seq.

History: L. 2017, ch. 71, § 2; July 1.

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17-72a03.

History: L. 2017, ch. 71, § 3; Repealed, L. 2023, ch. 66, § 74; January 1, 2024.

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17-72a04. Stock certificates; notices regarding uncertificated stock. Any stock certificate issued by a public benefit corporation shall note conspicuously that the corporation is a public benefit corporation formed pursuant to K.S.A. 17-72a01 through 17-72a09, and amendments thereto. Any notice given by a public benefit corporation pursuant to K.S.A. 17-6401(f), and amendments thereto, shall state conspicuously that the corporation is a public benefit corporation formed pursuant to K.S.A. 17-72a01 through 17-72a09, and amendments thereto.

History: L. 2017, ch. 71, § 4; L. 2023, ch. 66, § 43; July 1.

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17-72a05. Duties of directors. (a) The board of directors shall manage or direct the business and affairs of the public benefit corporation in a manner that balances the pecuniary interests of the stockholders, the best interests of those materially affected by the corporation's conduct and the specific public benefit or public benefits identified in its articles of incorporation.

(b) A director of a public benefit corporation shall not, by virtue of the public benefit provisions or K.S.A. 17-72a02(a), and amendments thereto, have any duty to any person on account of any interest of such person in the public benefit or public benefits identified in the articles of incorporation or on account of any interest materially affected by the corporation's conduct and, with respect to a decision implicating the balancing requirement in subsection (a), will be deemed to satisfy such director's fiduciary duties to stockholders and the corporation if such director's decision is both informed and disinterested and not such that no person of ordinary, sound judgment would approve.

(c) A director's ownership of or other interest in the stock of the public benefit corporation shall not alone, for the purposes of this section, create a conflict of interest on the part of the director with respect to the director's decision implicating the balancing requirement in subsection (a), except to the extent that such ownership or interest would create a conflict of interest if the corporation were not a public benefit corporation. In the absence of a conflict of interest, no failure to satisfy that balancing requirement shall, for the purposes of K.S.A. 17-6002(b)(8) or 17-6305, and amendments thereto, constitute an act or omission not in good faith, or a breach of the duty of loyalty unless the articles of incorporation so provide.

History: L. 2017, ch. 71, § 5; L. 2023, ch. 66, § 44; July 1.

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17-72a06. Periodic statements and third-party certification. (a) A public benefit corporation shall include in every notice of a meeting of stockholders a statement to the effect that it is a public benefit corporation formed pursuant to K.S.A. 17-72a01 through 17-72a09, and amendments thereto.

(b) A public benefit corporation shall no less than annually provide its stockholders with a statement as to the corporation's promotion of the public benefit or public benefits identified in the articles of incorporation and of the best interests of those materially affected by the corporation's conduct. The statement shall include:

(1) The objectives the board of directors has established to promote such public benefit or public benefits and interests;

(2) the standards the board of directors has adopted to measure the corporation's progress in promoting such public benefit or public benefits and interests;

(3) objective factual information based on those standards regarding the corporation's success in meeting the objectives for promoting such public benefit or public benefits and interests; and

(4) an assessment of the corporation's success in meeting the objectives and promoting such public benefit or public benefits and interests.

(c) A public benefit corporation shall provide the statement described in subsection (b) to its stockholders at the time prescribed by K.S.A. 17-7503, and amendments thereto, for the filing of the public benefit corporation's annual report.

(d) The statement described in subsection (b) shall be based on a third-party standard. A "third-party standard" means a standard for defining, reporting and assessing promotion of the public benefit or public benefits and interests identified in the public benefit corporation's articles of incorporation that: (1) Is developed by a person or entity that is independent of the public benefit corporation; and (2) is transparent because the following information about the standard is publicly available: (A) The factors considered when measuring the performance of a business; (B) the relative weightings of those factors; and (C) the identity of the persons who developed the standard and who control changes to the standard and the process by which those changes are made. For purposes of this section, the term "independent" means having no material relationship with the public benefit corporation or any of its directors, officers, or affiliates, as determined by the board of the public benefit corporation or a committee thereof.

(e) A public benefit corporation shall post its most recent statement described in subsection (b) on the public portion of its website, if any, concurrently with the delivery of such statement to its stockholders under subsection (c). If a public benefit corporation does not have a website, it shall provide a copy of such statement, without charge, to any person that requests a copy. The compensation paid to directors and any other financial or proprietary information contained in the statement described in subsection (b) may be omitted from any statement that is publicly posted or provided to any person pursuant to this subsection, other than a statement provided to a stockholder, director or officer.

(f) The articles of incorporation or bylaws of a public benefit corporation may require that the corporation obtain a periodic third-party certification addressing the corporation's promotion of the public benefit or public benefits identified in the articles of incorporation or the best interests of those materially affected by the corporation's conduct, or both.

History: L. 2017, ch. 71, § 6; July 1.

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17-72a07. Actions to enforce balancing requirement. Any action to enforce the balancing requirement of K.S.A. 17-72a05(a), and amendments thereto, including any individual, derivative, or any other type of action, shall not be brought unless the plaintiffs in such action own individually or collectively, as of the date the action is instituted, at least 2% of the corporation's outstanding shares or, in the case of a corporation with shares listed on a national securities exchange, the lesser of such percentage or shares of the corporation with a market value of at least $2,000,000 as of the date the action is instituted. This section shall not relieve the plaintiffs from complying with any other conditions applicable to filing a derivative action including K.S.A. 60-223a(b)(1), and amendments thereto, and any rules of the court where the action is filed.

History: L. 2017, ch. 71, § 7; L. 2023, ch. 66, § 45; July 1.

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17-72a08. No effect on other corporations. K.S.A. 17-72a01 through 17-72a09, and amendments thereto, shall not affect a statute or rule of law that is or would be applicable to any corporation that is organized under the Kansas general corporation code but is not a public benefit corporation, except as provided in K.S.A. 17-72a03, and amendments thereto.

History: L. 2017, ch. 71, § 8; July 1.

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17-72a09. Application of the Kansas general corporation code to public benefit corporations. K.S.A. 17-72a01 through 17-72a09, and amendments thereto, shall be part of and supplemental to the Kansas general corporation code, articles 60 through 74 of chapter 17 of the Kansas Statutes Annotated, and amendments thereto.

History: L. 2017, ch. 71, § 9; July 1.