35-1-1402. Definitions. As used in this part, the following definitions apply:

(1) "Benefit corporation" means a corporation organized in this state that has elected to become subject to this part and whose status as a benefit corporation has not been terminated as provided in 35-1-1408.

(2) "Benefit enforcement proceeding" means a claim or action relating to:

(a) failure to pursue the general public benefit purpose of the benefit corporation or any specific public benefit purpose set forth in its articles of incorporation;

(b) violation of a duty or standard of conduct imposed on a director or officer pursuant to this part; or

(c) failure of the benefit corporation to deliver, provide, or post an annual benefit report as required in 35-1-1410.

(3) "Director" means an individual elected to or otherwise serving on the board of directors of a benefit corporation.

(4) "General public benefit" means a material, positive impact on society and the environment, taken as a whole, as assessed against a third-party standard, from the business and operations of a benefit corporation.

(5) "Independent" means having no material relationship with a benefit corporation or a subsidiary of a benefit corporation.

(6) "Minimum status vote" means:

(a) in the case of a corporation, that in addition to any other approval or vote required by law or by the articles of incorporation:

(i) the shareholders of every class or series are entitled to vote on the corporate action regardless of any limitation stated in the articles of incorporation; and

(ii) the corporate action must be approved by the outstanding shares of each class or series by at least two-thirds of the votes that all shareholders of the class or series are entitled to cast on that action or by a greater vote if required in the articles of incorporation; or

(b) in the case of a domestic business entity other than a corporation and in addition to any other approval, vote, or consent required by law that principally governs the internal affairs of the domestic business entity or any provision of the publicly filed record or document required to form the domestic business entity, if any, or of any agreement binding some or all of the holders of equity interests in the entity:

(i) the holders of every class or series of interest in the entity that are entitled to receive a distribution of any kind from the entity are entitled to vote on the action regardless of any otherwise applicable limitation on the voting rights of the interest; and

(ii) the action must be approved by the vote or consent of the holders described in subsection (6)(b)(i) by at least two-thirds of the votes of the holders or by a greater vote if required in the publicly filed record, document, or agreement binding holders of equity interests.

(7) "Specific public benefit" means:

(a) providing low-income or underserved individuals or communities with beneficial products or services;

(b) promoting economic opportunity for individuals or communities beyond the creation of jobs in the ordinary course of business;

(c) preserving the environment;

(d) improving human health;

(e) promoting the arts, sciences, or advancement of knowledge;

(f) increasing the flow of capital to entities with a public benefit purpose; or

(g) the accomplishment of any other particular benefit for society or the environment.

(8) "Subsidiary" means an entity in which a parent entity owns beneficially or of record 50% or more of the outstanding equity interests of the subsidiary. For the purposes of this definition, the percentage of ownership held by a parent entity in a subsidiary must be calculated as if all outstanding rights to acquire equity interests in the subsidiary have been exercised.

(9) "Third-party standard" means a standard for defining, reporting, and assessing overall corporate social and environmental performance to which all of the following apply:

(a) the standard is a comprehensive assessment of the impact of the business and the business's operations on the considerations listed in 35-1-1406(2)(a);

(b) the standard is developed by an entity that has no material financial relationship with the benefit corporation or any of its subsidiaries and:

(i) not more than one-third of the members of the governing body of the entity are representatives of:

(A) associations of businesses operating in a specific industry for which the performance is measured by the standard;

(B) businesses from a specific industry or an association of businesses in that industry; or

(C) businesses whose performance is assessed against the standard; and

(ii) the entity is not materially financed by an association or business described in subsection (9)(b)(i);

(c) the standard is developed by an entity that:

(i) accesses necessary and appropriate expertise to assess overall corporate social and environmental performance; and

(ii) uses a balanced multistakeholder approach, including a public comment period of at least 30 days, to develop the standard; and

(d) the following information regarding the standard is publicly available:

(i) the criteria considered when measuring the overall social and environmental performance of a business;

(ii) the relative weightings assigned to the criteria described in subsection (9)(d)(i);

(iii) the identity of the directors, the officers, any material owners, and the governing body of the entity that developed and controls revisions to the standard;

(iv) the process by which revisions to the standard and changes to the membership of the governing body of the entity described in subsection (9)(d)(iii) are made; and

(v) an accounting of the sources of financial support for the entity with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest.