Law in the Brief: To B or Not to B, Hawaii gets B-Corps through Act 209

What is a Sustainable Business Corporation or B-Corp?

You can now find Hawaii’s Sustainable Business Corporations at Chapter 420D of the Hawaii Revised Statutes. (UPDATED 10.08.12)

Act 209 Establishes an organizational and regulatory framework for sustainable business corporations.  “Sustainable business corporations” or “benefit” corporations (b-corps) are a specialized corporation committed to sustainable practices.  Their intended purpose is to develop and commit to sustainable practices and produce a public benefit.

Consider it a marriage between for-profit corporations with the public good that a non-profit is supposed to provide.

Some Specifics

Filing and Maintenance

Basically, you or your attorney would file the normal Articles of Incorporation with the Department of Commerce and Consumer Affairs (DCCA).  However, to put in the sustainable part an attachment would have to be filed that has a statement declaring that this a sustainable business corporation.

In general, when maintaining a B-Corporation you are following everything set forth by Chapter 414 (the Hawaii Business Corporation Act) of the Hawaii Revised Statutes.  The additional paperwork necessary will come from whatever chapter number the Legislative Reference Bureau decides to assign this Act.

Benefit Director and Benefit Officer

In addition, a sustainable business corporation is required to have a benefit director.  It also may choose to have a benefit officer. The role of these positions is to maintain that the company is following its goals for benefit and keeps record of it.  The benefit officer prepares the annual benefit report using a standard developed by a third party.  This third party acts sort of like an accounting firm for a corporation that publishes its financials.  The third party determines whether or not the goals are being met.

DCCA’s Role

The government’s role with a benefits corporation is minimal and only ministerial. DCCA will accept the filing and you only need interact with it and other governmental agencies, as you would normally do with a regular corporation.  The prime example is this:  a corporate annual report needs to be filed with the DCCA, but the benefit report that needs to be produced is for the shareholders.  The benefit report does not get filed with DCCA.   In fact, the hope of this Act is that the corporations make a commitment to sustainable business practices and produce communal benefit and that the shareholders who agree to invest in them police themselves.  Government role is kept to a minimal.

Last Word

If you are interested in specifics about creating a B-corporation you can contact me or if you want to know what kind of resources or generalized information check out Certified B Corps.  It is a good site to get a grasp about what a B Corps is and what is going on a national level.  If you liked this post or any of my other series please “Subscribe” to this blawg to receive e-mail updates.  In addition, follow me on Twitter and “Like” me on Facebook.  If you need to contact me directly, please e-mail me at

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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