TITLE 7
Corporations, Associations, and Partnerships

CHAPTER 7-5.3
Benefit Corporations

SECTION 7-5.3-9


§ 7-5.3-9 Standard of conduct for officers.

(a) Each officer of a benefit corporation shall consider the interests and factors described in subsection 7-5.3-7(a) in the manner provided in that subsection if:

(1) The officer has discretion to act with respect to a matter; and

(2) It reasonably appears to the officer that the matter may have a material effect on the creation by the benefit corporation of general public benefit or a specific public benefit identified in the articles of incorporation of the benefit corporation.

(b) The consideration by an officer of interests and factors in the manner described in subsection (a) shall not constitute a violation of the duties of the officer.

(c) Except as provided in the articles of incorporation, an officer is not personally liable for monetary damages for:

(1) An action or inaction as an officer in the course of performing the duties of an officer under subsection (a) if the officer performed the duties of the position in compliance with subsection 7-1.2-812(b) and this section; or

(2) Failure of the benefit corporation to pursue or create a general public benefit or a specific public benefit.

(d) An officer does not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.

(e) An officer who makes a business judgment in good faith fulfills the duty under this section if the officer:

(1) Is not interested in the subject of the business judgment;

(2) Is informed with respect to the subject of the business judgment to the extent the officer reasonably believes to be appropriate under the circumstances; and

(3) Rationally believes that the business judgment is in the best interests of the benefit corporation.

History of Section.
(P.L. 2013, ch. 487, § 1; P.L. 2013, ch. 500, § 1.)