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The State ofSocial Enterpriseand the Law2020--2021Supported by:The Tepper Family
The Grunin CenterThe Grunin Center for Law and Social Entrepreneurship was founded tocreate new ways for law to support positive change in the world. Our missionis to enhance the community of lawyers and legal institutions engaged insocial entrepreneurship and impact investing and to accelerate their effectiveparticipation in these fields. To this end, the Grunin Center publishesThe State of Social Enterprise and the Law annually.iv The Grunin Center for Law and Social Entrepreneurship
ContentsAbout the Authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Mapping State Legislation. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5Trends and Analyses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24Recognition of the Tepper Family. . . . . . . . . . . . . . . .25The State of Social Enterprise and the Law, 2020–2021 1
About the Authors(As of the 2020–2021 academic year)Sydney ForrestNadia GreggsHannah YangSydney is a first-year student atNadia Greggs is a second-yearHannah Yang is a third-yearNYU School of Law. She is fromJD candidate at NYU School ofstudent at NYU School of Law.Tampa, Florida. Before law school,Law. She graduated with a BA inShe is interested in technology,Sydney attended Wesleyan Univer-economics from Georgetownsustainability, and social entrepre-sity for her undergraduate degreeUniversity and an MA from Hunterneurship. Yang is an articles editorin mathematics and Olin GraduateCollege in applied mathematicsfor the Environmental Law Journal,School of Business at Babson Col-and statistics. Prior to law school,and she was previously on thelege for her MS in finance. At NYU,Nadia worked at the Board ofboards of the Supreme Courtbesides being a Tepper FellowGovernors of the Federal ReserveForum, Environmental Law Society,for the Grunin Center for Law andSystem in Washington, DC whereand Rights Over Tech. In her firstSocial Entrepreneurship, Sydney isshe assisted with research onsummer, she interned at the ACLUa Jacobson Leadership Scholar forcompetition and financial stabil-of Michigan. In her second summer,Law and Business and the Sociality in the banking industry. Sheshe interned at Morrison & Foer-Innovation Symposium chair forthen moved on to develop stu-ster in New York. As a student inthe Social Enterprise & Startupdent-growth metrics for New Yorkthe UN Diplomacy Clinic, HannahLaw Club. Outside of law school,State as a senior research analystserved as a legal adviser to Solo-she enjoys rock climbing, spendingfor an education research organiza-mon Islands. Prior to law school,time with her younger sister, andtion. In addition, she was an expertshe worked as a paralegal at Simp-taking non-degree math coursesconsultant for the Wisconsin Inno-son Thacher. Yang graduated fromat NYU Courant.cence Project. She is a memberPrinceton University with a degreeof the Black Allied Law Studentsin chemistry. Upon graduation,Associate at NYU and will beshe will be returning to Morrisonjoining Davis Polk & Wardwell& Foerster in their corporateafter graduation.practice group.2 The Grunin Center for Law and Social Entrepreneurship
IntroductionLoosely defined, social entrepreneurship is the choice to pursue both social benefitsand financial gain in a single business entity. However, the precise definition of thisterm lacks consensus and continues to be shaped by changes in both the public andprivate spheres. Throughout the different forms of social enterprise legislation, companies formed under these special legal forms are given flexibility to decide whichsocial benefit they are going to pursue. This broad definition of social enterprise andthe flexibility it gives companies to tackle social issues allows them to choose a purpose that most aligns with the visions of the business leaders. This has the potentialof allowing businesses to address the pressing issues that society is facing today.The past few years have seen the reverberations of racialIn prior years, it was common to see corporations’ socialunrest and sexism, each exacerbated by the devasta-purposes focused on environmental goals, such as carbontion of a global pandemic. There are ways that COVIDneutrality, and improving employee benefits.5 Recently,has made it particularly difficult for racial minorities andhowever, corporations are seeking new solutions to alsowomen to succeed in a profit-focused corporate struc-improve racial and gender equity in the workplace due toture. Researchers have found, for instance, that womenthe spotlight the pandemic has shone on this problem.6left the workplace at four times the rate of men duringthe pandemic,2 and that employees of color, LGBTQ ,Benefit corporations have a unique opportunity to supportand working parents are experiencing more challengesthese communities and respond to inequity via balancingduring the pandemic.3social purposes with the economic interest of shareholdersand ensure the future success of the corporation. WhileWith the increased public attention on these issues, somethis imperative exists, some employees remain doubtfulhave also been turning to businesses, scrutinizing thethat employers will commit more resources to equity inrole of corporations in these widespread social issues.the workplace during COVID and generally. Researchers4from McKinsey & Company have found that diversity andinclusion initiatives may suffer, in part, from a misalign1. For further discussion of the varying definitions of social enterprise, please refer tothe See Grunin Ctr. for L. & Soc. Entrepreneurship, Mapping the State of SocialEnterprise and the Law 8 (2018) [hereinafter 2017–2018 Tepper Report].2. Avie Schneider et al., Multiple Demands Causing Women to Abandon Workforce,Nat’l Pub. Radio (Oct. 2, 2020), mands-causing-women-toabandon-workforce3. Kweilin Ellingrud et al., Diverse Employees are Struggling the Most DuringCOVID-19—Here’s How Companies Can Respond, McKinsey (Nov. 17, can-respond#4. See generally Dealbook, Corporate America’s Role in the Fight for Racial Justice,N.Y. Times (Oct. 1, 2020), ok/corporate-america-racial-justice.html; Lily Zheng, We’re Entering the Age of CorporateSocial Justice, Harv. Bus. Rev. (June 15, 2020), rporate-social-justice; Tonya Garcia, Companies are Speaking Out AgainstRacial Injustice After the Killing of George Floyd, but They Have to Back It Up withAction, MarketWatch (June 9, 2020), -action-2020-06-05ment of financial incentives and a lack of accountabilityin senior management.75. See Jonathan Neilan, Peter Reilly, and Glenn Fitzpatrick, Time to Rethink the S inESG, Harv. L. Sch. F. Corp. Governance (June 28, 2020), -rethink-the-s-in-esg/ (discussing the prior absence ofdiscussions on the “S” relative to the “E” and “G” in ESG, and more recent uptickin focus on social issues since COVID-19).6. For example of recent articles looking at this phenomenon, See Lauren Feiner, TechCompanies Made Big Pledges to Fight Racism Last Year—Here’s How They’re DoingSo Far, CNBC (June 6, 2020), anti-racism-commitments-progress-check.html; All Things Considered, Big CompaniesAre Finding Out They Need Help With Diversity Messaging, Nat’l Pub. Radio (June 18,2021), -messaging; Gillian Friedman, Here’s What CompaniesAre Promising to Do to Fight Racism, N.Y. Times (Aug. 23, 2020), eorge-floyd-protests.html7. Ellingrud et al., supra note 3.The State of Social Enterprise and the Law, 2020–2021 3
This report, the fourth in the series, seeks to describerecent shifts in the perceived role of corporations in society and discusses the implications for specialized legalforms that have been created to house social entrepreneurial activities. Additionally, this report highlights recentdevelopments in the Delaware public benefit corporationstatute, four new state benefit corporation statutes, andthe new 2020 ABA Model Legislation. New legislation istrending toward increased flexibility in the benefit corporation requirements, making it less costly to become abenefit corporation while moving away from the 2017 BLab Model Legislation. For example, Delaware’s amendments make it easier both to become or to terminate abenefit corporation by reducing the voting threshold andthe universe of shareholders that can bring lawsuits. Alabama, Georgia, and Ohio have also enacted more flexiblelegislation in contrast to their prior, more restrictive, failedlegislative attempts that followed B Lab models. Morecompanies may choose to incorporate as benefit corporations because of this reduction in transaction costs andbe better equipped to respond to the increasing needsof their employees.4 The Grunin Center for Law and Social Entrepreneurship
Mapping State LegislationEvery year the Grunin Center for Law and Social Entrepreneurship at NYU Schoolof Law tracks legislative developments in the social enterprise field throughoutthe 50 states and the District of Columbia for our Social Enterprise Law Tracker.The Social Enterprise Law Tracker8Overview of Different FormsThis mapping of state legislation is based on findingsThere are several different legal forms available to housedrawn from the Social Enterprise Law Tracker. Designedtraditional businesses—including, for example, limitedas a comprehensive online resource for legal practitionersliability companies (LLC), C-corporations, and limitedand researchers, the Social Enterprise Law Tracker com-partnerships. Depending on factors that include howpiles relevant legislative actions across the United States.many people are forming the business, the preferredtax treatment, and how the individuals want their busi-Using an interactive map, the Social Enterprise Law Trackerness to be funded, businesses can choose a legal formaims to make it easy for users to see at a glance whichaccordingly.10 Similarly, different types of legal forms havestates allow for the various social enterprise legal struc-emerged to house social entrepreneurial approaches totures, as well as how social enterprise legislation hasdoing business. The Social Enterprise Law Tracker mapsspread across the country from 2009 to the present day.the following social enterprise legal forms: the benefitThe Social Enterprise Law Tracker is the first such toolcorporation, the social purpose corporation (SPC), theto provide comprehensive mapping of social enterpriselow-profit limited liability company (L3C), the benefitlegislation in the United States.limited liability company (BLLC), and the statutory publicbenefit limited partnership (SPBLP).11The Social Enterprise Law Tracker was first developedin 2013 by Shawn Pelsinger and Robert Esposito, bothWhile different states may adopt legislation using theJacobson Fellows in Law & Social Enterprise at New Yorksame label, social enterprise statutes are not uniform.University School of Law. The Social Enterprise Law TrackerTwo states, for example, may both adopt the benefitis now managed and updated by the Grunin Center forcorporation form, but the rules and regulations for theLaw and Social Entrepreneurship at NYU School of Law.9benefit corporation in each state may be very different.12Additionally, every form has undergone an evolutionas state legislatures consider the interests of the business community, the legal community, and the public.13 Still, it is important to note generally what thesecategorizations represent.10. For more information about different business forms, please see Choose a BusinessStructure, U.S. Small Bus. Ass’n, ness/choose-business-structure11. Social Enterprise Law Tracker, https://socentlawtracker.org/8. Social Enterprise Law Tracker, https://socentlawtracker.org/9. Grunin Center for Law and Social Entrepreneurship, epreneurship12. For example, See discussion of differences in the benefit corporation form fornewly enacted legislation, found in the section “The Benefit Corporation Form in 2020”of this report.13. See discussion infra section “Trends in Prior Attempts.”The State of Social Enterprise and the Law, 2020–2021 5
Mapping State LegislationSocial Enterprise Forms in the United StatesLLCL3CAvailable in:IL, LA, ME, MI, RI,UT, VT, WYCorporationBLLCAvailable in:DE, MD, OR,PA, UTBenefitCorporationAvailable in:41 states DC;Seesocentlawtracker.orgSocial PurposeCorporationAvailable in:CA, TX, FL, WALimitedPartnershipStatutory PublicBenefit LimitedPartnershipAvailable in:DETo start, there are two specialized limited liability companythe independent nonprofit organization, B Lab.16 SPCsforms intended for social enterprises. The L3C was theare an additional social enterprise form for corporations.first social enterprise form enacted in the United States,California, Washington, and Florida recognize SPCs asdeveloped as a purpose-driven LLC with the intention ofa distinct corporate form, while Texas simply allows allsecuring funding from United States private foundationsfor-profit corporations to adopt a social purpose withoutinterested in social investment in addition to grant-mak-creating a new specialized form.17ing.14 More recently, a separate LLC social enterprise formhas emerged with less focus on attracting funding—theMost recently, Delaware established a new social enterpriseBLLC.15 BLLC legislation has been enacted in five states,form that parallels a traditional limited partnership.18 Inand each state has done so somewhat differently.June of 2019, the law governing Delaware Limited Partnerships was amended to provide for the formation ofAdditionally, there are two common corporate formsthe SPBLP.19 The SPBLP is defined as a for-profit limitedauthorized by state law: benefit corporations and SPCs.partnership “that is intended to produce a public benefit The benefit corporation form has the most widespreadand to operate in a responsible and sustainable manner.”20adoption within the United States. Benefit corporationsAdditionally, the partnership can consider social, economic,must be distinguished from Certified B Corporationsand political considerations without violating its fiduciary(also commonly known as B Corps), which are not a legalduty to act in the best interest of the partnership.form, but rather companies that have been certified by16. See generally Certification, Certified B Corp., https://bcorporation.net/certification(last visited June 18, 2021)17. Tx. Bus. Org. Code. § 23.053.14. See 2017–2018 Tepper Report, supra note 1, at 6.15. Maryland was the first state to adopt the BLLC form. The legislative history makesno mention of funding incentives and notes only a minimal small business effect in thefiscal summary. S.B. 595, 2011 Leg., Reg. Sess. (Md. 2011).6 The Grunin Center for Law and Social Entrepreneurship18. For more about traditional limited partnerships, See Sean Peek, A Quick Guideto Limited Partnerships, CO—(Nov. 1, 2019), d-partnerships-explained19. 82 Del. Laws c. 46, § 30 (2019).20. Del. Code Ann. tit. 6, § 17-1202.
The Benefit Corporation Form in 2020provisions in the newly enacted legislation across the2020 was an especially active year for the benefit corpora-four states. Despite this continued legislative interest intion form. As states continue to enact benefit corporationthe benefit corporation forms, however, states still failedlegislation across the nation, the benefit corporation formto pass related legislation that would have provided spe-continues to evolve from its initial conception just 10 yearscialized treatment of benefit corporations, such as reducedago. States new and old are exploring different provi-taxes or interest rates on loans.2421sions for benefit corporations. Delaware has revisited itsexisting Public Benefit Corporation (PBC) statute, amending several key provisions.22 Additionally, four new statesenacted four very different benefit corporation statutes,with some major deviations from the model legislation.23The following chart highlights and compares several21. In 2010, Maryland was the first state to adopt a benefit corporation statute.22. See discussion infra section “Delaware 2020 Amendments to the BenefitCorporation.”23. See discussion infra section “Analysis of Enacted Legislation.”24 In 2020, this legislation under consideration was largely targeted toward specificsectors. NJ and PA considered financial incentives for manufacturing and industrialdevelopment in the form of reduced taxes and loan interest rates, respectively. A. 1298,2020-2021 Leg., Reg. Session, (N.J. 2020); H.B. 813, 2019-2020 Leg., Reg. Sess. (Pa.2019). For further discussion of the contents of the NJ bill, See Grunin Ctr. for Law &Soc. Entrepreneurship, Mapping the State of Social Enterprise and the Law 14 (2019)[hereinafter 2018–2019 Tepper Report] (discussing a substantially similar bill consideredin 2018). The Pennsylvania bill’s sponsor expressly stated that “We need to act now topromote benefit corporations so we can grow this exciting business sector.” Michael J.Driscoll, DCED Business Loan Rates for Benefit Corporations, House Co-SponsorshipMemorandum (Feb. 21, 2019), wMemoPublic.cfm?chamber H&SPick 20190&cosponid 28444; additionally,NY attempted, but failed, to enact a provision that would have permitted benefitcorporations to become public banks. S.B. 5565, 2019-2020 Leg., Reg. Sess. (N.Y. 2019).Selected Features in 2020’s Newly Enacted Benefit CorporationsAlabamaGeorgiaNew MexicoOhioVoting2/3 approval2/3 approval2/3 approvalmajorityBenefit DirectorNoneNoneNoneNoneStatutory Definitionof Stakeholders/Public Benefit“a positive effect, orreduction of negativeeffects, on one ormore communitiesor categories ofpersons (other thanshareholders solelyin their capacity asshareholders) or on theenvironment, includingeffects of an artistic,charitable, economic,educational, cultural,literary, medical,religious, social,ecological, or scientificnature”“a positive effect, orreduction of negativeeffects, on society,on the environment,or on one or morecommunitiesor categories ofpersons, entities,or interests, otherthan shareholdersin their capacityas shareholders,including effects ofan artistic, charitable,cultural, economic,ecological, educational,environmental, literary,medical, religious,scientific, social, ortechnological nature”general: “a positiveimpact on societyand the environment,taken as a whole, thatis material takinginto considerationthe corporation’s sizeand the nature of itsbusiness”; specific: “apositive effect on oneor more communitiesor categories ofpersons, other thanshareholders solelyin their capacity asshareholders, or on theenvironment, includingeffects of an artistic,charitable, economic,educational, cultural,literary, medical,religious, social,ecological or scientificnature”“bona fide positiveeffect or to reduce oneor more bona fidenegative effects ofan artistic, charitable,cultural, economic,educational,environmental,literary, medical,religious, scientific,or technologicalnature for the benefitof persons, entities,communities, orinterests other thanshareholders intheir capacity asshareholders”The State of Social Enterprise and the Law, 2020–2021 7
Mapping State LegislationSelected Features in 2020’s Newly Enacted Benefit CorporationsAlabamaGeorgiaNew Filing ionalOptionalRequiredNonePublic Availabilitypublic, posted ona website if any, orprovide a copy w/ocharge to any personrequesting a copyin writingpublic, posted ona website if any, orprovide a copy w/ocharge to any personrequesting a copyin writingNoneLimited Rightsof Actionderivative suitor directly bystockholders with 5%(private) or 5 million(publicly traded)ownershipno additionallimitationssuit by company orderivative lawsuitby: director, 2%shareholder, 5%shareholder of parentsuit by the benefitcorporation orderivative actionby: director, 25%shareholder (private), 2 million (publiclytraded)Limitations ofLiabilitydirector has no “dutyto a person other thanthe benefit corporationdue to any interest ofthe person in the statusof the corporation asa benefit corporationor in any public benefitprovision”director has no dutyto anyone who mayhave an interest in thepublic benefit(s) andno monetary liabilityfor failure to pursuepublic benefit(s)benefit corporation hasno monetary liabilitybenefit corporationhas no duty tobeneficiaries, nomonetary damagesfor failure to pursuepublic benefit(s)Appraisal RightsNonePermitted whenconverting either toor from a benefitcorporation25NoneFor corporationsformed 1971 and later:None“shareholders of record,and to any otherperson whomay request a copyin writing”Other Thingsof NoteFor corporationsformed before 1971:Undetermined26if publicly traded, anindependent directormust prepare thebenefit report“No particular purposeof a corporation haspriority over anyother purpose of thecorporation”25. O.C.G.A. § 14-2-1302(a)(5); Bill Text Section 2-2.26. The statute provides dissenting shareholders rights if there is an amendment that “changes substantially the purposes of the corporation,” but the statute does not articulatewhether a conversion to or from a benefit corporation would constitute a “substantial” change. Ohio Rev. Code Ann. § 1701.74(A)(3).8 The Grunin Center for Law and Social Entrepreneurship
Chart of the Selected Features inModel Legislation Available in 2020The new 2020 ABA Model Legislation draws on someThe Corporate Laws Committee of the American Bar Asso-lation and Delaware PBC statute. As a consequence, inciation (ABA) officially added the benefit corporation formaddition to the variations across the many states, legisla-to the 2020 Model Business Corporation Act (MBCA).tors now have a new model to consider in drafting ben-This new model chapter on benefit corporations has beenefit corporation bills. The chart below compares severalin discussions dating as far back as 2013, when the ABAkey provisions across the three different models. Notably,published a white paper exploring the possibility. Thatwith respect to limitations on rights of action, the 2020year, an astonishing seven states plus DC passed benefitABA Model Legislation diverges slightly with the highestcorporation legislation, for a total of 20 benefit corpora-bar on shareholder standing requirements.35 It remainstion statutes across the United States by the end of 2013.29to be seen whether the 2020 ABA Model Legislation willSince that initial white paper, the total number of benefitbecome widely adopted, or whether it will simply join thecorporation statutes has doubled. Perhaps in responsesea of variations across legislative forms.272830requirements from each of the 2017 B Lab Model Legis-to this significant state interest in this new legal form, in2019, the Corporate Laws Committee of the AmericanBar Association formally proposed an amendment to theMBCA.31 This new chapter has officially been adoptedin the 2020 MBCA, with only one change to the 2019proposal32—removing specialized appraisal rights forshareholders.33 This change coincides with the 2020 Delaware amendment, which also removed appraisal rightsfrom its PBC statute.3427. Model Bus. Corp. Act § 17 (2020) (Am. Bar Ass’n).28. A.B.A. Bus. Law Section Corp. Laws Comm., Benefit Corporation White Paper, 68Bus. Law. 1083 (2013).29. See Social Enterprise Law Tracker, https://socentlawtracker.org/30. By the end of 2018, just before the recent proposed amendment to the MBCA,there were already 35 benefit corporation statutes. By the end of 2020, the number hadincreased to 41. See id.31. A.B.A. Bus. Law Section Corp. Laws Comm., Proposed Changes to the ModelBusiness Corporation Act—New Chapter 17 on Benefit Corporations, 74 Bus. Law. 819,821 (2019) [hereinafter 2019 Proposed Changes to MBCA].32. See Grunin Ctr. for Law & Soc. Entrepreneurship, Mapping the State of SocialEnterprise and the Law 14 (2020) [hereinafter 2019–2020 Tepper Report] (discussingthe more specific contents of the 2019 proposed changes to the MBCA).33. Compare 2019 Proposed Changes to MBCA, supra note 31, with Model Bus. Corp.Act § 17 (2020) (Am. Bar Ass’n).34. See discussion infra section “Delaware 2020 Amendments to the BenefitCorporation–Appraisal Rights.”35. Model Bus. Corp. Act § 17.06 (2020) (Am. Bar Ass’n).The State of Social Enterprise and the Law, 2020–2021 9
Mapping State LegislationSelected Features in Model Legislation Available in 20202020 ABA ModelLegislation2017 B Lab ModelLegislation362020 AmendedDelaware PBC StatuteVoting2/3 approval2/3 approvalsimple majorityBenefit DirectorNoneOptionalNoneStatutory Definitionof Stakeholders/Public Benefit“a positive effect, or reductionof negative effects, on oneor more communities orcategories of persons (otherthan shareholders solely in theircapacity as shareholders) oron the environment, includingeffects of an artistic, charitable,economic, educational, cultural,literary, medical, religious, social,ecological, or scientific nature”distinguishes between generalpublic benefit and specific lThird-PartyStandardOptionalRequiredOptionalFiling RequirementsNonefile with Secretary of StateNonePublic Availabilitypublic, posted on a websiteif any, or provide a copy w/ocharge to any person requestinga copy in writingpublic, posted on a websiteif any, or provide a copy w/ocharge to any person requestinga copy in writingAvailable to shareholdersLimited Rights ofActionderivative suit or directly bystockholders with 5% (private)or 5 million (publicly traded)ownership; must be owned atthe time of the challengedact/omissiondirectly by the benefitcorporation or derivatively by 2%shareholder or 5% shareholderof parent; must be owned atthe time of the challengedact/omissionsuit may only be brought by 2%shareholders (private) or lesserof 2% vs 2,000,000 (publiclytraded)Limitations ofLiabilitydirector owes no duty “to aperson other than the benefitcorporation due to any interestof the person in the status ofthe corporation as a benefitcorporation or in any publicbenefit provision”no monetary liability for (1)disinterested director/officer foraction or inaction in consideringshareholder interests; (2)director/officer/benefitcorporation for failure topursue a public benefitdirector owes no duty to personsinterested in the public benefitsor balancing of shareholder andstockholder interests if “ordinary,sound judgment”Appraisal RightsNoneNoneNone36. Benefit Corp., Model Benefit Corporation Legislation (2017) [hereinafter 2017 B LabModel Legislation].10 The Grunin Center for Law and Social Entrepreneurship“a positive effect (or reductionof negative effects) on 1 ormore categories of persons,entities, communities or interests(other than stockholders intheir capacities as stockholders)including, but not limited to,effects of an artistic, charitable,cultural, economic, educational,environmental, literary,medical, religious, scientificor technological nature”
Trends and AnalysesTrends in PassageCount Of Social Enterprise Legislation2020 Trendsin U.S. 2020The benefit corporation remains the dominant social enterprise legal form under consideration. As shown in theSPBLP: 1chart above, the number of benefit corporation statutesSPC: 4far outnumbers any other social enterprise form. At theBLLC: 5start of 2020, 14 states remained without a benefit cor-L3C: 8poration form. Of these remaining states, half (seven)Benefit Corporation: 4137considered enacting benefit corporation legislation in2020.38 This is slightly fewer than the 10 states that considered enacting benefit corporation legislation in 2019.39However, the number of successfully enacted bills doubled to four in 2020,40 compared with just two in 2019.41Passage Rates for Benefit Corporation Bills48n Number of bills passed n Number of bills under consideration10By the end of 2020, there were 41 benefit corporationstatutes across the United States.42766The other social enterprise legal forms have had lesslegislative success. As of 2020, there are only five states44with BLLC legislation.43 As shown in the chart below, the2BLLC form has not been successfully enacted in any statessince 2018,44 and the number of proposed bills each year02017201820192020remains low. Although the bill failed to pass, Oklahomawas the only state to consider BLLC legislation in 2020.45Passage Rates for BLLC Bills49The proposed bill largely followed the Delaware BLLCn Number of bills passed n Number of bills under considerationstatute. It remains to be seen if the interest in the BLLC46form will persist and follow the growing popularity of theLLC form more generally.473237. Social Enterprise Law Tracker, https://socentlawtracker.org/38. Alabama, Georgia, Michigan, Mississippi, Missouri, New Mexico, and Ohio.39. See 2
The Social Enterprise Law Tracker. 8. This mapping of state legislation is based on findings drawn from the Social Enterprise Law Tracker. Designed as a comprehensive online resource for legal practitioners and researchers, the Social Enterprise Law Tracker com-piles relevant legislative actions across the United States. Using an interactive .
