§1803. Definitions

A. As used in this Chapter, the following terms and phrases shall have the meaning ascribed to them in this Section, unless the context clearly indicates otherwise:

(1) "Affiliate" means, in relation to a person, a subsidiary of the person or an entity which owns beneficially or of record a majority of the outstanding equity interests of the person.

(2) "Benefit corporation" means a business corporation which has elected to become subject to this Chapter and whose status as a benefit corporation has not been terminated.

(3) "Benefit director" means the director designated as the benefit director of a benefit corporation pursuant to R.S. 12:1822.

(4) "Benefit enforcement proceeding" means any claim or action for one or both of the following:

(a) Failure of a benefit corporation to pursue or create general public benefit or a specific public benefit set forth in its articles.

(b) Violation of any obligation, duty, or standard of conduct pursuant to this Chapter.

(5) "Benefit officer" means the individual designated as the benefit officer of a benefit corporation pursuant to R.S. 12:1824.

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

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

(8) "Material relationship" means the relationship between a person and a benefit corporation or any of its subsidiaries if any of the following apply:

(a) The person is, or has been within the last three years, an employee, other than a benefit officer, of the benefit corporation, or an affiliate of the benefit corporation.

(b) An immediate family member of the person is, or has been within the last three years, an employee, officer, or director of the benefit corporation, or an affiliate of the benefit corporation.

(c) There is beneficial or record ownership of five percent or more of the outstanding shares of the benefit corporation by either the person or an entity of which the person is a director, an officer, or a manager, or in which the person owns beneficially or of record five percent or more of the outstanding equity interests.

(9) "Minimum vote" means:

(a) In the case of a business corporation, the approval by holders of two-thirds of the shares present and voting of each class or series and any other approval or vote required under the Business Corporation Law or the articles.

(b) In the case of a domestic entity other than a business corporation, the approval by holders of two-thirds of each class or series of equity interests entitled to vote on any issue and any other approval or vote required under the law governing the internal affairs of the entity or its constituent documents.

(10) "Specific public benefit" means any of the following:

(a) Serving low-income or underserved individuals or communities.

(b) Promoting economic opportunity for low-income or underserved individuals or communities.

(c) Preserving the environment, promoting positive impacts on the environment, or reducing negative impacts on 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 purpose listed in this Paragraph.

(g) Historic preservation.

(h) Urban beautification.

(11) "Subsidiary" means, in relation to a person, an entity in which the person owns beneficially or of record fifty percent or more of the outstanding equity interests.

(12) "Third-party standard" means a recognized standard for defining, reporting, and assessing the performance of corporations in producing general public benefit and specific public benefits which is all of the following:

(a) Comprehensive in that it assesses the effect of the corporation and its operations in producing general public benefit and any specific public benefit specified in the articles.

(b) Transparent because the following information about the standard is publicly available:

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

(ii) The relative weightings, if any, of those criteria.

(iii) The identity of the directors, officers, material owners, and the governing body of the organization 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 are made.

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

B. Terms not otherwise defined in Subsection A of this Section shall have the meanings given to them in the Business Corporation Law.

C. For purposes of the definitions in this Section, a percentage of ownership in an entity shall be calculated as if all outstanding rights to acquire equity interests in the association have been exercised.

Acts 2012, No. 442, §1.