Public benefit corporations
Q1. What is a Public Benefit Corporation?
A1. A public benefit corporation (PBC) is a for profit corporation or domestic cooperative that is intended to produce one or more public benefits and to operate in a responsible and sustainable manner. A PBC must be managed in a manner that balances the shareholders' pecuniary interests, the best interest of those materially affected by the corporation's conduct, and the public benefit identified in its articles of incorporation.
Q2. What is a public benefit?
A2. Section 7-101-503(2), C.R.S., defines public benefit as "one or more positive effects or reduction of negative effects on one or more categories of persons, entities, communities, or interests other than shareholders in their capacities as shareholders, including effects of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific, or technological nature."
Q3. What requirements must an entity satisfy in order to be a public benefit corporation (PBC)?
A3. An entity must satisfy several requirements to be a PBC, including the following:
- The articles of incorporation must identify one or more specific public benefits that the entity will promote,
- The articles of incorporation must state at the beginning that the entity is a PBC,
- The entity’s name must include the words "public benefit corporation" or the abbreviations "P.B.C." or "PBC", and
- Share certificates issued for a PBC must clearly indicate that the entity is a PBC.
For other requirements, see the Public Benefit Corporation Act of Colorado (HB 13-1138).
Q4. How do I form a public benefit corporation (PBC) entity?
A4. You should complete the appropriate form depending on whether you are creating a new entity or changing an existing entity through amendment, conversion or merger.
Q5. Does a public benefit corporation (PBC) or other entity that designates a charitable purpose in its organizational documents need to register under the Colorado Charitable Solicitations Act?
A5. In some cases, the specific public benefits a PBC identifies in its articles of incorporation may also fit the definition of a "charitable purpose" under the Colorado Charitable Solicitations Act. This may be the case with any other entity formed under Colorado law or the law of other states where the organizational documents reflect that a purpose of the entity fits within the “charitable purpose” definition. If the PBC or other entity intends to solicit funds in Colorado for that purpose, it may need to register as a charitable organization. See the charities FAQs.