New Mexico becomes the latest state to adopt the Benefit Corporation law

Submitted by UCS on March 6, 2020

The New Mexico Legislature announced in February that new and existing business corporations will be able to become Benefit Corporations with the purpose of providing general and specific public benefit as defined under the House Bill 118. Governor Michelle Lujan Grisham has until March 2nd to sign the bill into law. Sponsor state Rep. Zachary Cook, R-Ruidoso told the Santa Fe Reporter upon the bill’s passage “I think it will mean that we will see new businesses incorporated here in New Mexico to take advantage of the status,” “And I hope to see, of course, more investment in our state from outside businesses and investors as well as job growth and innovation.”

What is a Benefit Corporation?

A Benefit Corporation is defined as a traditional corporation with modified obligations committing it to higher standards of purpose, accountability and transparency. The purpose of a Benefit Corporation is to commit to creating public benefit and sustainable value in addition to generating profit.

New companies can incorporate as a benefit corporation in any state where legislation has been passed. Existing companies can elect to become a benefit corporation by amending their governing documents. Amendment requires a 2/3 super-majority vote of all shareholders in most states. The procedure for filing amendments with the state is identical to that followed for any other corporate structure with the addition of a statement that the company is a benefit corporation.

For additional information on Oklahoma Benefit Corporations you may refer to House Bill 118 of the New Mexico Statutes.

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