The bill modifies the "Public Benefit Corporation Act of Colorado" as follows:
- Eliminates the requirement for approval of two-thirds of the outstanding shares to convert an existing corporation to a public benefit corporation (PBC) or an existing PBC into a non-PBC, thereby defaulting to the majority vote requirement applicable to other corporate conversions ( section 1 of the bill);
- Eliminates the application of appraisal rights for shareholders objecting to the conversion of a non-PBC to a PBC ( section 1 );
- Clarifies that a director's ownership of stock in a PBC does not inherently create a conflict of interest and specifies that, absent a conflict of interest, a director does not act in bad faith and does not breach a duty of loyalty if the director, in directing the business of the PBC, fails to satisfy a requirement to balance shareholder pecuniary interests, the best interests of those materially affected by the action, and the specific public benefit of the PBC ( section 2 ); and
- Clarifies the requirements for actions to enforce the requirements imposed on directors to balance the interests of shareholders, those materially affected by the corporate action, and the public benefit of the PBC ( section 3 ).
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)