AB 361: Benefit Corporation Legislation in CA

In 2011, the state of California became another in the growing list of states to consider Benefit Corporation legislation. Introduced by Assemblymember Jared Huffman of the 6th Assembly District, representing Marin and southern Sonoma County, the legislation proposes establishing a new type of corporation in the state.

Assemblymember Jared Huffman explained the legislation:

AB 361 – Benefit Corporations: This bill creates a new type of corporation for a new type of corporate social responsibility. Current law requires corporations to prioritize financial interests and shareholder profits. This bill creates a new, entirely voluntary type of corporate entity to let California businesses balance the pursuit of corporate profits with environmental and social goals. “Benefit Corporations” would operate under a broadened definition of fiduciary duty that allows business leaders, shareholders, and employees to include environmental stewardship and community development as part of their companies’ mission – people, planet, and profit.

The ability to incorporate consideration of people, planet, profit – the triple bottom line – allows Benefit Corporations to move past the limited focus on pursuit of financial profit, regardless of social and environmental impact. Instead, Benefit Corporations can focus on making a financial profit while also being socially and environmentally responsible.

The Benefit Corporation movement has been expanding nationwide:

  • Maryland and Vermont became the first states to pass legislation in 2010.
  • Since then, 27 states have passed legislation creating Benefit Corporations.
  • Delaware, legal home to 60% of Fortunate 500 companies, passed legislation in 2013.

A complete state-by-state list of Benefit Corporation legislation is available here.

If you’re interested in B Corporations, see the B Corp Certification overview and information page to learn more.


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  1. We’ve created a petition on Care2 to support the Benefit Corporation legislation. http://www.thepetitionsite.com/takeaction/993/713/047/

  2. Carolina Miranda says:

    Thanks for sharing the petition, Sue Anne! I just signed it.

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