Good news for B Corporations: AB 361 Passes in the CA Assemly!

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Good news for B Corporations: AB 361 Passes in the CA Assemly!

Great news: AB361 passed with majority support in the vote on May 3rd!

The bill was supported by Assemblymember Jared Huffman, and would authorize and regulate the formation and governance of a new form of corporate entity known as a benefit corporation. The only two dissenters were the two republicans, which surprised everyone since this is not a partisan issue. Assemblymember Huffman did an amazing job of presenting the bill, and as you can see from the picture, there were many influential folks there testifying in support of the bill. In the group are the founders of RSF Social Finance, Method,Guayaki, Kinesys, AlterECO, and folks from New Resource Bank, The Clarity Project, the American Sustainable Business Council, and the law firms of Wendell Rosen Black & Dean and Hanson Bridgett.

The opposing arguments came from the California State Bar Association and a representative from the non-profit sector. The bar thinks this could give stakeholders too much control to do whatever they want at the expense of the directors of a corporation. Huffman refuted that saying the increased transparency required to be a B Corp would prevent stakeholders from doing anything in extreme conflict with directors’ interests.

The non-profit sector rep said that non-profits can do this “benefit” work better. Huffman said this bill would increase the funds to non-profits and actually better enable existing non-profits to do the great work they do.

This is only one of the steps in the long walk to November but it was a really important one and the amount of enthusiasm and support shown at this early stage is giving this a lot of momentum. We were proud to be there to testify in support of this important legislation, and make a stand for a new type of corporate structure that legally supports doing the right thing!

Please note: while Dharma was a Registered B Corp at the time of this posting, it no longer is.