Flexible Purpose Corporation

Flexible Purpose Corporation

A corporation in which the members of the board of directors have statutory duties other than making a profit for shareholders. A flexible purpose corporation may be formed for many purposes, such as to provide steady jobs to employees or to protect the environment. In other words, a flexible purpose corporation is not prohibited from earning and distributing profits, but is expected to do other things as well.
References in periodicals archive ?
The LAWF is a California Flexible Purpose Corporation founded in 2013, based in Los Angeles, California.
The flexible purpose corporation is a sort of benefit corporation
lite: the flexible purpose corporation enabling statute merely requires
Still, since the flexible purpose corporation form became available at
corporation, the flexible purpose corporation, or the other forms in the
which are similar to California flexible purpose corporations.
As with other types of state law corporations, whether a benefit corporation or a flexible purpose corporation can choose S corporation status depends on whether it meets the eligibility requirements for that status.
If a benefit corporation or flexible purpose corporation is required to be a C corporation because it does not meet one or more of the S corporation requirements, then the organization will be subject to the federal corporate income tax and its state equivalent, if any.
If instead a benefit corporation or a flexible purpose corporation is eligible to choose S corporation status and in fact elects to do so, then the income and permissible deductions of the organization pass through the corporation to its shareholders.
The bottom line is therefore that the net income earned by a benefit corporation or a flexible purpose corporation will be subject to federal income tax, and generally state income tax, either at the corporation level--if the organization is classified as a C corporation--or at the shareholder level--if the organization is classified as an S corporation.
See Anne Field, Why Prometheus Civic Technologies Is a Flexible Purpose Corporation, FORBES (Sept.
Proponents of the flexible purpose corporation also argued that the specific requirement to promote environmental sensitivity could be inappropriate for an entity with a more narrowly defined mission, for example, targeted economic development in low-income neighborhoods.
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