Flexible Purpose Corporation

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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.
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CODE [section][section] 2500-17 (West 2013) (authorizing flexible-purpose corporations in California); see also Dana Brakman Reiser, The Next Big Thing: Flexible Purpose Corporations, 2 Am.
See Sentementes, supra (highlighting inability to track effectiveness of benefit corporations and benefit LLCs); supra note 63 (describing greenwashing and its implications for flexible purpose corporations).
(45.) See Phila., Pa., Code [section] 19-2604(10) (2013) (granting tax credit to limited B Corps); see also Christen Clarke, Comment, California's Flexible Purpose Corporation: A Step Forward, a Step Back, or No Step at All?, 5 J.
(106.) See supra notes 57-60 and accompanying text (outlining L3C and flexible purpose corporation requirements).
Benefit corporations and flexible purpose corporations
the creation of flexible purpose corporations. (3) The most current
which are similar to California flexible purpose corporations. (65)
flexible purpose corporation. The stated purpose of these entities is to
Since benefit corporations and flexible purpose corporations are formed under existing state corporation laws while L3Cs are formed under existing state limited liability company laws, and since these state law differences generally lead to somewhat different federal tax treatments, it is best to consider them separately.
Both benefit corporations and flexible purpose corporations are formed under the corporation law of their respective states, although with the special provisions noted previously.
(149) L3Cs, like limited liability companies generally, can, however, also choose to be taxed as corporations (C or, if eligible, S), in which case the tax consequences are the same as noted above for benefit corporations and flexible purpose corporations. (150)
The Flexible Purpose Corporation originated in California, and was tailored to fit within that state's existing corporate code.
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