The new business classification will be available to Idaho corporations in July.
Supporters said the traditional legal status gave corporations one overriding mission: maximizing profits. In theory, investors could sue board members or executives of traditional corporations for pursuing secondary goals that cut into profits, such as paying to offset carbon emissions, donating to charities or even paying employees higher than a competitive wage. The new law provides limited protection from such lawsuits.
Twenty-seven states have passed laws allowing benefit corporations, and more than 12 states are considering laws similar to Idaho’s.
Lisa Fisher, owner of Vuelo Consulting in Boise and Seattle, said she has worked with Idaho businesspeople and lawmakers trying to authorize benefit corporations since 2010. Fisher said the law will give socially minded Idaho businesses a legal framework to do the kind of work they’re already doing.
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“This has always been in the fiber of the community,” she said. “It’s just a confirmation of the values that Boise and Idaho already hold dear.”
Some companies in Idaho and elsewhere are already certified as “B Corps.” Those certifications are provided by B Lab, a nonprofit, and have no legal status.
The bill passed unanimously in both Idaho chambers.
Jitasa, a Boise accounting firm that specializes in services for nonprofit clients, will apply for benefit corporation status, founder and CEO Jeff Russell said.
“We’re thrilled that Idaho is joining a movement of states around the country that have the status,” Russell said. “I think it’s good for business for Idaho.”
Boise marketing firm Oliver Russell has said it will likely apply, too.