Code of the District of Columbia

Subchapter III. Accountability.


§ 29–1303.01. Standard of conduct for directors.

(a) In discharging the duties of their respective positions and in considering the best interests of the benefit corporation, the board of directors, committees of the board, and individual directors of a benefit corporation:

(1) Shall consider the effects of any action upon:

(A) The shareholders of the benefit corporation;

(B) The employees and work force of the benefit corporation, its subsidiaries, and its suppliers;

(C) The interests of customers as beneficiaries of the general public benefit or specific public benefit purposes of the benefit corporation;

(D) Community and societal factors, including those of each community in which offices or facilities of the benefit corporation, its subsidiaries, or its suppliers are located;

(E) The local and global environment;

(F) The short-term and long-term interests of the benefit corporation, including benefits that may accrue to the benefit corporation from its long-term plans and the possibility that these interests may be best served by the continued independence of the benefit corporation; and

(G) The ability of the benefit corporation to accomplish its general public benefit purpose and any specific public benefit purpose;

(2) May consider other pertinent factors or the interests of any other group that they deem appropriate; and

(3) Need not give priority to the interests of a particular person or group referenced in paragraph (1) or (2) of this subsection over the interests of any other person or group, unless the benefit corporation has stated in its articles of incorporation its intention to give priority to certain interests related to its accomplishment of its general public benefit purpose or of a specific public benefit purpose identified in its articles of incorporation.

(b) The consideration of interests and factors in the manner required by subsection (a) of this section does not constitute a violation of § 29-306.30.

(c) A director is not personally liable for monetary damages for:

(1) Any action taken as a director if the director performed the duties of office in compliance with § 29-306.30 and this section; or

(2) Failure of the benefit corporation to create general public benefit or specific public benefit.

(d) A director does not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.


(May 1, 2013, D.C. Law 19-305, § 2(b), 60 DCR 2735.)

Section References

This section is referenced in § 29-1301.02, § 29-1303.02, and § 29-1303.03.


§ 29–1303.02. Benefit director.

(a) The board of directors of a benefit corporation shall include one director, who:

(1) Shall be designated the benefit director; and

(2) Shall have, in addition to the powers, duties, rights, and immunities of the other directors of the benefit corporation, the powers, duties, rights, and immunities provided in this subchapter.

(b) The benefit director shall be elected, and may be removed, in the manner provided by subchapter VI of Chapter 3 of this title, and shall be an individual who is independent. The benefit director may serve as the benefit officer at the same time as serving as the benefit director. The articles of incorporation or bylaws of a benefit corporation may prescribe additional qualifications of the benefit director not inconsistent with this section.

(c) The benefit director shall prepare, and the benefit corporation shall include in the annual benefit report to shareholders required by § 29-1304.01, the opinion of the benefit director on each of the following:

(1) Whether the benefit corporation acted in accordance with its general public benefit purpose and any specific public benefit purpose in all material respects during the period covered by the report; and

(2) Whether the directors and officers complied with §§ 29-1303.01(a) and 29-1303.03(a), respectively.

(3) If, in the opinion of the benefit director, the benefit corporation or its directors or officers failed to comply with §§ 29-1303.01(a) and 29-1303.03(a), a description of the ways in which the benefit corporation or its directors or officers failed to comply.

(d) The acts of an individual in the capacity of a benefit director shall constitute for all purposes acts of that individual in the capacity of a director of the benefit corporation.

(e)(1) If an agreement among the shareholders of a benefit corporation under § 29-305.42 provides that the powers and duties conferred or imposed upon the board of directors shall be exercised or performed by a person other than the directors, the bylaws of a benefit corporation must provide that the persons or shareholders who perform the duties of the board of directors include a person with the powers, duties, rights, and immunities of a benefit director.

(2) A person that exercises one or more of the powers, duties or rights of a benefit director under this subsection:

(A) Does not need to be independent of the benefit corporation;

(B) Shall have the immunities of a benefit director;

(C) May share the powers, duties, and rights of a benefit director with one or more other persons; and

(D) Shall not be subject to the procedures for election or removal of directors in § 29-306 unless:

(i) The person is also a director of the benefit corporation; or

(ii) The bylaws make those procedures applicable.

(f) Regardless of whether the articles of incorporation of a benefit corporation include a provision eliminating or limiting the personal liability of directors authorized by § 29-302.02(b)(4), a benefit director shall not be personally liable for any action taken, or any failure to take any action, as a director, except liability for:

(1) The amount of a financial benefit received by a director to which the director is not entitled;

(2) An intentional infliction of harm on the corporation or the shareholders;

(3) A violation of § 29-306.32; or

(4) A violation of criminal law.


(May 1, 2013, D.C. Law 19-305, § 2(b), 60 DCR 2735.)

Section References

This section is referenced in § 29-1301.02 and § 29-1304.01.


§ 29–1303.03. Standard of conduct for officers.

(a) Each officer of a benefit corporation shall consider the interests and factors described and in the manner provided in § 29-1303.01(a) if:

(1) The officer has discretion to act with respect to a matter; and

(2) It is reasonably apparent to the officer that the matter may have a material effect on the creation of general public benefit or a specific public benefit identified in the articles of incorporation of the benefit corporation.

(b) The consideration of interests and factors as provided by subsection (a) of this section shall not constitute a violation of § 29-306.42.

(c) An officer is not personally liable for monetary damages for:

(1) Action taken as an officer if the officer performed the duties of the position in compliance with § 29-306.42 and this section; or

(2) Failure of the benefit corporation to pursue or create general public benefit or specific public benefit.

(d) An officer does not have a duty to a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the beneficiary’s status.


(May 1, 2013, D.C. Law 19-305, § 2(b), 60 DCR 2735.)

Section References

This section is referenced in § 29-1303.02.


§ 29–1303.04. Benefit officer.

(a) A benefit corporation may designate a benefit officer.

(b) A benefit officer shall have:

(1) The powers and duties relating to the purpose of the corporation to create general public benefit or specific public benefit provided:

(A) By the bylaws; or

(B) Absent controlling provisions in the bylaws, by resolutions or orders of the board of directors; and

(2) The duty to prepare the benefit report required by § 29-1304.01.


(May 1, 2013, D.C. Law 19-305, § 2(b), 60 DCR 2735.)

Section References

This section is referenced in § 29-1301.02.


§ 29–1303.05. Right of action.

(a) Except in a benefit enforcement proceeding, no person may bring an action or assert a claim against a benefit corporation or its directors or officers with respect to:

(1) Failure to pursue or create general public benefit or a specific public benefit set forth in its articles of incorporation; or

(2) Violation of a duty or standard of conduct under this chapter.

(b) A benefit corporation shall not be liable for monetary damages under this chapter for any failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.

(c) A benefit enforcement proceeding may be commenced or maintained only:

(1) Directly by the benefit corporation; or

(2) Derivatively by:

(A) A shareholder;

(B) A director;

(C) A person or group of persons that owns beneficially or of record 5% or more of the equity interests in an entity of which the benefit corporation is a subsidiary; or

(D) Other persons as specified in the articles of incorporation or bylaws of the benefit corporation.


(May 1, 2013, D.C. Law 19-305, § 2(b), 60 DCR 2735.)