What is a Sustainable Business Corporation or B-Corp?

You can now find Hawaii’s Sustainable Business Corporations at Chapter 420D of the Hawaii Revised Statutes. (UPDATED 10.08.12)

Act 209 Establishes an organizational and regulatory framework for sustainable business corporations.  “Sustainable business corporations” or “benefit” corporations (b-corps) are a specialized corporation committed to sustainable practices.  Their intended purpose is to develop and commit to sustainable practices and produce a public benefit.

Consider it a marriage between for-profit corporations with the public good that a non-profit is supposed to provide.

Some Specifics

Filing and Maintenance

Basically, you or your attorney would file the normal Articles of Incorporation with the Department of Commerce and Consumer Affairs (DCCA).  However, to put in the sustainable part an attachment would have to be filed that has a statement declaring that this a sustainable business corporation.

In general, when maintaining a B-Corporation you are following everything set forth by Chapter 414 (the Hawaii Business Corporation Act) of the Hawaii Revised Statutes.  The additional paperwork necessary will come from whatever chapter number the Legislative Reference Bureau decides to assign this Act.

Benefit Director and Benefit Officer

In addition, a sustainable business corporation is required to have a benefit director.  It also may choose to have a benefit officer. The role of these positions is to maintain that the company is following its goals for benefit and keeps record of it.  The benefit officer prepares the annual benefit report using a standard developed by a third party.  This third party acts sort of like an accounting firm for a corporation that publishes its financials.  The third party determines whether or not the goals are being met.

DCCA’s Role

The government’s role with a benefits corporation is minimal and only ministerial. DCCA will accept the filing and you only need interact with it and other governmental agencies, as you would normally do with a regular corporation.  The prime example is this:  a corporate annual report needs to be filed with the DCCA, but the benefit report that needs to be produced is for the shareholders.  The benefit report does not get filed with DCCA.   In fact, the hope of this Act is that the corporations make a commitment to sustainable business practices and produce communal benefit and that the shareholders who agree to invest in them police themselves.  Government role is kept to a minimal.

Last Word

If you are interested in specifics about creating a B-corporation you can contact me or if you want to know what kind of resources or generalized information check out Certified B Corps.  It is a good site to get a grasp about what a B Corps is and what is going on a national level.  If you liked this post or any of my other series please “Subscribe” to this blawg to receive e-mail updates.  In addition, follow me on Twitter and “Like” me on Facebook.  If you need to contact me directly, please e-mail me at Ryankhew@hawaiiesquire.com.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Hey everyone, today’s Law in the Brief will be short and simple, but I am connecting it to this Thursday’s Draw the Law so check back later. So do you remember that explosion out in Waikele that killed 5 workers?  Well, that is the kind of situation that might be fined under the Act we are discussing today depending on what investigators discover.  That is the type of situation that falls under Hawaii Occupational Safety and Health Law (HIOSH), which means the company could face severe penalties for violations.

What: Act 123 of this year’s state legislative session has increased the fines under Chapter 396 (HIOSH) of the Hawaii Revised Statutes.  Basically, this is the state of Hawaii’s version of the Occupational Safety and Health Act (OSHA). HIOSH is administered by the Hawaii’s Department of Labor and Industrial Relations (DLIR). So this week’s Draw the Law will discuss OSHA and HIOSH together.

Specifics:  The law makes a 10% increase across the fines found under HRS §396-10.  Here are the specifics of the penalties for an employer or other concerned parties:

  1. if cited for a serious violation, and non-serious one as well – $7,700;
  2. if cited for violating the posting requirements – $7,700;
  3. for willful or repeated violations of 396 – $5,500 – 77,000 for each violation;
  4. if convicted for willful or repeated violations that results in an employee death it is $77,000 for the violation and a possible imprisonment term;
  5. if you discharge or discriminate against employee for asserting rights under 396 it is a $1,100 per violation;
  6. if someone without authority from DLIR Directors gives advanced warning of a surprise inspection it is $1,100 and possible imprisonment;
  7. for falsifying records, certification and documentation it is $11,000 and/or possible imprisonment;
  8. for criminal offenses against employees of the State doing their job it is $55,000 added to the maximum fine for a class A felony and ten years added to the term;
  9. for Class B felonies it is $27,500 added and a five years;
  10. for Class C felonies it is $11,000 added and three years; and
  11. for misdemeanors and petty misdemeanors it is $2,200 added and 1 year added to the term.

Last Word:  So in this economic downturn can you face increase 10% penalties?  That could be up to an extra $700 for a serious violation.  Are you ready to afford extra penalties and possible imprisonment? If you are trying to comply with safe and health standards contact an attorney or a safety specialist to help you point out problems in your business to avoid violating HIOSH.  In addition, return to this Blawg Thursday to check out Draw the Law.

If you like this post or any of my other series please “Subscribe” to this blawg to receive e-mail updates.  In addition, follow me on Twitter and “Like” me on Facebook.  If you need to contact me directly, please e-mail me at Ryankhew@hawaiiesquire.com.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

 

 

Act 49: Restricting the Use of the Geographic Origin of Hawaii-Grown Coffee on Coffee Labels
This week we are talking coffee because a) as an attorney I am also interested in how the government tries to regulate certain businesses in terms of compliance ad consumer education and b) I like anything related to food and drink because I run a food blog.

Business and Consumer Impact:  The purpose of Act 49 is to try and insure that producers of coffee blends include one or more Hawaii-coffees contains labeling that tells the consumer exactly what are the contents of the package and what is their geographic origin.  In the case of this law an example would be best to show the situation the Legislature is intending to deal with.

Let’s say you have a package of coffee that uses one or more Hawaii-grown coffee that has two labels, a primary one, and then a secondary one.   The secondary one states that the coffee is “Kona Vanilla Macadamia Nut.”  However, in actuality it only contains 10% Kona coffee blend.  With this Act now in effect as law it will be illegal to do so.

Specifics:  The way the law works is by amending part of Hawaii law.  Specifically, Section 486-120.6, which handles the labeling requirements for Hawaii-grown roasted or instant coffee.  In general, Chapter 486 concerns Measurement Standards for many other types of products and what kind of identification is necessary for them.  Things such as “island fresh” milk, macadamia nuts, and acacia koa wood all have certain necessary requirements to represent their origin and content.

One hundred per cent of the roasted or instant coffee contained in the package is from the geographic origin

In the case of these new amendments to the coffee labeling requirements by adding four new types of violations (which are found in part (c) of the law).  They are as follows:

  1. Use a geographic origin on the front label panel of a package of roasted or instant coffee other than in the trademark or in the identity statement as authorized in subsection (a)(1) and (2) unless one hundred per cent of the roasted or instant coffee contained in the package is from that geographic origin;
  2. Use more than one trademark on a package of roasted or instant coffee unless one hundred per cent of the roasted or instant coffee contained in the package is from that geographic origin specified by the trademark;
  3. Use a trademark that begins with the name of a geographic origin on a package of roasted or instant coffee unless one hundred percent of the roasted or instant coffee contained in the package comes from that geographic origin or the trademark ends with words that indicate a business entity; or
  4. Print the identity statement required by subsection (a) in a smaller font than that used for a trademark that includes the name of a geographic origin pursuant to paragraph (7) and in a location other than the front label panel of a package of roasted or instant coffee.”

The main part to take away from the first three amendments is the “one hundred per cent of the roasted or instant coffee contained in the package is from the geographic origin.”  Why?  The ultimate goal and intent by the Legislature is to the end the confusion that consumers are purchasing 100% origin product (i.e. “Kona coffee” is ALL from Kona) rather than a blend (which in some cases is only 10% from Kona).  The method, in which they do this, in the case here, is by limiting the use of point of origin coffee names on the package.

Violation:  If any person or company is found violating any part of Chapter 486, including these new amendments to the coffee labeling requirement law, the State Department of Agriculture’s Measurement Standards Branch is charged with enforcement.  The law for Offenses and Penalties found under Chapter 486 is Section 32, which states $2,000 for each separate offense.

 

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

New Law in the Brief will be taking a brief hiatus next week as I will be rolling out a new series of Social Media and a Law.  This will be a multi-part series of posts detailing the interaction of various parts of the law, legal community, and the rise of social media platforms.  Hope you find them and tweet about them!

Act 37: Permitting Hawaii Nonprofit Boards to Take Actions by Ballot and Electronic Voting, Use of Electronic Notice, and Conduct of Meeting by Teleconference

Business Impact: The purpose of Act 37 is really to modernize the way Hawaii nonprofit corporation boards operate and handle their affairs.  Basically, it allows nonprofit directors to use electronic communications technology to permit member actions by ballot, conduct voting, provide notice, and conduct meetings.

Specifics of the Law:  This new law amends parts of Chapter 414D of the Hawaii Revised Statutes, the Hawaii Nonprofit Corporations Act.  Specifically, the law adds in language that allows nonprofit board to take action through the use of electronic means.  Therefore, the law is permitting the use of email, fax, teleconferencing to make a lot of the formalities necessary to carry on a nonprofit corporation easier and at the discretion of the board.

Our Nonprofit Board has been Doing this Already does that Mean Our Past Decisions were Prohibited?

Probably not, as it was noted the way the law was written prior to this change did not specifically prohibit the use of communication technologies.  However, it was the wishes of the Hawaii State Government to provide some clarity and give assurances to nonprofit corporations that if they choose to operate in this manner than they are conforming to the law.  The only past acts that may be prohibited by your Board is if you did not comply with your own bylaws or did something that was a direct conflict of interest with the goals of the nonprofit.

However, every situation is unique and if you have concerns with the use of electronic communications in your board meetings, notices, or the conduct of balloting and voting you should seek an attorney for review and advice.

Reasonable Measures to Verify a Person’s Identity

Even with the new changes the fact that you can use electronic means to communicate should make your life easier, but the only caveat is that within the law it states that “[t]he corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of the Internet, teleconference, or other electronic transmission technology is a member or proxy of a member.”

Basically, only authorized people are allowed to vote and make decisions, and that would be the board of directors and officers.  If your nonprofit uses unreliable or unsecure methods of communication it would be difficult to say you took reasonable steps to verify a person’s identity when conducting a meeting.

Bottom line:  The changes in this law are meant to help nonprofit boards, especially ones with members across the islands, do their business with the security and ease of using electronic communication. However, with that being said you probably want to make sure your bylaws, articles of incorporation, and procedures are up-to-date and the way you conduct yourselves is legal.  Also you probably want to check your bylaws and make sure they do not prohibit specific types of technologies, as some types of nonprofits wanted to keep that face-to-face interaction required of meetings in the past.  Lastly, your notices and ballot measures are not simplified just because you are using email.  There are certain requirements that still need to be followed.  The means are easier, but the goal is to keep the substance the same.

Next law to be covered: For your coffee people to New Law in the Brief will be focusing on Act 49, which is meant to restrict the use of terms indicating geographic origin of Hawaii-grown coffee on coffee packaging.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.   Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Act 34: Protecting Gender Expression or Identity in the Workplace

Business Impact: Act 34 prohibits discrimination on the basis of gender identity or expression as a matter of public policy, specifically with regards to employment.  Basically, if you or the work environment you foster is insensitive to gender expression or identity of your employees, you may face enforcement action by the Hawaii Civil Rights Commission for discriminatory practices.  Discriminating against an employee expressing their preferred gender would be the same as discriminating against women, handicapped persons, or people of a certain race.

Specifics of the Law:  This new law amends two parts of Hawaii law, Section 368 and 378.  By amending Section 368, the law gives the Hawaii Civil Rights Commission (HCRC) the enforcement power over gender identity or expression discrimination cases.  In addition, by amending Section 378, the law aims to prevent discrimination in the workplace by making gender expression and identity a protected status similar to other categories, such as disability, race, age, and sexual orientation.

What Does “Gender Identity or Expression” Mean?

As you may already know the State already protects sexual orientation from discrimination.  You may think that sufficiently covers what is known as “gender identity or expression.”  However, that is not necessarily the case.

Sexual orientation is only describing one’s preference based on the gender of the partner.  In terms of gender expression and identity, a transgender person can have any sexual orientation.  Basically, the gender status is not the same as one sexual preference.  Gender identity is one’ internal feelings of being male or female or along those lines.  Gender expression represents all of the social and behavioral characteristics associated with femaleness or maleness.

Example

Consider a male truck driver wishing to make the transition to female.  Their appearance at work continues to be more and more feminine.  Other workers, due to the change, harass the transitioning worker.  The truck driver comes to you to discuss the harassment and gender transition.  If you suspend them for this action, then you would likely  face a visit from the HCRC for discriminating against your employee’s gender expression and identity.

Bottom line:  Is your company’s policies and procedures equipped to handle this change in the law?  Does your handbook reflect the changes?  Consider the following situations for reasonable accommodation or to prevent bias in the workplace:

  • Restrooms
  • Self-identification papers, check cards, etc . . .
  • Housing and facilities like locker/dress rooms
  • Dress code

There may be other situations that you may need to safeguard from gender expression or identity discrimination.  You should consider a legal review of your work policies, procedures, and handbooks.

Next law to be covered: Act 37, allowing non-profits to take actions by ballot and electronic voting, use of electronic notice, and conduct of meeting by teleconference. 

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.   Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.