Benefit Corporation

Benefit Corporations were introduced into our legal system, as the first country in the world after the United States, by Law No. 208/2015 (the so-called 2016 Stability Law).
Benefit Corporations are configured as companies that “in the exercise of an economic activity, in addition to the purpose of dividing its profits, pursue one or more purposes of common benefit and operate in a responsible, sustainable and transparent way towards people, communities, territories and the environment, cultural and social goods and activities, bodies and associations and other stakeholders” (ex. art. 1 co. 376, Law no. 208/2015).
“Purpose of common benefit” means the pursuit, in the exercise of economic activity, of one or more positive effects, or the reduction of negative effects, towards one or more categories included among people, communities, territories, environment, cultural and social goods and activities, bodies and associations and other stakeholders (ex art. 1, co. 378, L. no. 208/2015).
The Benefit Model, therefore, requires combining the goal of profitability with the goal of sustainability, that is, integrating one's business strategy-aimed at making a profit-with the goal of pursuing specific purposes of common benefit.
Benefit Corporations, therefore, can be considered an evolution of traditional companies while not representing a new legal form of company, since they can take the form of both partnerships and corporations, with application tout court of the relevant code and other special laws.
The status of a Benefit Corporation can be achieved, at the stage of incorporation of a company or in the event of transformation of an existing company, provided that certain requirements are met.
First of all, the Legislature provides for the obligation to amend its articles of incorporation or bylaws, specifying within the organization's name or corporate name the Italian term “Società Benefit” or “SB” and including in the corporate purpose a dual corporate purpose (ex art. 1 co. 379, L. no. 208/2015), i.e.:
-    profit-making purpose, to be pursued in a responsible, transparent and sustainable manner;
-    one or more purposes of common benefit, aimed at the realization of “one or more positive effects or the reduction of negative effects” towards stakeholders.
In addition, the governing body of a Benefit Corporation is required to manage the corporation in a responsible, sustainable and transparent manner, balancing the interest of the shareholders, the pursuit of the common benefit purposes and the interests of the various stakeholders involved, as well as to identify and appoint one or more responsible individuals to whom it entrusts functions and tasks aimed at the pursuit of the common benefit purposes, namely the Impact Manager (ex art. 1 co. 380, L. no. 208/2015). Failure to do so may constitute a breach of the duties imposed on directors by law and bylaws (ex art. 1 co. 381, L. no. 208/2015).
To safeguard the expectations of stakeholders who have relied on the Benefit Company status as a guarantee of the effective pursuit of common benefit purposes, the Legislature has prescribed a burden of publicity on the company, namely the publication of the Common Benefit Management Report (so-called Impact Report).
In order to meet this burden, Benefit Corporations, must undergo a quantitative and qualitative assessment of their social and environmental performance (so-called Generated Impact Assessment), using an external assessment standard that meets the requirements set forth in the 2016 Stability Law, under which:
-    the Generated Social Impact Assessment must be conducted annually and include the following areas of analysis: corporate governance, workers, environment and other stakeholders;
-    the external evaluation standard must be comprehensive and articulate, credible and transparent, and developed by a third-party entity with respect to the company (Annex 4 of Law No. 208/2015).
Therefore, the company is required to prepare annually the Impact Report, concerning the pursuit of the common benefit, to be attached to the corporate financial statements, which includes pursuant to Art. 1 co. 382 former Law No. 208/2015:
a)    a description of the specific objectives, methods and actions implemented by the directors in pursuit of the purposes of common benefit and any circumstances that prevented or slowed it down;
b)    the Assessment of the Impact generated using the external assessment standard having as its focus governance, workers, other stakeholders and the environment (the so-called assessment areas identified in Annex 5 of the Law);
c)    a section devoted to describing the new objectives that the company intends to pursue in the next financial year.
This Report, in order to fulfill the transparency obligations of the Benefit Model, must be published on the company's website (ex art. 1 co. 383, Law no. 208/2015).
In addition, the Legislature has subjected Benefit Companies to the regulations set forth in Legislative Decree No. 145/2007 on misleading advertising and the provisions of the Consumer Code (Legislative Decree No. 206/2005), identifying the Antitrust Authority (AGCM) as the control body, in order to protect the expectations of consumers who have relied on the wording “Benefit Company” (ex art. 1 co. 384, L. no.208/2015), countering, for example, the so-called greenwashing phenomena. Specifically, the assumption on which the Legislature is based is that the use of the corporate Italian term “Società Benefit” or “SB” in commercial communications, in the event that it does not result in an actual effort aimed at the pursuit of the purposes of common benefit, may constitute an example of deceptive advertising or business practice.
In conclusion, the Legislature has introduced a new model of society that inevitably associates the exercise of economic action with the simultaneous realization of common benefits and positive impacts, in terms of creating value for the environment, for workers and all stakeholders, and in general, for the entire community.