2023 House Bill 5387

House Fiscal Agency Analysis

The bills would provide that a domestic corporation formed under the Business Corporation Act is a benefit corporation and subject to the new chapter if its articles of incorporation state that it is a benefit corporation. House Bills 5387 and 5388 would create additional costs for the Department of Licensing and Regulatory Affairs (LARA), namely for upgrades, revisions, and the creation of new documents for benefit corporations. An initial estimate from LARA indicated that $500,000 would likely be required for IT enhancements and the creation of forms for these entities. There may also be indirect costs associated with LARA’s regulation of benefit corporations (such as administrative enforcement proceedings), but these costs may or may not arise. Under HB 5387, benefit corporations would be required to file an annual benefit report with LARA and this filing would be subject to a $25 fee. The revenue from this fee would depend on the number of benefit corporations, and is thus currently indeterminate.