zlacker

I'm interested about the public benefit corporation part here. Did the PBC status wind up changing anything at all here? How does a PBC sell itself or get acquired? How is a PBC supposed to terminate or wind down? If they violate their charter as Ello may have, who exactly enforces it or file a lawsuit, and what is their compensation?

>>gwern+(OP)
I suppose if the PBC was in debt then it could sell its assets, such as the Ello site, to pay its creditors and then dissolve.

>>gwern+(OP)
When ICANN was in danger of violating charter, CA AG was the one who enforced on them.

>>gwern+(OP)
Nobody should trust my opinion, I am not an attorney, let alone one specialized in this area.

In my understanding, a PBC is effectively the same as a for-profit company with regards to these sorts of things. Unlike a non-profit, a PBC has stock, which it can sell, so that's how it would get acquired. I believe that there were even some PBC SPACs back when that was fashionable.

> If they violate their charter as Ello may have, who exactly enforces it or file a lawsuit, and what is their compensation?

The only real thing a PBC does is change "shall maximize shareholder value" to "shall be managed in a manner that balances the stockholders’ pecuniary interests, the best interests of those materially affected by the corporation’s conduct, and the public benefit or public benefits identified in its certificate of incorporation." See here for Delaware: https://delcode.delaware.gov/title8/c001/sc15/

So it would look like any other shareholder grievance against management in form.

>>stevek+1o
More PBC vs non-profit info[0]:

> Benefit corporations are neither nonprofits nor hybrid nonprofits. Benefit corporations are for-profit corporations that need to consider stakeholders, morals, or missions in addition to making a profit for their shareholders. Nonprofits can't be benefit corporations, but they may create one. Due to the public benefit purpose provisions, expanded fiduciary duties of administrators, and extra shareholder rights created within the model benefit corporation laws, this structure may be helpful to operate and scale the earned-income activities of a nonprofit.

[0] https://www.upcounsel.com/public-benefit-corporation

>>stevek+1o
Where in that document are you seeing that non P.B.C. corporations are required to maximize shareholder value?

>>single+Jy
This document only talks about PBCs, so it wouldn’t be in this document. I am using that phrase because that’s how people refer to fiduciary duty (and similar things) when speaking generally. Obviously there is a lot of complexity in the rules around corporate governance.

>>stevek+Ez
People do talk about the fiduciary duty to maximize shareholder value when speaking generally. They are wrong.

There are only two fiduciary duties in this context: the duty of loyalty and the duty of care. A director of a corporation owes no fiduciary duty to maximize shareholder value.

>>single+pJ
Sure. I find it easier to use the same words everyone else uses in informal contexts even though there is obvious complexity and is not fully accurate.

>>stevek+OV
I think the point is the term is not so much 'not fully accurate' as 'actively incorrect' and should avoid being repeated as it leads to a false perception of how corporations actually work (or at least, it leads to an inaccurate idea of the origin of their behaviours).