Flexible Purpose Corporation (FPC) – California S.B. 201 was signed into law on October 9th, creating the opportunity for MBF to emerge as a new corporate form, with a similar mission to that of a B Corp.
The law requires that Maximum Balance Foundation (MBF) must specify at least one “special purpose” in its charter, such as promoting environmental sustainability or minimizing adverse effects on its employees.
Therefore; Maximum Balance Foundation’s primary purpose is to promote, advocate, and sustain growth in Science, Technology, Engineering, Arts, Music and Math (STEAMM). We operate in underserved, under banked, communities in Border States within the United States of America.
We achieve our goals through creative community partnerships, whose value is determined by Social Return on Investment, a tool that measures both ROI, and its overall impact on correcting social ills.
In exchange, an MBF is given a new “safe harbor” (in addition to the business judgment rule): boards and management are protected from shareholder liability when they weigh their special purpose(s) against shareholder value – both in the ordinary course of business and in change of control situations.
Maximum Balance Foundation is distinguished from the LLC and Benefit Corporation in that it is primarily intended for use by for-profit companies seeking traditional capital market investment.
Maximum Balance Foundation differs from the traditional corporate form in the following primary ways:
- Qualifying Special Purpose. MBF has one or more social and/or environmental purpose(s) agreed upon between management and shareholders, and included in the charter. MBF is not permitted to change its purpose without a two-thirds vote of each class of voting shares.
- Protection from Liability. MBF provides protection from liability for directors and management who make decisions on the basis of the agreed special purpose(s).
- Conversion of Other Forms. An existing public or private corporation (LLC, partnership, or other entity) can convert into an FPC with two-thirds vote of each class of voting shares, with dissenter’s rights.
- Reporting. MBF is required to publish regular reports with objectives, goals, measurement, and reporting on the impact or “returns” of social/environmental actions.
- Enforcement. As fiduciary duties include the special purpose(s), shareholders have traditional enforcement rights with respect to the special purpose(s) (removal of directors and/or legal action); other “stakeholders” will not have enforcement rights.