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experienced and knowledgeable agent or consultant is essential in order to obtain the right
coverage at the lowest premium.

3.6.9 Tax Exempt Status

Forming an organization as a nonprofit corporation does not necessarily indicate that it is also a
tax exempt organization. In order for the nonprofit corporation to also be classified as a tax
exempt organization, it must (a) qualify as an exempt organization under the Code, and
(b) obtain a determination letter on tax exempt status by filing a Form 1023 (for 501(c)(3)
corporations) or Form 1024 (for other exempt organizations) with the IRS. The laws and
regulations governing tax exemption and the process of obtaining tax exempt status are highly
complex. Consultation with an experienced and knowledgeable tax attorney or other tax
advisor is strongly recommended when a nonprofit corporation is considering applying for tax
exempt status.

3.7 Florida Benefit and Social Purpose Corporations

3.7.1 Introduction
Traditionally, the corporate form has, above all, required that corporations work in the best
interest of their shareholders, and corporations have been vulnerable to shareholder lawsuits if
they did otherwise. However, a growing trend has emerged allowing corporations to form as
“Benefit” or “Social Purpose” corporations.
Florida is one of three states that allow for “Social Purpose” corporations, which are for-profit
entities that enable the corporation, instead of maximizing shareholder profit, to consider social
or environmental issues. A “Benefit Corporation”, which is allowed in 30 states and the District
of Columbia, is a similar organization that is formed for a “general public benefit”.

3.7.2 Formation
Both Social Purpose Corporations and Benefit Corporations are formed by the same rules as
those of general Florida Corporations. In addition to the requirements of formation of a Florida
Corporation, both Social Purpose Corporations and Benefit Corporations must specify certain
other information with regard to their election.

The Articles of Incorporation of a Special Purpose Corporation must set forth one or more
specific public benefits of the corporation in addition to its purpose under general corporate
law. A “public benefit” is defined as one that has a positive effect (or the minimization of
negative effects), taken on a whole, on the environment or one or more categories of persons
or entities, other than shareholders in their capacity as shareholders. The statute lays out
certain examples public benefits, such as: (i) providing low-income or underserved individuals
or communities with beneficial products or services, (ii) promoting economic opportunity for
individuals or communities beyond the creation of jobs in the normal course of business, (iii)
protecting or restoring the environment, (iv) improving human health, (v) promoting the arts,
sciences, or advancement of knowledge, and (vi) increasing the flow of capital to entities that
have as their stated purpose the provision of a benefit to society or the environment.

A Benefit Corporation has the purpose of creating general corporate public benefit. The
Articles of Incorporation of a Benefit Corporation “may identify one or more specific public
benefits as its purpose in addition to the general public benefit”. The statute lays out an

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