Benefit Corporations in the Peruvian Legal Ecosystem

Abstract

In 2020, Peru became the third country in Latin America to adopt the benefit corporation model into its legal system, following its neighbors, Colombia and Ecuador, in proposing a legal model to identify purpose-driven companies. The Peruvian “sociedad de beneficio e interés colectivo” or a BIC company has not only been influenced by the U.S. Model Benefit Corporation Legislation but also by its legal exports, such as the Italian società benefit, the Colombian BIC law, and the Argentinean BIC draft bill. The Peruvian benefit corporation legal ecosystem consists of several newly approved legal documents, such as the law itself, its regulation, and the related reporting guidelines. The law allows the corporate models regulated by the Corporate Act to include three main features: (i) a specific social and environmental purpose in the bylaws; (ii) higher duties and protection for managers and directors; and (iii) transparency and reporting requirements. Additionally, the law grants supervisory power to the Peruvian Competition Authority and oversight of the legal ecosystem to the Peruvian Ministry of Industry. The regulations and reporting guidelines detail these three main features, particularly regarding the companies’ purpose and the transparency and reporting requirements. Only a year after the introduction of the BIC legal ecosystem in Peru, there is an on-going public-private effort to implement the law widely for corporations to actively contribute to the Sustainable Development Goals.