by Kelly R. Eskew, J.D.
Clinical Associate Professor
Department of Business Law & Ethics
Kelley School of Business, Indiana University
1309 East Tenth Street
Bloomington, IN 47405

This year, the Indiana General Assembly offered up Senate Bill 101 (the Religious Freedom Restoration Act or “RFRA”), [1] a law ostensibly intended to protect Hoosiers from having to violate their religious principles, but widely viewed as a discriminatory response to the Seventh Circuit’s ruling in 2014 that struck down the state’s prohibition on same-sex marriage. [2] RFRA raced through the Republican supermajority legislature and was quickly made law by Governor Mike Pence, one of the nation’s most conservative governors. [3] But soon after, Pence signed an amendment that not only affirmed the rights of gays and lesbians, but also those who face discrimination on the basis of gender identity. [4]

Business and grassroots advocacy leaders collaborated to try to defeat RFRA. [5] None expected to succeed, [6] but what they achieved surprised everyone – and this collaboration is not an outlier. Businesses worked with social justice advocates on marriage equality, which is now the law throughout the country. [7] In fact, businesses often engage in such initiatives. [8] Businesses have corporate social responsibility (“CSR”) programs of varying complexity that not only make charitable donations through their foundations, but also pioneer environmental projects and work to strength communities and schools. [9] CSR is also part of the syllabus in business ethics classes, which many business schools now require students to take. [10] In other words, social responsibility has moved from fad to policy. Businesses are also creating their own social movements that mirror the principles shared by grassroots advocates in areas such as poverty eradication, health-care access, and sustainability. [11]

So when and why does the American business community align itself with grassroots social movements? And is there a roadmap that shows each how to leverage the other to achieve shared goals? A fully fleshed response to these questions is beyond the scope of this post, but the RFRA experience suggests some answers.

by Hannah Kaufman Joseph & B.J. Brinkerhoff
Katz Korin P.C.
334 N. Senate Avenue
Indianapolis, Indiana 46204

Everyone knows that corporations and limited liability companies (“LLCs”) are governed by statutory requirements that outline how such entities must organize and govern themselves, and subsequently record those activities. [1] Oftentimes, the focus on these statutory requirements centers on whether a company has properly maintained itself as an independent organization entitled to limited liability protection from creditors, thereby insulating the owners, members, and/or shareholders from claims. [2] Thus, the applicable statutes serve as an important benchmark to determine whether a corporation or LLC has properly observed “corporate formalities.” If the organization generally complies with the statute’s specifications for the filing and upkeep of corporate records (and does not engage in behavior that would allow creditors to pierce the corporate veil), the protection afforded a company by its jurisdiction of domicile will hold tight against third parties. [3] But statutes that apply to formal business entities serve an often-disregarded, yet critical second purpose: to set forth the rights and duties the owners owe one another and the company. [4]