The British Columbia legislature is in the process of making
significant changes to the BC Business Corporations Act
that, if adopted, will provide a new corporate vehicle for social
enterprise operations. This bulletin focuses on the most notable
The Business Corporations Act ("BCA")
On March 5, 2012, the Minister of Finance introduced Bill 23,
the Finance Statutes Amendment Act, 2012 ("Bill
23") for a first reading.
Bill 23 proposes changes to the BCA, which, if adopted,
will create a new hybrid company structure designed for social
enterprise, called the Community Contribution Company
("C3"), which combines socially beneficial purposes with
a restricted ability to distribute profits to shareholders. The C3
is the first hybrid structure in Canada specifically designed for
C3s will be structured to combine benefits to the community and
limited investor returns within the context of a traditional
for-profit company. They will have the ability to attract capital
while simultaneously ensuring that community benefit takes
precedence. C3s will not be tax exempt.
C3s have three main differentiating features from traditional
for-profit corporations under the BCA:
1. C3s will be obliged to devote a portion of their
profits to community purposes, which are determined at the
time of incorporation.
2. C3s will have restrictions on their ability to
distribute profits. Dividends and other forms of investor
returns will be restricted in a manner to be set by Regulation. C3s
will also be subject to an "asset lock" if the company is
dissolved, such that distributions of capital to investors will be
3. C3s will be subject to greater public
accountability. Each C3 will be required to publish an
annual report detailing its community benefit spending. In
addition, any member of the public will be able to request access
to a copy of a C3's financial statements.
The C3 structure responds to an emerging demand for socially
focused investment options and can help foster social enterprise
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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