On May 14, 2012, Bill 23, Finance Statutes Amendment
Act, 2012, was passed into law in British Columbia.
Once in force, Bill 23 will amend the Business Corporations
Act (British Columbia) to allow for a new hybrid legal
structure for social enterprise, called Community Contribution
Companies ("C3s"). Bill 23 is expected to come into force
in late 2013.
C3s respond to an emerging demand for socially focused
investment options. C3s are hybrids because they combine the
flexibility and ability of a traditional for-profit business to
attract capital with the social benefit purposes of a traditional
not-for-profit entity. C3s will be able to carry on business for
the purpose of both earning profits for shareholders and pursuing a
social purpose for the community. Some of the differences between
C3s and traditional for-profit companies are as follows:
1. Community Purpose. C3s must have one or more
community purposes which are beneficial to society at large or a
segment of society that is broader than the group of persons who
are related to the C3.
2. Restrictions on Ability to Distribute
Profits. C3s will have restrictions on their ability to
distribute profits to shareholders. Restrictions on dividends and
other forms of investor returns will be set out by Regulation.
In addition, C3s will be subject to an "asset lock" on
dissolution to restrict capital distributions to shareholders.
3. Public Accountability. C3s will be subject
to a greater degree of public accountability. Each C3 must produce
financial statements and an annual community contribution report
must be prepared and posted on a publicly accessible website of the
Further detail surrounding C3s will be set out in the
This hybrid business structure was pioneered in the United
Kingdom in 2005 through the introduction of Community Interest
Corporations. The United States followed by introducing a similar
type of company called Low-Profit Limited Liability Companies.
British Columbia is the first province in Canada to introduce a
legal structure for social enterprise and is to be applauded for
leading the government policy momentum in Canada for these kinds of
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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