What is a Benefit Company?
Beginning on June 30, 2020, BC was the first province in Canada to offer the Benefit Company option, as a legal ‘container’ for social enterprise.
This option is not to be confused with a Community Contribution Company (C3) or B Corp certification.
Amendments will be made to the province’s Business Corporations Act, which will legislate this hybrid social enterprise structure.
The latest information on this structural offering is available on this dedicated BC Ministry of Finance webpage.
A recording of the June 24th Benefit Company Information Session convened by the Ministry of Finance can be found here.
The Benefit Company is a for-profit (taxable) structure that, rather than being a separate legal entity with its own legislation, ‘rides’ the existing corporate legislation of BC, and adds some key elements, not present in a traditional company.
The BC government describes the Benefit Company as ‘a for-profit company that commits to conducting its business in a responsible and sustainable way and it must also promote one or more public benefits.’
The breadth of benefit to be chosen is very broad and enabling of most any social enterprise’s non-financial goals. This benefit can accrue to a ‘class of persons’ (other than the shareholders) or to the environment. The public benefits must be ‘baked in’ to the articles of incorporation, along with a statement that the enterprise is a Benefit Company.
An annual benefit report is required to be made available to the public on the company’s website, outlining how its unique public benefit has been expressed in the operation of the business. A generally accepted third-party standard must be used as the measuring stick for impact.
Directors of the Benefit Company are empowered to act ‘beyond’ the best interest of the business, and to ‘conduct business in a responsible and sustainable manner and promote the company’s specified public benefits.’
A Benefit Company can be incorporated ‘from scratch’, or an existing BC company can be transitioned to this structure.
To read more about the BC Benefit Company, we recommend these excellent external links:
B.C.’s new legislation on benefit companies — Osler, Hoskin & Harcourt LLP
B.C. finance minister says ‘benefit companies’ would think beyond profits — Vancouver Sun
Business with a Heart of Gold — The New BC Benefit Companies — Fasken Martineau DuMoulin LLP
B.C. Benefit Corporation Update — Miller Thomson LLP
To B or Not to B: Benefit Companies Arrive in Canada — Lawson Lundell LLP