August 7, 2013 - On July 29, 2013, the Community Contribution Company (C3, for short) became available for use in British Columbia, providing an alternative structure that balances community benefit and shareholder profit.
A C3 is a special type of business corporation that has community benefit purposes like a not-for-profit organization. While C3s can pay dividends to shareholders, they must also actively advance their community benefit purposes. The C3 brand signals to the public that a business has a legal obligation to conduct activities which benefit the public and does not operate solely for private gain. This "hybrid" structure is meant to attract investment in social enterprises and social purpose businesses by socially-conscious investors who want to help the community and realize a return on investment.
British Columbia is the first province in Canada to allow for the creation of hybrid social-purpose corporations. Nova Scotia has subsequently announced similar amendments to its legislation. BC's C3 strives to improve on a model previously introduced in the U.K.
C3s present a potential tool for existing charities, non-profits and social enterprises, as well as an opportunity for social entrepreneurs to create new community-minded businesses that provide a benefit to the public.
Bull Housser, which has been involved in the development of the C3 structure for several years, was one of the first out of the gate, with associate Michael Blatchford, assisting a client to incorporate a brand-new C3, Accelerating Social Impact CCC Ltd., a social purpose business that will assist and help develop other social enterprises and social purpose businesses.
The social enterprise section, already very strong in BC, is excited by the opportunities created by the C3. It remains to be seen how successful the C3 will be in attracting outside investment. At present, the C3 is taxable in the same way as a regular business corporation, although a special investment tax credit is being discussed. It's important to note that C3s soliciting investment from the public are subject to securities regulation.
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