VICTORIA – Companies now can register to become a Community Contribution Company (CCC or C3), a new business model for British Columbians who value a balance of social responsibility and profit, Minister of Finance Michael de Jong announced today.
Regulations for the C3 business model are now in effect. Designed to bridge the gap between for-profit businesses and non-profit enterprises, this innovative business model is the first of its kind in Canada.
This new type of hybrid business model responds to an emerging demand for socially focused investment options. C3 status signals that a company has a legal obligation to conduct business for social purposes and not purely for private gain. This obligation will help attract capital not currently accessible to the social enterprise sector by appealing to philanthropic investors who still expect some financial return.
Social enterprises can exist in many business areas and have many different objectives, including health, environmental, cultural or educational. For example, a social enterprise could provide recycling services in a community with the social objective of generating employment in collecting recyclables and applying most of the profits to a local charity.
The regulations were developed in consultation with members of the B.C. Social Innovation Council. Public consultations held in 2010 supported the idea of a new business model like the C3, and the resulting amendments were well-received by the social enterprise community.
- There are two main ways to form a C3:
- A C3 designation can be chosen at the outset on incorporation of a new company.
- A pre-existing company can become a C3 by amending its name and constitution to reflect the C3 status. This would require the unanimous consent of the company’s shareholders.
- C3s are based on a model first introduced in the United Kingdom in 2005 (Community Interest Companies or CICs).
- C3s differ from a typical private company in that they are subject to an “asset lock”. There is a strict cap on dividends that can be paid out to shareholders.
- The bulk of a C3’s profits must go toward the C3’s community purposes or be retained or transferred to a qualified entity, such as a charity.
- C3s are subject to a high level of accountability. They must have three directors and are required to publish an annual report describing their activities.
For the amendments to the Business Corporations Act: http://www.leg.bc.ca/39th4th/1st_read/gov23-1.htm