B.C. paves the way for community contributions companies.

• Date: 01 July 2012
• Author: Broder, Peter

This May Royal Assent was given in British Columbia to the first Canadian legislation permitting establishment of an innovative new type of corporate entity, the Community Contributions Company (CCC). The new entity differs both from traditional non-share capital corporations and cooperative corporations, which have until now been the principal corporate vehicles for undertaking work with a defining societal (i.e. primarily non-economic) purpose in Canada.

Unlike non-share or cooperative corporations, which have members, a CCC can have shareholders. As well, the structure provides for potential payment of dividends. Any such payments, however, would be at odds with section 149(1)(1) of the federal Income Tax Act as currently worded. Section 149(1)(1) is the federal legislative provision under which a wide range of non-charitable organizations are granted exemption from tax on their income. The section affords status based on an entity being establishing and operated exclusively for a purpose or purposes other than profit, and precludes income being payable to or otherwise made available for the personal benefit of any proprietor, member or shareholder. CCCs are, therefore, at present considered for-profit companies.

The provisions for CCCs are embedded in the province's Business Corporations Act and were enacted under the B.C.'s Finance Statutes Amendment Act, 2012 (Bill 23), so the entities are...