This is a follow up to our October 2012 Business Matters article.
As of July 29, 2013, you will be able to incorporate a Community Contribution Company (“C3”) in British Columbia. As a reminder, these entities are a hybrid between non-profit organizations and for-profit businesses, which must have a community and social benefit as their primary purpose. While these C3s will be allowed to make a profit, there will be restrictions on their ability to distribute such profits to their shareholders. Pursuant to the Community Contribution Company Regulation, a C3 may only declare dividends in an amount not to exceed 40% of a C3’s profit from that financial year, plus any unused dividend amount for any previous financial year. Similarly, on dissolution, only 40% of the assets of a C3 after all liabilities have been satisfied may be distributed to the shareholders and the other 60% will be distributed to a qualified entity.