The Government of British Columbia intends to amend the Business Corporations Act (“BCBCA”) to include a new type of company – a benefit company. This amendment is set to take place on June 30, 2020.
A benefit company is a for-profit corporation that dedicates itself to conducting responsible and sustainable business and to promoting a public benefit(s). A public benefit includes any activity that positively impacts a group outside of the corporation’s shareholders. For example, an educational group, the local community, the environment, or a charitable organization. A list of possible ‘public benefit’ activities can be found here.
Benefit companies are still governed by the BCBCA but, in addition to the existing BCBCA rules, they must follow three new rules. A benefit company must i) have a “benefit statement” in its notice of articles ii) include a “benefit provision” in its articles that outlines the public benefit(s) it is committed to promoting and how it intends to conduct its business responsibly and sustainably and iii) publish a benefit report annually (and upload it on its website if applicable). The annual benefit report must provide an assessment of the company’s performance in conducting its business responsibly and sustainably and with regard to its public benefit(s). This assessment is measured against an independent third party standard. The benefit company is responsible for choosing the third party standard and for administering the assessment.
All of the BCBCA rules still apply for incorporating a benefit company and an existing company may become a benefit company by modifying its notice of articles to include a benefit statement and benefit provision. Benefit company directors must balance their new duties, associated with their benefit company, and their duty to act in the best interests of the company (see the Business Corporations Amendment Act for specific rules).
For more information, or if you are interested in incorporating a benefit company or modifying the notice of articles of an existing company to meet the requirements of a benefit company, please contact a member of the Owen Bird Law Corporation Corporate Services Group.
– Prepared by Tasha Lorenzen-Ewing