The Campbell Liberals are mulling changes to the Business Corporations Act that would clear the way for the emergence of a new “hybrid” company focused on “community interest.”
Investor returns would be capped but companies in the sector would have a measure of sustainability in their business models which would presumably offset a lack of opportunity for windfall profits.
“Community interest companies would be incorporated with all the flexibility and certainty of regular companies, but under legislation that ensures they primarily benefit the community,” says a British Columbia government news release this week.
The model for this initiative comes from the United Kingdom, which has seen 4,200 social enterprise companies emerge since 2005 in response to amendments to its Companies Act.
Businesses could include family services, recycling programs, education programs – with limited investor returns that would distinguish them from the non-profits you typically find in these sectors.
A switch to this designation would be “irrevocable” according to the release, and the only way to end hybrid status would be to break up the company – and even then assets could not be distributed to shareholders.
Organizations that would have an interest in this model could include, and this is speculation at this point, the Vancouver Foundation, B.C. Centre for Social Enterprise, and the Vancity Community Foundation.
No special tax breaks are contemplated – and with the British Columbia small business tax dropping to zero next year, why would they?
The B.C. finance ministry has posted a ‘community interest company consultation’ link on its website, www.gov.bc.ca/fin and has set a December 1 deadline for responses.
(No disrespect to Finance Minister Colin Hansen, or Surrey-White Rock MLA Gordon Hogg who is the primary advocate for this idea, but I have to ask – am I alone in thinking this sounds more like an initiative of the B.C. New Democratic Party than one of the B.C. Liberal Party?)
By SCOTT SIMPSON 21 OCT 2010
from The Vancouver Sun