Recently, the BC government became the first province in Canada to pass legislation for the adoption of a new type of corporation under the Business Corporations Act. Businesses will be allowed to incorporate as benefit companies - businesses committed to pursuing social and environmental goals.
Any BC company can become a benefit corporation by amending its notice of articles and its articles through a special resolution of the shareholders. The notice of articles must include the following statement:
This company is a benefit company and, as such, is committed to conducting its business in a responsible and sustainable manner and promoting one or more public benefits.
Additionally, the articles must include a commitment to conduct business in a "responsible and sustainable manner" and promote "public benefits" that must be specified. "Public benefit" is defined as a positive effect that includes an effect of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological nature. "Responsible and sustainable manner" is defined as a manner of conducting business that takes into account the well-being of persons affected by the company’s operations and endeavours to use a fair and proportionate share of available environmental, social and economic resources and capacities.
Directors and officers, in exercising their fiduciary duties, are required to balance the pursuit of the corporation's specified public benefits with the interests of the company.
On an annual basis, benefit corporations will be required to publish a benefit report disclosing:
- how the company conducted business in a responsible and sustainable manner and promoted the public benefits specified in its articles
- the directors’ assessment, measured against a third-party standard, of the company's performance in delivering on its social commitments
For more details and background information on Bill M209, please see "B.C. Benefit Corporation Update" by Miller Thomson LLP (May 16, 2019).
For information and resources on insurance and risk management for your business, please contact a CapriCMW Risk Advisor.
