UNIFORM LAW CONFERENCE OF CANADA

For more information, p lease contact info@ulcc-chlc.ca mailto:info@ulcc-chlc.ca Uniform Law Conference of Canada Charities Project – Interim Report Hybrid Organizations [1] The concept of a company with a social mission (“CSM”) officially saw the light of day in Europe, first in Belgium in 1995 with the “société à finalité sociale” (“SFS”), in France in 2001 with the “société corporative d’intérê. [...] [2] The CSM wave hit Canada in 2010, first in British Columbia, with the appearance of “community contribution companies” (the “C3”) in Part 2.2 of the Business Corporations Act, then in 2012 in Nova Scotia with “community interest companies” (“CIC”) created by the Community Interest Company Act. [...] 3 Charities Project – Progress Report Hybrid Organizations [8] Robust CSM are those whose 1) directors have a duty to promote the corporation’s social mission, to the detriment of shareholder interests when necessary, 2) assets are locked to ensure that they are solely purposed for the well-being of the community and 3) dividend and interest payments to shareholders and lenders are capped. [...] [12] CSM legislation similar to those now enacted in British Columbia and Nova Scotia would have the following effects: • the corporation could change or abandon its social mission only by amending its articles, which would require shareholder approval in a special resolution and allow shareholders, if applicable, to exercise their right of dissent and oblige the corporation to redeem their shares. [...] The mission of a “robust CSM” is its heart, its raison d’être, that forces directors to attain that mission and guarantees investors that this mission prevails and will continue to prevail over 4 Uniform Law Conference of Canada profits.