Faculty Author Type

Current Faculty [Carol Liao]

Published In

Seattle University Law Review

Document Type


Publication Date



benefit corporation, B Corporation, social enterprise, corporate law, stakeholder interests, hybrid organizations, Canada


There has been much fanfare surrounding the possible implementation of a legal model of social enterprise similar to the American benefit corporation in Canada. This article points out that some of the fundamental legal characteristics of the benefit corporation are already reflected in existing Canadian corporate laws, and in some instances Canadian laws are comparatively more progressive. Directors owe fiduciary duties to the best interests of the corporation, and minority protections such as the oppression remedy oblige directors to consider non-shareholder stakeholders. Landmark judgments from Canada’s highest court have affirmed the board requirement to consider stakeholder interests, and that directors are not confined to short-term profit or share value. The Supreme Court of Canada has highlighted that directors are required “to act in the best interests of the corporation, viewed as a good corporate citizen” and “commensurate with the corporation’s duties as a responsible corporate citizen.” Canada does not need to adopt American solutions to American problems. During these formative years in Canadian corporate legal development, the nation’s legal stance must be properly understood and taken into account when establishing new legal entities for social enterprise, so as not to confuse and/or jeopardize that stance. This article will lay out the arguments against the adoption of the benefit corporation in Canada, in hopes that the debate will be laid to rest and energies will shift toward more effective reforms to producing social change through Canadian corporate laws, be they via new legal forms or not.



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