Corporate legal aspects of impact investments in British Columbia
University of British Columbia
Master of Laws - LLM
The historically grown distinction between for-profit corporations and non-profit organizations has caused a demand for new hybrid corporate forms that allow for the combination of the pursuit of a social or ecological goal and the generation of profits at the same time. These hybrid corporate forms are intended, among others, to attract social responsible investments in general and particularly impact investments, with which an investor aims to solve a social or ecological problem while making a profit. British Columbia has led the path in Canada by implementing the community contribution company (or C3 or CCC). This thesis argues that from a pure corporate legal point of view, a CCC may provide the highest and most enduring social impact, but depending on the interests of the investor, another corporate form might be more suitable for impact investments in British Columbia. After some general remarks on impact investing and the consideration of stakeholders’ interests by directors, the thesis first will provide a detailed analysis of the corporate legal features of the CCC. The discussion will show that most provisions governing the CCC intend to achieve two things, i.e., first that the CCC is managed in accordance with its community purpose and second, in particular through restrictions on dividends and asset transfers (asset lock provisions), to protect it from being stripped of its assets. The comparison with other corporate forms following the outline of the CCC’s features intends to draw a conclusion with regard to the suitability for impact investments. While some of the restrictions applicable to a CCC as well as the requirement to produce a community contribution report could be desirable from an impact investor’s point of view, others might be less advantageous or even disadvantageous. Before concluding the thesis with a summary of the findings as well as some thoughts about further research in this area, potential amendments to the CCC framework in order to increase its suitability for impact investments will be discussed. In addition, some high level thoughts on further incentives for social financing will be provided.
Attribution-NonCommercial-NoDerivs 2.5 Canada
Law, Faculty of