More Reflections on Legal Structures for Community Enterprise
Richard Bridge B.A., LLB.
On December 9, 2009, the Parliamentary Standing Committee on Finance, after engaging in a
public consultation process, presented to the House of Commons in Ottawa a report entitled A
Prosperous and Sustainable Future for Canada: Needed Federal Actions.
1 One of the
recommendations in the report is: “the creation of a corporate structure for not-for-profit
organizations that would allow the issuance of share capital and other securities.”
2
This recommendation drew from submissions made to the Committee by several of Canada’s
third sector leaders, including Tim Draimin, Executive Director, Social Innovation Generation
(SiG) National, and others. They argue that Canada should build upon the recent advances in the
UK and the US that allow for the incorporation of new legal structures intended to help social or
community enterprises to flourish.
I agree with this recommendation, and have argued elsewhere that the adoption of a new hybrid
legal structure would help Canada’s law keep pace with changes in the nature of community and
commerce, and would bolster social or community enterprise.
3 By “hybrid,” I mean that it
combines elements of private benefit fundamental to the business corporation structure, with
elements of public or community benefit associated with non-profit organizations and charities.
This paper revisits the UK innovation (detail about the US variation is available in the earlier
paper linked below) and examines how a similar new Canadian legal structure would fit in
relation to the existing options: co-operatives, non-profit organizations, and business
corporations. It also briefly notes new legislative developments unfolding in some American
states.
Social or Community Enterprise:
There is no single definition of social enterprise, but this one is good