Government Introduces New Business Designation
New and existing social enterprises now have the choice to apply for designation as a Community Interest Company.
Effective today, June 15, legislation and regulations allow businesses formed under the Companies Act to be designated as a Community Interest Company. These companies will have characteristics of both businesses and non-profits, combining entrepreneurship with a social purpose.
Social enterprises use business practices to advance health, social, environmental, cultural or other community goals. Examples include farmers' markets, used clothing banks, community-owned wind farms and businesses run by charitable organizations or employing a marginalized or disenfranchised group. They often have a buy local focus and are gaining momentum worldwide as people seek to create and support businesses that contribute to the common good.
"Community interest companies will help social enterprises build even more social, cultural and environmental value in small and large communities in every corner of Nova Scotia," said David Upton of Common Good Solutions Inc., Halifax. "The implementation of this legislation indicates a strong government commitment to building an economy that creates real companies and jobs to meet the real needs of all Nova Scotia citizens."
The legislation and regulations give social enterprises the opportunity to be designated, something they can promote to build more consumer support and grow their business.
"Social enterprises contribute to our economy and give back to communities across Nova Scotia," said Mark Furey, Minister of Service Nova Scotia. "This will in turn help foster a competitive business climate in Nova Scotia, grow our social enterprise sector and diversify our economy.
"Young entrepreneurs are increasingly drawn to the social enterprise model. By preparing more youth to be social entrepreneurs, we can leverage their creativity to drive social innovation, resulting in greater youth engagement and retention."
As a part of the application for the new designation, a company will be required to declare its community purpose and provide a community interest plan on which it will be required to report annually. A Community Interest Company will be restricted in the amount of dividends it may declare and will also be required to make its financial statements public.
The government and the ONE Nova Scotia coalition see a growing role for social enterprises in the future of Nova Scotia's economy. Supporting social enterprises is a priority as they create job opportunities and support economic growth while providing social benefits. The Department of Business is working with stakeholders to develop a strategy for the social enterprise sector.
"Social enterprise models reflect an understanding that many of the social and economic problems facing individuals and families today can best be addressed first at a community level," said Jacquelyn Scott, professor, Shannon School of Business, Cape Breton University. "Nova Scotia, along with British Columbia, is leading Canada in providing encouragement for the formation of community interest companies."