In response to COVID-19 the Ministry of Finance has extended the effective date of the transparency register requirements to October 1, 2020.
What is a benefit company?
A benefit company is a for-profit company that commits to conducting its business in a responsible and sustainable way. It must also promote one or more public benefits.
Benefit companies choose what type of public benefit they want to promote. Public benefits must have a positive effect for a group of people (other than business shareholders), communities, organizations, or the environment. The benefits could include any of the following activities:
How is a benefit company different?
The company rules in the Business Corporations Act apply to benefit companies, along with a few new rules.
A benefit company must:
- Have a “benefit statement” in its notice of articles
- State its public benefits and its commitments to promote those public benefits and to conduct business in a responsible and sustainable manner in its articles. This is called a “benefit provision”
- Publish an annual benefit report and post it on its website (if it has one)
Directors of a benefit company must:
- Balance their duty to act in the best interests of company with their new duties to conduct business in a responsible and sustainable manner and promote the company’s specified public benefits
How can I incorporate a benefit company?
A benefit company is incorporated under the Business Corporations Act. All the regular incorporation rules apply to a benefit company, including filing the incorporation application with the registry. A benefit company must include the benefit statement in its notice of articles. It must also have the benefit provision in its articles.
An existing company can become a benefit company by altering its notice of articles to include the benefit statement. This alteration must be authorized by the company’s shareholders through a special resolution and the company must file a notice of alteration with the registry. The company must also ensure that its articles include the benefit provision.
What is a benefit report?
A benefit company must produce an annual benefit report that provides an assessment of the company’s performance against a third-party standard. A third-party standard means a standard for defining, reporting and assessing the performance of a benefit company in conducting its business in a responsible and sustainable manner and in relation to its public benefits. For example, if a benefit company chooses to promote environmental public benefits, it may have to complete a questionnaire or report on specific aspects of its activities which will be scored or evaluated to assess its performance.
A benefit company must choose a third-party standard that it will use to assess its performance in meeting its commitments to conduct its business in a responsible and sustainable manner and to promote its public benefits. A benefit company applies the assessment to itself; the third party does not perform the assessment and there is no government oversight of the assessment.
Benefit companies must keep their benefit reports at the company’s registered office where it is accessible to the public without charge. If the benefit company has a publicly accessible website, it must also post the benefit report on that website. The benefit report is not filed with the registry.
If you have any other questions about benefit companies, please contact the Ministry of Finance at firstname.lastname@example.org.