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Social enterprises functioning forms

Many social businesses operate as charities or community-based businesses. Due to this, they receive tax benefits.

Separate forms of legally-mandated social enterprises are C3 and CIC (community contribution companies, community interest companies), but now they exist in only two provinces. Within these forms, there is a legal percentage that must be reinvested in a social mission.

If we talk about the C3 hybrid model, there are two basic requirements – the mandatory reinvestment of 60% of the profit on the social mission of the business and a clear definition of this mission in the company’s charter. This form is only enshrined in British Columbia law, so the C3 company can never have federal status.

There are few businesses in this form. It is much easier to choose the limited liability company (LLC) form and indicate in the charter what percentage of the profits will be invested in social initiatives (impact investing).

Most major Canadian corporations today are required to have a “social component”. They donate some of their profits to charity or invest in social startups within the company.

One of the most famous Canadian social businesses is the ETSY online portal, where they sell a wide variety of hand-made products. Eco-cafes are also popular, which use recycled paper cups and make discounts when visitors take a drink with them.

The social contribution of food establishments is also reflected in the collaboration with communities. For example, when a restaurant purchases local community foods from a community garden and thus invests in community development. Social business in Canada is often based on community support. The scheme is something like this: I bought a berry from a farmer, baked a pie, sold it to a visitor, and paid a wage to a homeless person who works as a chef or waiter.

There are also interesting startups. For example, a project to grow tomatoes on the balcony, paired with what the mobile application. He always reminds when it is necessary to water the tomatoes. The project received 1 million USD investment.