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Part II .

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Community Interest Companies Regulations

made under

Section 28 of the

Community Interest Companies Act

S.N.S. 2012, c. 38

N.S. Reg. 121/2016 (effective June 15, 2016)

Table of Contents

Please note: this table of contents is provided for convenience of reference and does not form part of the regulations.

Click here to go to the text of the regulations .

Citation

Definition

Designation documents prescribed

Qualified entities prescribed

Declaring dividends

Interest payments related to profits

Redeeming and purchasing own shares

Reducing share capital

Eligibility to receive distributable assets on dissolution

Community interest report

Application of

Section 4 of the Companies Act –prescribed documents

Fees

Citation

1 These regulations may be cited as the Community Interest Companies Regulations .

Definition

2 In these regulations,

“Act” means the Community Interest Companies Act .

Designation documents prescribed

(1) In this Section,

“community interest plan” means a written plan that contains all of the following for

a company or company to be incorporated that is seeking designation as a

community interest company:

(

i) a statement that it will carry on its activities for a community purpose,

(ii) a description of its community purpose and how it proposes to carry out

activities in support of that community purpose;

“person who has consented to be a director”, in relation to a company to be

incorporated, means a person who has consented to be a director in accordance with

Section 94 of the Companies Act .

(2) All of the following are prescribed as designation documents for the purposes of the

definition of “designation documents” in clause 2(1)(

f) of the Act:

(

a) a community interest plan;

(

b) a declaration that the company or company to be incorporated does not or will

not carry on activities with a political purpose;

(

c) a declaration to be signed by each director of the company or, for a company to

be incorporated, each person who has consented to be a director, that states the

following:

I, (insert name) , hereby declare that I shall exercise the powers and perform the

functions of a director of (insert name of community interest company) in accordance

with the community purpose set out in its memorandum of association and

designation documents, as required by

Section 12 of the Community Interest

Companies Act .

(3) A community interest plan and each of the declarations referred to in clauses (2)(

b) and (

c) must be signed by each director of the company or, for a company to be

incorporated, each person who has consented to be a director.

Qualified entities prescribed

4 For the purposes of the definition of “qualified entity” in clause s 2(1)(

j) of the Act, the

following entities are prescribed as qualified entities:

(

a) each of the following universities:

(

i) Acadia University,

(ii) Atlantic School of Theology,

(iii) Cape Breton University,

(iv) Dalhousie University,

(

v) Mount Saint Vincent University,

(vi) Nova Scotia College of Art and Design,

(vii) Saint Mary’s University,

(viii) St. Francis Xavier University,

(ix) University of King’s College,

(

x) Université Sainte-Anne;

(

b) the Nova Scotia Community College;

(

c) a school board within the meaning of the Education Act ;

(

d) a hospital within the meaning of the Hospitals Act ;

(

e) a health authority within the meaning of the Health Authorities Act ;

(

f) the Nova Scotia Museum;

(

g) the Art Gallery of Nova Scotia;

(

h) a municipality within the meaning of the Municipal Government Act ;

(

i) Her Majesty the Queen in Right of Nova Scotia;

(

j) Her Majesty the Queen in Right of Canada.

Declaring dividends

(1) In this Section,

“distributable profits”, in relation to a community interest company, means its

accumulated, realized profits, so far as not previously utilized by distribution or

capitalization, less its accumulated, realized losses, so far as not previously written

off in a reduction or reorganization of capital duly made;

“exempt dividend”, in relation to a community interest company, means a dividend

declared on a share held by, or on behalf of, a qualified entity specified in the

community interest company’s memorandum of association, but does not include a

dividend declared on a share if the directors of the community interest company are

aware the share is being held in trust for a person that is not a qualified entity.

(2) In accordance with clause 15(1)(

a) of the Act, a declaration of a dividend by a

community interest company is authorized under these regulations

(

a) to the extent that the articles of association of the community interest company

permit it to declare the dividend;

(

b) if the community interest company’s members have by special resolution

approved the declaration of the dividend; and

(

c) except as provided in subsection (3) for an exempt dividend, if the declaration

of the dividend does not cause the total amount of all the dividends declared on

shares in the company for the financial year for which it is declared to exceed

the maximum aggregate dividend for that financial year, calculated in

accordance with subsection (4).

(3) Clause (2)(

c) does not apply to exempt dividends.

(4) The maximum aggregate dividend for a community interest company’s financial

year is declared when the total amount of all dividends declared on the community

interest company’s shares for that year, less the amount of any exempt dividends,

equals 40% of the community interest company’s distributable profits for that year.

Interest payments related to profits

(1) In accordance with clause 16(

a) of the Act, payment by a community interest

company, in relation to a debenture issued by the community interest company or

any of the community interest company’s other debts, of an interest rate related to the

community interest company’s profits is authorized under these regulations

(

a) to the extent that the community interest company’s articles of association

permit it to pay an interest rate that is related to its profits;

(

b) if the agreement to pay the interest was entered into by the community interest

company on or after the date it became a community interest company; and

(

c) if the interest rate does not exceed the applicable interest cap calculated in

accordance with subsections (2) to (4).

(2) The applicable interest cap is 15% of the average amount of a community interest

company’s debt, or the sum outstanding under a debenture issued by it, during the

12-month period immediately preceding the date on which the interest on that debt

or debenture becomes due.

(3) For the purposes of determining the applicable interest cap under subsection (2), the

average amount of a debt or a sum outstanding under a debenture during any 12-month period is the amount calculated using the following formula:

B = A ÷ 12

in which

B = the average amount of the debt or the sum outstanding under the debenture

during the 12-month period; and

A = the aggregate of the amount of the debt or the sum outstanding under the

debenture as at the end of each month during the 12-month period.

(4) In calculating the value of “A” in the formula set out in subsection (3),

(

a) any sums representing interest that has accrued on the debt or debenture within

the 12-month period must be excluded;

(

b) if the debt or debenture did not exist at the end of any month during the 12-month period, the amount of the debt or the sum outstanding under the

debenture as at the end of that month must be treated as being zero; and

(

c) if the amount of the debt or the sum outstanding under the debenture is not

known as at the end of any particular month, the directors of the community

interest company may substitute for the debt or the sum outstanding under the

debenture any amount or sum that they estimate to be the amount of the debt or

the sum outstanding under the debenture as at the end of that particular month.

Redeeming and purchasing own shares

7 In accordance with clause 17(

a) of the Act, payment by a community interest company to

redeem or purchase its own shares is authorized under these regulations if the amount to be

paid by the company in respect of each share does not exceed the paid-up capital of the

share.

Reducing share capital

8 In accordance with clause 17(

a) of the Act, reduction by a community interest company of

its capital attributable to shares is authorized under these regulations if

(

a) the reduction is made by extinguishing or reducing the liability of any of its

members in respect of share capital that is not paid up; or

(

b) the amount paid by the community interest company to members in paying off

paid-up share capital does not exceed the paid-up value of their respective

shares.

Eligibility to receive distributable assets on dissolution

(1) A qualified entity that meets at least 1 of the following criteria may be determined by

the Registrar under subsection 19(2) of the Act to have a community purpose similar

to that of a community interest company that is being dissolved:

(

a) the qualified entity benefits the same segment of society that benefits from the

community interest company;

(

b) the community purpose of the qualified entity is in the same general category

as the community purpose of the community interest company;

(

c) the qualified entity benefits the same community or geographical area that

benefits from the community interest company.

(2) To be designated by the Registrar under

Section 20 of the Act to receive the

distributable assets of a community interest company on the dissolution of the

company, a qualified entity must meet at least 1 of the criteria in subsection (1).

Community interest report

(1) In this Section, “community interest report” means an annual community interest

report required by

Section 21 of the Act.

(2) The prescribed period for filing a copy of a community interest report with the

Registrar under subsection 21(4) of the Act is the 90 days immediately after the

community interest company’s annual general meeting.

(3) A community interest report must contain the signatures of at least 2 of the

community interest company’s directors.

Application of

Section 4 of the Companies Act –prescribed documents

11 The financial statements filed with the Registrar under subsection 22(1) of the Act are

prescribed under clause 24(

d) of the Act as documents to which

Section 4 of the

Companies Act applies.

Fees

12 The following fees are payable to the Registrar for the following services:

Service

Fee

providing a certified copy or a photocopy of a document–1 to 10 pages

$12.45

providing a certified copy or a photocopy of a document–11 pages or more

$24.95

Legislative History

Reference Tables

Community Interest Companies

Regulations

N.S.

Reg.

121/2016

Community Interest Companies Act

Note: The information in these tables does not form part of the regulations

and is compiled by the Office of the Registrar of Regulations for reference

only.

Source Law

The current

consolidation of the Community

Interest Companies Regulations made

under the Community Interest

Companies Act includes all of the following

regulations:

N.S.

Regulation

In force

date*

How in force

Royal Gazette

Part II Issue

121/2016

Jun 15, 2016

date specified

Jun 24, 2016

The following regulations are not yet in

force and are not included in the current consolidation:

N.S.

Regulation

In force

date*

How in force

Royal Gazette

Part II Issue

*See subsection 3(6) of the Regulations

Act for rules about in force dates of regulations.

Amendments by

Provision

ad. = added

am. = amended

fc. = fee change

ra. = reassigned

rep. = repealed

rs. = repealed and substituted

Provision affected

How affected

..........................................................

Note that changes to

headings are not included in the above table.

Editorial Notes and Corrections:

Note

Effective

date

The reference in clause 4(

c) to a

school board is to be read as a reference to an education entity as defined

in the Education Act , in accordance

with

Section 52 of the Education Reform

(2018) Act , S.N.S. 2018, c. 1.

Apr 1, 2018

Repealed and Superseded:

N.S.

Regulation

Title

In force

date

Repealed

date

Note: Only regulations that are specifically repealed and replaced appear in

this table. It may not reflect the

entire history of regulations on this subject matter.