Skip to content

Client Update: Time’s Ticking: Not-for-Profit Corporations

By October 17, 2014 existing not-for-profit corporations incorporated under Part II of the Canada Corporations Act (the “Old Act”) are required to be continued under the new Canada Not-for-Profit Corporations Act (the “New Act”) or face the possibility of automatic administrative dissolution. For those corporations that are also registered charities, dissolution could mean the revocation of their registration as a charity which could result in substantial tax penalties.

 

FEATURES OF THE NEW ACT

Generally the New Act has been modernized to conform with modern business corporation statutes. The New Act now provides a clear set of rules that govern the internal affairs of corporations under its jurisdiction including clear and coherent statements of member rights, rules regarding members and directors meetings, and provides specific rules regarding fundamental changes (amalgamation, continuance, liquidation and dissolution). The New Act also provides a benefit to those individuals who are acting as directors in that it sets out a due diligence defense for certain liability resulting from director negligence.

There is additional oversight under the New Act including the requirement to submit all bylaws and amendments thereto to Industry Canada. There are also financial reporting requirements under the New Act. For non-soliciting corporations with annual gross revenues in excess of $1,000,000 or for soliciting corporations with annual gross revenues in excess of $250,000, a full annual audit must be conducted. For those soliciting corporations with revenues between $50,000 and $250,000, an audit is required unless the members resolve that a review engagement is sufficient. For non-soliciting corporations with gross annual revenues under $1,000,000 or for soliciting corporations with revenues under $50,000, a review engagement is required unless the members resolve that one is not required. These records must be made available to members, directors and officers of the corporation and to Industry Canada. Soliciting corporations must make their financial records publically available.

 

PROCESS OF TRANSITION

Many of our clients may be involved as a director or in an advisory capacity for a not-for-profit corporation incorporated under the Old Act. We would strongly encourage corporations who have not started the continuance process under the New Act should act now to ensure the process is completed in time. For those corporations incorporated under the Old Act which are also registered charities, additional steps are required – particularly if the charity is looking to amend its purposes as part of the transition for which pre-approval from Canada Revenue Agency can take upwards of two to three months before the continuance process can be started under the New Act.

If your corporation has not yet transitioned, it is a fairly simplified process under the New Act. The corporation must replace its letters patent, supplementary letters patent (if any) and by laws with new charter documents which are in compliance with the New Act. The corporation must submit articles of continuance, forms confirming the initial registered office and first directors of the corporation and a name search confirmation. Bylaws which are in compliance with the New Act can either be submitted as part of the initial package or within twelve months of continuance following approval by the members.

Following successful transition under the New Act, all registered charities (including those who have not amended its purposes and even those who have obtained pre-approval from the Canada Revenue Agency) must submit the certificate of continuance, articles of continuance, various filing forms as well as a copy of the current bylaws and statement of current purposes to the Canada Revenue Agency.

The foregoing is intended for general information only and is not intended as legal advice. If you have any questions, contact one of our Business Lawyers.

SHARE

Archive

Search Archive


 
 

Hiring the “Right” Employee

February 24, 2016

By Lisa Gallivan Employees can be your biggest asset, if you hire the right people. This can often be one of the biggest decisions that you make as a business owner or employer. The “right” employee…

Read More

Bye, Bye Canadian P.I.?: What Apple’s fight against the FBI means for the protection of Personal Information in Canada

February 23, 2016

By Burtley Francis and Kathleen Leighton Order Up: Apple, P.I. Recently, the public safety versus personal privacy debate has been brought to main headlines. Apple is facing a court order (available here) requiring the company to assist the FBI in the investigation of…

Read More

Client Update: Outlook for the 2016 Proxy Season

February 12, 2016

In preparing for the 2016 proxy season, you should be aware of some regulatory changes and institutional investor guidance that may impact disclosure to and interactions with your shareholders. This update highlights what is new…

Read More

Left Sharks and Copy Cats: The Super Bowl’s Impact on Protecting a Brand

February 5, 2016

By Burtley Francis and Michael MacIsaac You remember Left Shark… The Super Bowl is a lot of things to a lot of people and is arguably the most anticipated event of the year that is not a holiday…

Read More

The Labour Relations of First Nations’ Fisheries: Who gets to decide?

February 2, 2016

By Jennifer Taylor Summary The Canada Industrial Relations Board recently held that it had no jurisdiction as a federal board to certify a bargaining unit comprised of fisheries employees of the Waycobah First Nation. The decision…

Read More

Can an employer prohibit tattoos and piercings?

January 21, 2016

By Peter McLellan, QC In the 1970s the issue for employers was long hair and sideburns. In the 1980’s it was earrings for men. Today the employer’s concerns are with tattoos and facial piercings. What are…

Read More

Settling for it: Two new NS decisions on settlement agreements and releases

January 15, 2016

By Jennifer Taylor Introduction It sounds simple: Two disputing parties, hoping to resolve their disagreement without drawn-out court proceedings, will mutually agree to a settlement on clear terms; release each other from all claims; and move…

Read More

Labour and Employment Legislative Update 2015

December 23, 2015

2015 ends with changes in workplace laws that our region’s employers will want to be aware of moving into 2016. Some legislation has been proclaimed and is in force, some has passed and will be…

Read More

Client Update: Make Your List and Check it Twice: IRAC Sends a Holiday Reminder to Municipalities

December 23, 2015

The Island Regulatory and Appeals Commission (the “Commission”) has issued a holiday reminder to municipalities in Prince Edward Island about the importance of preparation, accuracy, and transparency when making decisions related to land use and…

Read More

Nova Scotia Government Introduces Public Services Sustainability (2015) Act

December 16, 2015

By Brian G. Johnston, QC On the same day that the Nova Scotia government announced its projected deficit had ballooned to $241 million, it also introduced Bill 148, the Public Services Sustainability (2015) Act (“Act”). The stated purposes…

Read More

Search Archive


Scroll To Top