December 2009 edition (pg.4), we informed you of the passing of
a new statute, the Canada Not-for-Profit Corporations Act
(the "Act"), by the federal Parliament,
to replace Part II of the Canada Corporations Act (the
"CCA"). Since then, the necessary
regulations have been enacted and the Act along with the
regulations have been put into force on October 17, 2011 by a
To take advantage of this new and more modern legislation,
not-for-profit organizations ("NFPs")
subject to Part II of the CCA must be continued under the Act
because it does not automatically apply to them. NFPs that do not
make this transition by October 17, 2014 at the latest will be
The first step in the process of continuing an NFP is to review
its letters patent and supplementary letters patent; a copy can be
obtained from Corporations Canada. Then, articles of continuance
must be prepared in the form provided by Corporations Canada. They
contain information comparable to the information contained in the
articles of incorporation of a corporation, but with a few
additions specific to the regime governing NFPs, like the statement
of the purpose of the corporation in which the objects of the
organization must be described, and the statement concerning the
distribution of the property remaining at the time of liquidation
in which it must be clearly stated how such distribution will be
made. An NFP may take the opportunity during the course of the
transition to change its name and may even use a designating number
provided, however, that the number assigned by Corporations Canada
is followed by the word "Canada" and the term
"Association", "Centre", "Foundation"
or "Institute". If an NFP has the status of registered
charity ("RC"), it is strongly
recommended to consult the Charities Directorate at the time of the
transition process, to avoid having to file amendments afterwards
or, even worse, compromising its tax status as an RC.
The by-laws of the NFP must also be reviewed to determine
whether they are compatible with the provisions of the Act and be
amended, if necessary. It is imperative that the by-laws, as
provided under the Act, contain:
the conditions for being a member of the NFP; and
the rules respecting the giving of notice to meetings of the
In addition, the by-laws can modify certain rules set out in the
Act. Indeed, it affords an NFP a certain flexibility to adapt those
rules to its own reality.
A meeting of the members must be then called and held in
accordance with the rules of the CCA and the current by-laws of the
NFP, in order to approve the articles of continuance. During that
meeting, the current general by-laws may be repealed and replaced
by new by-laws that will come into force on the date of
continuance. The articles of continuance and the by-laws must be
approved by a special majority (2/3).
Once the members have given their approval, a director or
officer signs and files the articles of continuance. Following the
filing of the articles of continuance, accompanied by the form
setting out the initial address of the registered office and the
names of the members of the first board of directors, a certificate
of continuance will be issued by Corporations Canada. From then on,
the NFP is governed by the Act.
Note: There is no longer a need to have the by-laws approved by
the Minister of Industry, but they must be filed within the twelve
(12) months following their approval by the members.
NFPs subject to the Act respecting the legal publicity of
enterprises (Quebec) shall complete the transition process by
notifying the enterprise registrar of their continuance by filing
an updating declaration.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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