In our last newsletter we commenced a series of articles on the requirements to register in other parts of Canada if carrying on business there. Not-for-profit corporations all over Canada seem to be increasing their presence in many provinces and territories. Whether their presence is simply to provide members with a local (i.e. provincial or territorial) contact or to actively participate and raise funds in those provinces or territories, not-for-profit corporations aren't always aware that they may need to register in order to be active in that province or territory. The following information summarizes some, and by no means all, of the registration and ongoing obligations that stem from operating in jurisdictions other than the one in which the not-for-profit corporation was incorporated.
Note that federally incorporated not-for-profit corporations are not necessarily exempted from these requirements. We looked at Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Saskatchewan and Yukon in our Fall 2011 newsletter and consider the requirements in a few more jurisdictions this time.
B. JURISDICTIONAL REQUIREMENTS
A corporation may be exempted from registration requirements under the Business Corporations Act of New Brunswick if it does not carry on business for the purpose of gain. That being said, in order to be exempt, an application must be filed with the province. A corporation must register or apply for the exemption if it carries on business. Under the Business Corporation Act, a company carries on business if:
- its name appears in an advertisement in which a New Brunswick address is given for it;
- it has a resident agent, representative or warehouse in New Brunswick;
- it solicits business in New Brunswick;
- i t is the owner of an estate or a land interest in New Brunswick;
- it is licensed or registered under any New Brunswick Act entitling it to do business;
- it holds a certification of registration under the Motor Vehicle Act; or
- it holds a license under the Motor Carriage Act; or;
- it otherwise carries on business in New Brunswick.
Additionally, where the corporation's name appears in a New Brunswick telephone directory, in the absence of evidence to the contrary, it is deemed to be carrying on business in the province.
Annual returns must be filed with the province each year 30 days prior to the anniversary month of the corporation's registration in New Brunswick. Exempted corporations must still file annual returns but there is no filing fee.
If unregistered, an extra-provincial corporation (other than a federally incorporated business) is unable to commence or maintain an action or other proceeding in any court in New Brunswick in respect of any contract made in the course of carrying on business in New Brunswick while it was unregistered. However, an action may be maintained if the corporation becomes registered before the completion of the action. Carrying on business while not registered is a Category E offence under Part II of the Provincial Offences Procedures Act.
Newfoundland and Labrador
Under the Corporations Act of Newfoundland and Labrador, extra-provincial corporations are not permitted to pursue an undertaking without being registered. According to the Corporations Act, an extra-provincial corporation is carrying on an undertaking in the province where it:
- holds title to land or an interest other than by way of security in land in the province;
- maintains an office, warehouse or place of business in the province;
- is licensed or registered (or required to be) under the law of the province that entitles it to do business;
- holds a certificate of registration under the Highway Traffic Act respecting a public service vehicle; or
- carries on an undertaking in the province in another manner.
The Corporations Act further provides that listing in a telephone directory made in or for use in the province provides a rebuttable presumption that a business is conducting an undertaking in the province.
Annual filings are required by the province.
An extra-provincial corporation, other than a federal corporation, that is not registered under the Corporations Act may not maintain an action in respect of a contract made within the province in the course of carrying on an undertaking. Notwithstanding this, if the corporation becomes registered it may then maintain an action as though it had never been disabled whether or not the contract was made or the proceeding was instituted before the date the corporation was registered. Additionally, a corporation that contravenes the Corporations Act is guilty of an offence and is liable to a fine.
There is no legislative provision that specifically requires not-for-profit corporations to register under the Nova Scotia Registry of Joint Stock Companies. However, it is advisable that corporations register/incorporate in order to obtain legal status. Notably, the Nova Scotia Registry of Joint Stock Companies issues a Certificate of Incorporation which incorporates the corporation and, in a sense, registers them in Nova Scotia. Annually, the corporation is required to submit to the Registry of Joint Stock Companies the following information:
- a current list of directors;
- a copy of their most recent financial statements; and
- the annual renewal fee.
If a corporation fails to register/incorporate, it has no legal status. As such it does not have the right to own real property.
Prince Edward Island
Although the Extra-Provincial Corporations Registrations Act of Prince Edward Island does not specifically mention not-for-profit corporations, the broad wording of the legislation suggests that such corporations should register within 30 days of commencing to carry on business. An extra-provincial corporation is deemed to be carrying on business if:
- its name, or any name under which it carries on business, is listed in a telephone directory for any part of the province;
- its name, or any name under which it carries on business, appears or is announced in any advertisement in which an address in the province is given for the extra-provincial corporation;
- it has a resident agent or representative or a warehouse, office or place of business in the province;
- it solicits business in the province;
- it is licensed or registered or required to be licensed or registered under any Act the Legislature entitling it to do business; or
- it otherwise carries on business in the province.
Notably, corporations that initiate activities from outside the province but that are directed to persons within the province (e.g. mailings or phone solicitation) are, unless they are a federally incorporated corporation having its head office in Prince Edward Island, required to register.
The registrations certificate issued upon registration must be renewed on a yearly basis. An unregistered extra-provincial corporation cannot commence or maintain any legal action and is liable to a fine.
As evidenced above, there are slight variations in the registration requirements from one jurisdiction to another. However, one aspect that seems to remain constant is the liability to a fine if the jurisdictional legislation, which often includes the requirement to register, is contravened. Additionally, filing requirements also vary in terms of the information required, the fees, the name searches that must be done, etc.
As such, prior to operating in a jurisdiction other than the one in which the not-for-profit corporation was incorporated, corporations are encouraged to consider the requirements and seek legal advice to fully understand the implications at the outset and in the long run.
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.