The Canada Not-for-profit Corporations Act
(the Act) came into force on October 17, 2011. The Act was highly
anticipated by the not-for-profit sector, but according to sources
at Industry Canada, less than 10% of federal not-for-profit
corporations (NFPs) have continued under the new Act. An NFP that
is not continued under the new Act by October 17, 2014 may be
In order to continue under the Act,
each NFP will be required to submit articles of continuance, which
are required to contain certain prescribed information, including
the NFP's name, the classes and voting rights of members, the
number of directors (or a minimum and maximum number of directors),
and a statement of purpose. Once the articles of continuance have
been prepared, they will need to be approved by the NFP's
members before submitting them to Corporations Canada. In addition,
the articles of continuance of a registered charity must be
reviewed by the Canada Revenue Agency (CRA) if a charity is
changing its objects (now purposes). In such instances, we
recommend that such review takes place prior to submission to
Corporations Canada in order to avoid having to amend the articles
of continuance (and the possibility of requiring further member
approval) if the CRA is dissatisfied with the purposes set out in
While an NFP is preparing its articles
of continuance, it should also draft a new by-law that complies
with, and takes advantage of the benefits of, the Act. NFPs should
be aware that the Act contains some provisions that must be
included in the by-laws; in addition, certain provisions of the Act
will apply by default if not addressed in the NFP's by-laws or
Given that most NFPs hold only one
members' meeting each year, NFPs that have not commenced their
governance review should do so as soon as possible in order to meet
the October 17, 2014 deadline.
We have already assisted a wide variety
of NFPs, including private and public foundations, professional
associations and national and international charitable
organizations to continue under the new Act.
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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