Are you a member or participate in a Not-For-Profit Corporation? There is a new law coming into effect, the Canada Not-For-Profit Corporations Act (the "NFP Act"). All federally incorporated not-for-profit corporations must make the transition under the new legislation by October 17, 2014. If the transition is not made by the deadline, it may result in the dissolution of your not-for-profit corporation.
The new NFP Act is more modern and flexible and the transition process allows for the occasion to be used for a wide-ranging set of changes (not just those required by the continuance). The new NFP Act allows for rules that are more customized to the needs of not-profit corporations and makes it easier for further changes to take place as Corporations Canada no longer needs to approve changes to the Bylaws.
The transition process is not complicated and includes the following steps:
- The review of your Letters Patent (or Supplementary Letters Patent, such as the case may be) and By-laws;
- The preparation of Articles of Continuance under the new NFP Act;
- *For registered Charities only, who are making changes to their objects: obtaining approval of the Articles with the Charities Directorate of the Canada Revenue Agency ("CRA");
- The creation of new By-laws;
- Obtaining Board and/or Governance Committee approval by special resolution; and
- Submitting all required documents to Corporations Canada and obtaining the certificate of continuance.
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.
