Every now and then I see my office neighbour Nick Pasquino
running off to an annual general meeting ("AGM").
He says that he regularly attends AGMs and is often reminding
not-for-profit organizations about the rules governing such
meetings. He also says that it isn't surprising for an
organization to easily go offside of the rules. I asked Nick
to provide a reminder on some of these rules.
Question: What's the first thing a
not-for-profit organization should do when it comes to
Nick: It should
determine when the AGM will occur and diarize it. It's
easy to let the date slip by. There are rules imposed
by the relevant law applicable to the organization. For
example, federal non-share capital corporations are
typically requiredto hold AGMs within 6
months of the fiscal year end, and no more than 15 months from the
Question: Do certain people need to attend the
are the people that attend AGMs. In some cases organizations
will have voting and non-voting members, and some groups or classes
of members will be entitled to notice while others won't.
Check your letters patent / articles / by-laws to determine
what members must get invited to attend.
Question: What if the required people do not
attend the AGM?
typically a minimum number of members required to call a meeting to
order. This is called "quorum". Unless you
meet quorum, you legally can't conduct any business and need to
adjourn until you get a sufficient number of members
Question: Is there another aspect of AGMs
that can go wrong?
Nick: Yes, there
are a number of other aspects that can go wrong, but the last one I
will mention is what can be discussed at AGMs. As everyone
knows, organizations must send out advanced notice of the meeting
to all members, so people are aware of the meeting and show up.
What people sometimes don't realize is that the notice
must adequately describe all business that will come before the
meeting. This is because members decide whether or not they
are going to attend based on reviewing the notice to see what
business will be discussed at the meeting. It follows,
therefore, that the only business that can be discussed at the
meeting is what is in the notice because raising other business
without notice would be prejudicial to members who are not at the
meeting. Many not-for-profit organizations find themselves in
hot water from time to time because they allow members to raise
other business from the floor which is not legally valid because of
insufficient notice. So be careful!
There you have it – a few things to be
aware of in terms of your next AGM.
Pursuant to several recent legislative amendments and enactments, Ontario corporations holding a legal or beneficial interest in real property in Ontario are now subject to more onerous record-keeping requirements.
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