The new Canada Not-for-profit Corporations Act ("CNCA") sets out specific qualifications for directors of corporations incorporated or continued under the CNCA.

Directors must be:

  1. individuals (not corporations or other persons);
  2. at least 18 years old;
  3. not bankrupt; and
  4. not declared incapable by a court in Canada or in another country.  
In addition to these statutory qualifications, the CNCA allows a corporation to specify additional qualifications for directors in the corporation's by-laws.  For example, the CNCA does not require a director to be a member of the corporation or a Canadian resident, but the corporation's by-laws can add these requirements.
Registered charities should also be aware of the "ineligible individual" provisions under the Income Tax Act (Canada) which enable the Canada Revenue Agency ("CRA") to revoke the charitable status of charities that have ineligible individuals acting as directors.  Directors are ineligible individuals if they have been:
  1. found guilty of a "relevant criminal offence" (criminal offences that relate to financial dishonesty or are otherwise relevant to the operation of a charity, including fraud, tax evasion and theft) that has not been pardoned;
  2. found guilty of a non-criminal "relevant offence" (offences that relate to financial dishonesty or are otherwise relevant to the operation of a charity, including violations of fundraising, consumer protection or securities legislation) within the preceding five years;
  3. a director of a charity during a period in which the charity engaged in conduct that was a serious breach of the requirements for registration for which the charity had its registration revoked within the preceding five years; or
  4. a promoter of a gifting arrangement or other tax shelter in which a charity participated and the registration of the charity has been revoked within the preceding five years.
In sum, a not-for-profit corporation should identify basic information about its directors, consider having a screening policy or background checks in place to ensure that its directors are qualified and add any additional relevant qualifications for directors to its by-laws.  In addition, registered charities should be aware of the ineligibility provisions.

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