The deadline to file for continuance under the new Canada
Not-for-profit Corporations Act (the "Act") for all
federal not-for-profit corporations incorporated under the
Canada Corporations Act was October 17, 2014. Corporations
that have not yet continued under the Act are at risk of
dissolution by Corporations Canada.
Notice of Dissolution
Although dissolution is not automatic, Corporations Canada is
actively taking steps to dissolve non-compliant corporations. In
fact, notices of dissolution have already been issued, and will
continue to be sent to non-compliant corporations at the valid head
office address on the corporate record. To avoid missing the notice
and being dissolved upon the expiration of the grace period, please
ensure a valid and current address is listed with Corporations
Upon receipt of a notice of dissolution, the corporation has a
120-day grace period to transition to the Act. Once this grace
period has expired, Corporations Canada will publish the name of
those corporations it intends to dissolve on its monthly transactions web page. For those
corporations, the online database will indicate "active -
dissolution pending (failure to transition)."
Consequences of Dissolution
The dissolution of a not-for-profit organization gives rise to
various issues, including the possibility significant tax
consequences. In particular, registered charities that have missed
the deadline run the risk of revocation of the registered charity
status by the Canada Revenue Agency, which may result in revocation
tax equal to 100% of the value of its remaining assets being
Avoidance of Dissolution
It is strongly recommended that any federally incorporated
not-for-profit corporation that has yet to obtain a certificate of
continuance from Corporations Canada, do so as soon as possible.
Although the transition time period has expired, as long as the
corporation has not been dissolved, filing for continuance can be a
simple and straightforward process with the proper guidance, even
post October 17, 2014.
This blog post was prepared with the assistance of Cassandra
Da Re, Articling Student at Dale & Lessmann LLP.
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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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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