Saskatchewan non-profits and member-based organizations need to be aware of critical changes to the laws concerning these types of entities. If you are involved with a non-profit, a charity, a member-based organization, or any community organization, this post provides extremely important information about your legal setup.
On March 12, 2023, The Non-profit Corporations Act, 2022 (the "New Act") and the Non-profit Corporations Regulations, 2022 (the "New Regulations") came into force. The New Act replaced The Non-profit Corporations Act, 1995 (the "Old Act") and the New Regulations replaced The Non-profit Corporations Regulations, 1997 (the "Old Regulations").
Key features of the New Act and the New Regulations include:
Use of Electronic Documents / Signatures and Means of Communication
The New Act clarified that resolutions and other corporate documents can be executed by electronic signature.
The New Act also clarified that attendance and participation in meetings, including voting, can now be facilitated by means of telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.
This provides peace of mind to board members of Saskatchewan non-profits that documents can be signed electronically, and that they can attend and vote at meetings by electronic means.
Names of Corporations
The New Act added a provision that states a corporation can select a name that includes words in Cree, Dené or any other prescribed language from the New Regulations. The New Regulations add that a corporation can select a name that includes words in Michif, Lakota, Nakota, Dakota or Saulteaux.
This will permit Indigenous non-profits in Saskatchewan to honour their language and culture.
Annual Contribution
The New Act added a section that states the directors may require members to make an annual contribution or pay annual dues.
This clarifies the rights of Saskatchewan non-profits and member-based organizations to require their members to make annual contributions or pay annual dues.
Qualifications of Directors
The New Act removed the requirement from the Old Act that at least one director of a corporation must reside in Saskatchewan and that 25% of directors must be Canadian residents.
This is important for non-profits whose board members may not reside in Saskatchewan, and for international organizations registered as non-profits in Saskatchewan.
Meeting of Directors
The New Act removed the requirement from the Old Act that directors of a charitable corporation cannot transact business at a meeting of directors unless a majority of directors present were Canadian residents.
This is important for non-profits whose board members may not reside in Canada, and for international organizations registered as non-profits in Saskatchewan.
Delegation of a Managing Director
The New Act removed the requirement from the Old Act that a managing director must be a Canadian resident.
This is important for non-profits whose board members may not reside in Canada, and for international organizations registered as non-profits in Saskatchewan.
Duty of Care of Directors and Officers
The New Act added another layer of protection for directors and officers by stating that directors and officers satisfied their duty of care if they relied in good faith on a report or advice of an officer or employee of the corporation, if it is reasonable in the circumstances to rely on the report or advice.
This underscores the importance of executive directors reporting regularly to their boards. If boards are receiving reports and scrutinizing the work of their executive director, then this will provide better liability coverage for the board members.
Financial Statements
The New Act changed the requirement for the directors to deliver financial statements to the members from 15 days to 21 days before the annual meeting. The New Act also states that the financial statements provided to members ahead of the annual meeting must be dated as of a date that is within 6 months of the annual meeting. The Old Act required the financial statements to be dated as of a date that was within 4 months of the annual meeting.
Providing current financial statements to members ahead of the annual general meeting is one of the most important duties of a board. It is extremely important for boards to be aware of these amendments.
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.
