Canada Not-For-Profit Corporations Act – Planning Continuance

Janvier 2012

( Disponible en anglais seulement )

As we have reported previously in this Newsletter, corporations that are currently incorporated federally under the Canada Corporations Act (CCA) must continue under the Canada Not-For-Profit Corporations Act (CNCA) by October 17, 2014.

Non-share capital corporations not yet continued under the CNCA can still operate under the CCA, the corporation’s current letters patent, supplementary letters patent and bylaws.  Such corporations may still make by-law changes and may apply for supplementary letters patent under the CCA.   Thus, a non-share corporation that wishes to make changes to its structure still has the power to do so before continuing into the CNCA.   For example, a corporation may wish to change the structure of its membership classes before non-voting members have rights to vote or to avoid separate class votes under the CNCA, as discussed in our January 2010 Newsletter.

If a corporation needs changes to its governing documents because its objects or by-laws are outdated, then transitioning sooner under the CNCA may make sense.   If the corporation wants a more modern and prescriptive legislation, then the change can be made sooner.   For example, the CNCA allows corporations to amalgamate or to continue out of the federal legislation to another jurisdiction.  The CNCA also provides directors with an objective standard of care, rather than the subjective standard the directors have under the CCA. These changes will be welcomed by some corporations.

However, if the corporation likes its current governance model and is not in need of change or does not want to change, then the corporation can remain under the CCA for a few years.

Regardless of when the corporation plans to file its continuance, it is a good idea for all corporations to begin preparing for continuance.   Directors should review the corporation’s governing documents and consider whether changes are needed or desired because of operations or the CNCA.   The corporation should ensure the list of its members and directors is up to date. The corporation needs to prepare articles of continuance.   If the corporation is a charity it should ensure its objects are charitable and consider including the provisions recommended by CRA.  The corporation must then have the articles approved by the members and directors before they are filed with the government.

The corporation must also prepare and file by-laws with the government within 12 months of continuing.  The by-laws of the corporation will have many changes because of the many differences in the CNCA.  Corporations that have a lengthy by-law may find that the new by-law is shorter because the CNCA covers many of the issues that used to be included in the CCA by-law.

The lawyers in Miller Thomson LLP’s Charities and Not-For-Profit Group can assist corporations continuing into the CNCA by providing advice about the new legislation and by preparing the necessary documents to effect the continuance.

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