NEW BEGINNINGS? THE CANADA NOT-FOR-PROFIT CORPORATIONS ACT
by C. Yvonne Chenier
Any time there is a policy shift or change in legislation in the area of not-for-profit law, it gives organizations an excuse to ponder whether any of the changes affect their organization. As you will read elsewhere, the Canada Not-For-Profit Corporations Act has recently become the law federally for not-for-profits who choose to organize themselves at a federal level. Organizations that were incorporated under the old legislation - the Canada Corporations Act Part II - will have to review this new legislation to see if there are any steps they have to take immediately or in the near future. However, other organizations across Canada may want to view this legislation as well to see if there is anything in it for them.
Generally there are three types of situations where a review of this "now in force" legislation is warranted:
1. The obvious situation is where an organization was incorporated under the old Canada Corporations Act Part II. They will have to review all of their documents with a view to continuing under this legislation within the time period required (three years from October 17th, 2011). There are reasons why an organization may not want to continue under this new legislation and may seek other forms of organization, perhaps in a provincial jurisdiction or elsewhere.
2. If an organization was in the process of drafting their paperwork with a view to incorporating as a federal not-for-profit corporation they will now have to complete this process under the new Act as there is no chance to create a not- for-profit corporation under the old Act anymore. These organizations that were in the process of incorporating should become very familiar with the new legislation to see if in fact it still suits their purposes for their organization. If not they will have to look at alternatives.
3. Any not-for-profit organization incorporated anywhere in Canada or operating through a trust should take some time to review this new organizational potential offered under the Canada Not-For-Profit Corporations Act. There are many features of the new Act that are not contained in provincial Acts across the country and may offer an organization, especially one who wants to operate in many provinces in Canada or internationally, a better organizational option. There may be something in it for them.
No matter what kind of organization you are, it is always prudent to review your objects, bylaws and the governing legislation that you are under from time to time. Any organization looking at continuing or incorporating under the Canada Not-For-Profit Corporations Act will have to give their bylaws a very thorough inspection, something that should be done by organizations on a regular basis anyhow. This review process may be long overdue in some organizations. And for some, may give cause for a new beginning.