All charities and non-profit organizations incorporated under Part II of the Canada Corporations Act need to actively 'continue' to the new Canada Not-for-profit Corporations Act if they wish to stay in business.
The new Act came into force on October 17, 2011 with a built-in transition period of three years. This means that all organizations incorporated under the old Act have until October 17, 2014 to 'continue' to the new Act. Despite the fact that we are now halfway through this transition period, the great majority of affected corporations have yet to take action.
If you are involved in running a charity or non-profit corporation, check which act it is incorporated under. If it is the old Canada Corporations Act, you need to take action right away. Failing to continue in time will lead to the government dissolving the corporation, which in the case of registered charities also means you will end up losing your charitable status.
October 2014 may seem far off, but time is shorter than you may think. The continuance process includes what can end up being a lengthy by-law review followed by approval of all the changes at a general members' meeting. If there is only one annual meeting between now and October 2014, there is little room for error. By the time 2014 comes around, there will be even less.
The continuance process involves updating the corporation's governing documents and by-laws to comply with the new law. Here are some of the major changes in the new Act that may affect your corporation:
This list is not exhaustive; these are some of the big changes, but there are many smaller details that have changed as well. The entire structure of the modern act is very different from the century-old one it has replaced.
Alexandra Tzannidakis is an associate at Drache Aptowitzer LLP, where she practices tax, corporate and charity law. Contact her through www.drache.ca.