|A new regime for Canadian not-for-profit organizations|
|by Barbro Stalbecker-Pountney, LL.B., LL.M.|
|on December 04, 2012|
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What these changes may mean for you
At the bottom of the list of most volunteer organizations, often operating on a shoestring, is concern about the legislation that deals with governance. After all, there have been virtually no changes in over fifty years. But, new developments have now taken place at both federal and provincial levels and we need to take notice. Below are some of the highlights of the legislation.
Federally, the Canada Not-for-Profit Corporations Act received Royal Assent on June 23, 2009 and is in force. The Ontario Not-for-Profit Corporations Act received Royal Assent on October 25, 2010 and is scheduled to come into force in July 13, 2012. Both acts are based on business corporation models and will have impact on all not-for-profit corporations.
The ongoing concern as to how money donated by the public is being spent is reflected in the creation of new obligations for what is called a “soliciting corporation” under the federal Act, and “public benefit corporation” under the Ontario Act. Corporations falling under those definitions will need to pay attention to stricter financial reporting requirements, new membership rights, and various restrictions on directors and distribution of assets on dissolution.
The rules in both federal and provincial acts apply by default and cover such areas as the qualifications of directors and officers, their appointment, removal and remuneration. Statutory rules cover the conditions for and granting of membership, in addition to termination and member discipline, as well as member remedies against corporate directors. Rules also deal with how meetings are to be held, voting by proxy, mailed-in ballot and telephonic or other electronic communication facility for voting. Members elect directors and non-members may vote where there are changes that affect their rights, for example, sale of substantially all of the assets, certain amendments to the articles or by-laws, etc.