Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)
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Assented to 2009-06-23
Canada Not-for-profit Corporations Act
S.C. 2009, c. 23
Assented to 2009-06-23
An Act respecting not-for-profit corporations and certain other corporations
SUMMARY
This enactment establishes a framework for the governance of not-for-profit corporations and other corporations without share capital, mainly based on the Canada Business Corporations Act.
The enactment replaces the “letters patent” system of incorporation by an “as of right” system of incorporation. The current requirement for ministerial review of letters patent and by-laws prior to incorporation is replaced by the granting of incorporation upon the sending of required information and payment of a fee.
The enactment provides for modern corporate governance standards, including the rights, powers, duties and liabilities of directors and officers, along with related defences, and financial accountability and disclosure requirements.
The enactment sets out the capacity and powers of a corporation as a natural person, including its right to buy and sell property, make investments, borrow funds and issue debt obligations.
The enactment sets out the rights of members, including the right to vote at a meeting of members, call a special meeting of members, advance proposals for consideration at meetings of members and access corporate records.
The enactment provides requirements for financial review by a public accountant and financial disclosure based on whether a corporation has solicited funds and its level of annual revenue.
The enactment gives the Director powers of administration, including the power to make inquiries related to compliance and to access key corporate documents such as financial statements and membership lists.
The enactment includes remedies for members and other interested persons to address the conduct of a corporation that is oppressive or unfairly prejudicial to or unfairly disregards the interests of any creditor, director, officer or member.
The enactment provides procedures for the amalgamation, continuance, liquidation and dissolution of a corporation and other fundamental corporate changes. The continuance provisions govern the continuance of bodies incorporated under other Acts and provide a power for the Governor in Council to require a federal body corporate without share capital to apply for continuance under the enactment or be dissolved.
The enactment modernizes the legal regime that applies to corporations without share capital created by special Acts of Parliament by providing that those corporations are natural persons, requiring the holding of an annual meeting and the sending of an annual return, and regulating a change of a corporation’s name and its dissolution.
The enactment gives corporations with share capital created by special Acts of Parliament and subject to Part IV of the Canada Corporations Act six months to apply for continuance under the Canada Business Corporations Act or be dissolved.
The enactment makes a number of consequential amendments to other federal Acts. It provides for a phased repeal of the Canada Corporations Act as corporations cease being subject to the Parts of that Act.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Marginal note:Short title
1. This Act may be cited as the Canada Not-for-profit Corporations Act.
PART 1INTERPRETATION AND APPLICATION
Interpretation
Marginal note:Definitions
2. (1) The following definitions apply in this Act.
“activities”
« activité »
“activities” includes any conduct of a corporation to further its purpose and any business carried on by a body corporate, but does not include the affairs of a body corporate.
“affairs”
« affaires internes »
“affairs” means the relationships among a corporation, its affiliates and the directors, officers, shareholders or members of those bodies corporate.
“articles”
« statuts »
“articles” means original or restated articles of incorporation or articles of amendment, amalgamation, continuance, reorganization, arrangement, dissolution or revival.
“body corporate”
« personne morale »
“body corporate” includes a company or other organization with legal personality wherever or however incorporated.
“corporation”
« organisation »
“corporation” means a body corporate incorporated or continued under this Act and not discontinued under this Act.
“court”
« tribunal »
“court” means
(a) in Newfoundland and Labrador and Prince Edward Island, the trial division of the Supreme Court of the province;
(b) in Ontario, the Superior Court of Justice;
(c) in Nova Scotia and British Columbia, the Supreme Court of the province;
(d) in Manitoba, Saskatchewan, Alberta and New Brunswick, the Court of Queen’s Bench for the province;
(e) in Quebec, the Superior Court of the province; and
(f) in Yukon and the Northwest Territories, the Supreme Court of the territory, and in Nunavut, the Nunavut Court of Justice.
“creditor”
« créancier »
“creditor” includes a debt obligation holder.
“debt obligation”
« titre de créance »
“debt obligation” means a bond, debenture, note or other evidence of indebtedness or guarantee of a corporation, whether secured or unsecured.
“Director”
« directeur »
“Director” means an individual appointed under section 281.
“director”
« administrateur »
“director” means an individual occupying the position of director by whatever name called.
“entity”
« entité »
“entity” means a body corporate, a partnership, a trust, a joint venture or an unincorporated association or organization.
“incorporator”
« fondateur »
“incorporator” means a person who signs articles of incorporation.
“issuer”
« émetteur »
“issuer” means a corporation that is required by this Act to maintain a debt obligations register.
“officer”
« dirigeant »
“officer” means an individual appointed as an officer under section 142, the chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer, the comptroller, the general counsel, the general manager or a managing director of a corporation, or any other individual who performs functions for a corporation similar to those normally performed by an individual occupying any of those offices.
“ordinary resolution”
« ordinaire »
“ordinary resolution” means a resolution passed by a majority of the votes cast on that resolution.
“person”
« personne »
“person” means an individual or entity.
“personal representative”
« représentant personnel »
“personal representative” means a person who stands in place of and represents another person, including a trustee, an executor, an administrator, a receiver, an agent, a mandatary, a liquidator of a succession, a guardian, a tutor, a curator or a legal counsel.
“prescribed”
Version anglaise seulement“prescribed” means prescribed by the regulations.
“public accountant”
« expert-comptable »
“public accountant”, in respect of a corporation, means the public accountant appointed for the corporation under paragraph 127(1)(e) or subsection 181(1) or 186(1) or who fills a vacancy under subsection 184(2) or 185(1).
“send”
« envoyer »
“send” includes deliver.
“series”
« série »
“series” means a division of a class of debt obligations.
“soliciting corporation”
« organisation ayant recours à la sollicitation »
“soliciting corporation” means a corporation that is referred to in subsection (5.1).
“special resolution”
« extraordinaire »
“special resolution” means a resolution passed by a majority of not less than two thirds of the votes cast on that resolution.
“unanimous member agreement”
« convention unanime des membres »
“unanimous member agreement” means an agreement described in subsection 170(1) or a declaration of a member described in subsection 170(2).
Marginal note:Affiliated bodies corporate
(2) For the purposes of this Act,
(a) one body corporate is the affiliate of another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person; and
(b) if two bodies corporate are affiliates of the same body corporate at the same time, they are deemed to be affiliates of each other.
Marginal note:Control
(3) For the purposes of this Act, a body corporate is controlled by a person or by two or more bodies corporate if
(a) shares or memberships of the body corporate to which are attached more than 50 per cent of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person or by or for the benefit of those bodies corporate; and
(b) the votes attached to those shares or memberships are sufficient, if exercised, to elect a majority of the directors of the body corporate.
Marginal note:Holding body corporate
(4) A body corporate is the holding body corporate of another if that other body corporate is its subsidiary.
Marginal note:Subsidiary body corporate
(5) A body corporate is a subsidiary of another body corporate if
(a) it is controlled by
(i) that other body corporate,
(ii) that other body corporate and one or more bodies corporate each of which is controlled by that other body corporate, or
(iii) two or more bodies corporate each of which is controlled by that other body corporate; or
(b) it is a subsidiary of a body corporate that is itself a subsidiary of that other body corporate.
Marginal note:Soliciting corporation
(5.1) A corporation becomes a soliciting corporation for a prescribed duration from the prescribed date, if it received, during the prescribed period, income in excess of the prescribed amount in the form of
(a) donations or gifts or, in Quebec, gifts or legacies of money or other property requested from any person who is not
(i) a member, director, officer or employee of the corporation at the time of the request,
(ii) the spouse of a person referred to in subparagraph (i) or an individual who is cohabiting with that person in a conjugal relationship, having so cohabited for a period of at least one year, or
(iii) a child, parent, brother, sister, grandparent, uncle, aunt, nephew or niece of a person referred to in subparagraph (i) or of the spouse or individual referred to in subparagraph (ii);
(b) grants or similar financial assistance received from the federal government or a provincial or municipal government, or an agency of such a government; or
(c) donations or gifts or, in Quebec, gifts or legacies of money or other property from a corporation or other entity that has, during the prescribed period, received income in excess of the prescribed amount in the form of donations, gifts or legacies referred to in paragraph (a) or grants or similar financial assistance referred to in paragraph (b).
Marginal note:Application to be deemed non-soliciting
(6) On the application of a corporation, the Director may decide that the corporation is, for the purposes of this Act, to be considered as not being — or not having been — a soliciting corporation if the Director is satisfied that the determination would not be prejudicial to the public interest.
Application
Marginal note:Application of Act
3. (1) This Act applies to every corporation and, to the extent provided for in Part 19, to bodies corporate without share capital incorporated by a special Act of Parliament.
Marginal note:Certain Acts do not apply
(2) The following do not apply to a corporation:
(a) the Canada Business Corporations Act;
(b) the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970; and
(c) the Winding-up and Restructuring Act.
Marginal note:Limitations on business that may be carried on
(3) No corporation shall carry on the business of
(a) a bank;
(b) an association to which the Cooperative Credit Associations Act applies;
(c) a company or society to which the Insurance Companies Act applies; or
(d) a company to which the Trust and Loan Companies Act applies.
Marginal note:Limitation — granting degrees or regulating activities
(4) Incorporation or continuance under this Act does not confer any authority on a corporation to carry on activities as a degree-granting educational institution or to regulate any activity, including a profession or trade.
Purpose
Marginal note:Purpose
4. The purpose of this Act is to allow the incorporation or continuance of bodies corporate as corporations without share capital, including certain bodies corporate incorporated or continued under various other Acts of Parliament, for the purposes of carrying on legal activities and to impose obligations on certain bodies corporate without share capital incorporated by a special Act of Parliament.
Designation of Minister
Marginal note:Power of Governor in Council
5. The Governor in Council may designate any member of the Queen’s Privy Council for Canada to be the Minister for the purposes of this Act.
PART 2INCORPORATION
Marginal note:Incorporators
6. (1) One or more individuals or bodies corporate may incorporate a corporation by signing articles of incorporation and complying with section 8.
Marginal note:Individuals
(2) No individual may incorporate a corporation under subsection (1) if that individual
(a) is less than 18 years of age;
(b) has been declared incapable by a court in Canada or in another country; or
(c) has the status of a bankrupt.
Marginal note:Articles of incorporation
7. (1) Articles of incorporation shall follow the form that the Director fixes and shall set out, in respect of the proposed corporation,
(a) the name of the corporation;
(b) the province where the registered office is to be situated;
(c) the classes, or regional or other groups, of members that the corporation is authorized to establish and, if there are two or more classes or groups, any voting rights attaching to each of those classes or groups;
(d) the number of directors or the minimum and maximum number of directors;
(e) any restrictions on the activities that the corporation may carry on;
(f) a statement of the purpose of the corporation; and
(g) a statement concerning the distribution of property remaining on liquidation after the discharge of any liabilities of the corporation.
Marginal note:Other required provisions
(2) Articles of incorporation shall set out, in respect of the proposed corporation, any provision required by any other Act of Parliament to be set out in the articles.
Marginal note:Additional provisions in articles
(3) The articles may set out any provisions that may be set out in the by-laws.
Marginal note:Equivalency
(3.1) Any requirement under this Act to set out a provision in the by-laws is deemed met by setting out the provision in the articles.
Marginal note:Special majorities
(4) Subject to subsection (5), if the articles or a unanimous member agreement requires a greater number of votes of directors or members than that required by this Act to effect any action, the provisions of the articles or of the unanimous member agreement prevail.
Marginal note:Removal of directors
(5) The articles may not require a greater number of votes of members to remove a director than the number required by section 130.
Marginal note:Delivery of articles of incorporation
8. One of the incorporators shall send to the Director articles of incorporation and the documents required by sections 20 and 128.
Marginal note:Certificate of incorporation
9. On receipt of articles of incorporation, the Director shall issue a certificate of incorporation in accordance with section 276.
Marginal note:Effect of certificate
10. A corporation comes into existence on the date shown in the certificate of incorporation.
Marginal note:Alternate name
11. (1) Subject to subsection 13(1), the name of a corporation may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets any prescribed criteria. The corporation may use and may be legally designated by any such form.
Marginal note:Alternate name outside Canada
(2) Subject to subsection 13(1), a corporation may, for use outside Canada, set out its name in its articles in any language form and it may use and may be legally designated by any such form outside Canada.
Marginal note:Publication of name
(3) A corporation shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the corporation.
Marginal note:Other name
(4) Subject to subsections (3) and 13(1), a corporation may carry on activities under or identify itself by a name other than its corporate name.
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