New Act for Not-For-Profits and Charities

If you are not already aware, the federal law in Canada relating to not-for-profits (“NFP’s”) and charities changed in 2011 – the Canada Not For Profit Corporations Act (the “New Act”) came into force on October 17, 2011.  All organizations created under the old federal act (Part 2 of the Canada Corporations Act) need to continue under the New Act before October 17, 2014.  Organizations that do not transition to the New Act will be considered inactive and dissolved by Industry Canada.  (Note:  If your organization is dissolved, you can apply to Industry Canada to have the organization revived pursuant to the New Act).

If you are a federal organization that has not yet taken steps to continue under the New Act, you should consider doing so as soon as possible.  Continuing under the New Act may mean amending the organization’s by-laws which requires member approval, a process which may take some time.

Ontario has also introduced new legislation for NFP’s and charities: Ontario’s Not-for-Profit Corporations Act, 2010 (the “ONFPCA”).  The ONFPCA, which is substantially similar to its federal counterpart, is scheduled to take effect in 2014 and existing NFP’s and charities organized under the existing Ontario legislation will have 3 years to continue under the ONFPCA.  Under the present draft of the legislation, unlike the federal law, organizations that do not transition to the ONFPCA within the required timelines will be deemed to have complied and provisions of the organization’s bylaws or letters patent will be considered to have been amended, as necessary, to comply with the ONFPCA.

If you have questions with respect to how the New Act or the ONFPCA affects your organization or continuing under the New Act or the ONFPCA (when it comes into force), please contact us and we would be happy to assist.

Author: Dineen Beath