Tweet

Overview of the Canada Not-For-Profit Corporations Act

Guest post by: Lionel Perez

Article Overview: Recently, a new law called the Canada Not-For-Profit Corporations Act ("CNPCA") came into effect aimed at eliminating unnecessary regulation and providing flexibility to the not-for-profit sector. The new legislation modernizes the corporate governance of not-for-profit corporations by promoting accountability, transparency and efficiency. This articles highlights the important provisions within the Act that will affect non-profit corporations.

Overview of the Canada Not-For-Profit Corporations Act

Recently, a new law called the Canada Not-For-Profit Corporations Act ("CNPCA") came into effect aimed at eliminating unnecessary regulation and providing flexibility to the not-for-profit sector. The new legislation modernizes the corporate governance of not-for-profit corporations by promoting accountability, transparency and efficiency.

The Act in its entirety is lengthy and detailed so not-for-profits will have up to 3 years to transition into compliance. Below is a list of some of the Act’s more important provisions that may affect you and your not-for-profit.

Incorporation:

The process of incorporation has become more streamlined under the new Act making it faster and more efficient. Instead of submitting the letters patent and by-laws for review, incorporations now occur “as of right” upon submission of the signed articles of incorporation.

By-laws:

Before the Act was implemented Industry Canada required incorporating not-for-profits to prepare and submit by-laws governing corporate matters to be reviewed and approved at the time of incorporation. Under the new legislation it is no longer necessary to draft and submit by-laws with the application for articles of incorporation. The new Act requires by-laws that deal with member issues only.

Members:

Members’ rights are enhanced under the new Act. The new rights include: the right to submit a notice of proposal to request said proposal to be discussed during a members meeting; the right to request a meeting at any time; the right for non-voting members to vote separately from voting members on matters that impact membership rights; and the right to access corporate records to monitor board compliance.

Directors:

A director’s liability and standard of care are protected by the “due diligence” defence as understood in the common law duty of acting in honest and good faith. In this legislation specific liabilities are given to directors concerning payment and distribution to members, debt obligations, and wages payable to employees. However, directors who meet the standard of care are protected from liabilities through the “due diligence” defence under the new Act.

Financial Accountability:

The Act divides not-for-profit corporations into soliciting and non-soliciting corporations, which are subject to different regulations depending on which category your not-for-profit falls under. Your gross revenues are also dependent upon the rules and requirements for reporting under the new legislation.

To facilitate the change, Industry Canada will not charge initial filing fees related to transitioning from the CCA to the NFP Act.

Related Articles
  Taxation of Non-Resident Franchisors in Canada
  What You Didn’t Know About The Canadian SBL Government Small Business Financing Program
  Network Marketing Business Canada: A Place to Start a Business
  If Things Are So Bad Why Is a Canadian ABL Facility Business Line Of Credit So Good ? How Asset based Lenders Work
  Instant Financing Access To Canadian Equipment Leasing Company Solutions !
  How To Get A Canadian Business Loan For Franchise Funding – Solid Franchising Lending Tips
  How Charlie Sheen and I Discovered How Financing a Franchise Works – A Canadian Franchise Lending Loan Business Story !
  Factoring In Canada – Invoice to Cash Conversion – Benefit of Alternative Financing
  Equipment Leasing – Canadian Financing Solutions
  A Receivable Finance Working Capital Loan Facility Financing . Explained . Finally! 6 Things You Need To Know About Invoice Finance
  3 Ways To Supercharge Access To Business Lines of Credit And Asset Loans
  Factoring Financing – Best Accounts Receivable Financing Solutions for Canadian Firms
  Factoring Financing Canada – What is the best program?
  Why The Canada Government Small Business loan Is Your Best Bet For Start Up Financing
  How to Finance A Canadian Franchise – Franchise Financing and Lending in Canada
  Small Business Fuels the Economy
  Asset Based Lines Of Credit – Canadian Solutions
  Lease Financing Canada – Canadian Asset Financing Solutions
  A Common Sense Way To Choose Canadian Business Leasing Companies For Equipment Loans – A Lease & Loan Alternative
  How can my Canadian Company get a SR & ED Tax Credit Loan – Can SR ED’s be financed?

Article Tags: bylaws, canada, canada notforprofit corporations act, cca, cnpca, corporate governance, directors, due diligence, financial accountability, incorporation, industry canada, legislation, members, nfp, nonprofit, notforprofit, regulation



Related Forum Posts
Accessing the Canadian Market - Leo, an idea that came to mind is try to align yourself with Hispanic Organizations in Canada. This will build your credibility within communities and get more referrals. Not sure if you plan on being based in Canada or operate your business from Columbia but either way being in the web development arena allows you to work from anywhere. You can also search for opportunities originating from Canada thru elance.com, getafreelancer.com, freelance.com or rentacoder.com
Re: Introducing a US franshise to a Canadian market - [quote="BuzzAroundBooks":1l00q6iy]Hi Everyone, If there was a franchise you liked and located exclusively in the U.S., how likely would you be able to introduce the first one in a new market like Canada? How open are franchisors to this sort of idea? Has anyone heard how this was done in the past?[/quote:1l00q6iy] US franchisors are really open to "export" their concept to Canada for 2 main reasons: the proximity and the culture: Canada is just a few hours away from any US city and both cultures are very similar. I am actually reading stats on this subject as I write and about 80% of american franchises tat go international go to Canada first.
Retired Executives - Hello everyone. Does anyone know where I could be in contact with retired executive? Reason I ask is because I am in seek of a mentor to assist me with my business and I am having a hard time finding a mentor in Canada. It seems like executives in the US and Europe are lot more helpful than in Canada, as I have contacted a few individuals in Canada and they have either been rude or simply did not reply back to my e-mail. Does anyone know where I can find some retired executives, as I might have a better luck with them? Thanks!
Partner with them - Welcome to the Group TMR, Some ideas of people you can partner with for the Custom Napkins: - Wedding Planners - Photographers - Annual General Meetings for Corporations - Pageants - Hotels - Elite Restaurants - Elite Spas
Import Hairdryer to Canada - Hi I want to import hairdryer from Italy to Canada. I am looking for information about it because I don’t know what exactly I have to do to import this product to Canada. What do I need to do to import this product to Canada?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Leading from Authenticity is a Beautiful Thing

Let's Skip the Offshore Horror Stories

SEO Gurus, Software and Ebooks

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.