The New Canada Not-for-Profit Corporations Act
Davis LLP Charities & Not-for-Profit Bulletin
October 17, 2011
After more than two years since it received royal assent, the new Canada Not-for-Profit Corporations Act (the “CNCA”) is in force as of October 17, 2011. The CNCA applies to all federally incorporated not-for-profit organizations and replaces the legislation under which they previously operated, Part II of the Canada Corporations Act.
Existing federal not-for-profit corporations have three years in which to transition to this new regime, failing which they will be dissolved, and they must actively take steps to effect this transition. Anyone wishing to incorporate a new not-for-profit organization during this transition period must do so under the CNCA.
The CNCA attempts to modernize the corporate governance standards applicable to federal not-for-profit corporations and to make the not-for-profit sector more accountable to the public. It makes significant changes to the way in which not-for-profit corporations are regulated. Some of the key elements of this new framework are:
As a result of the changes brought about by the CNCA, corporations will likely need to make a number of changes to their governing documents. In order to continue under the new regime, corporations should:
Although existing corporations may continue to operate under the old legislation during the next three years, we recommend starting the transition process without delay. Please contact a member of our Charities and Not-for-Profit Organizations Practice Group for further information and assistance with this transition.
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