A board governance issue that should be a priority for all not-for-profits in Canada right now, is CNCA compliance.
The Canada Not-for-Profit Corporations Act (CNCA), which was brought into force October 17, 2011, affects all federal non-profit corporations under the current Canada Corporations Act (CCA). Federal non-profits have 3 years to transition from the CCA to the CNCA for October 16, 2014, otherwise Industry Canada will remove them as a federal non-profit. After the 3 years of transition, all of the federal non-profits will be governed by the new act.
If you are provincially involved in the province of Ontario, you fall under a slightly different act. The Ontario Not-for-Profit Corporations Act (ONCA) 2010, affects almost all Ontario corporations under the Ontario Corporations Act (OCA) and will most likely come into effect January 1, 2014. At end of the 3 years from when the ONCA comes into force, the letters patent, by-laws and special resolutions will be deemed to have been amended to conform with the requirements of the new Act if the not-for-profit has yet to follow suit.
Boy, this sounds like a lot of time, right?
However, if you have to deal with the Canadian Revenue Agency (CRA) approvals, multiple stakeholders, time to deal with your board members, then you should probably be starting to make the transition now.
We now have less than 18 months to fully comply with all of these changes.
A corporation is required to keep certain records at its registered office or at another location in Canada chosen by its board of directors.
Make sure you have the following documents handy:
- All articles of the corporation (e.g. Articles of Incorporation, Articles of Continuance, Articles of Amalgamation) with their by-laws and their amendments
- Minutes of the regular board of directors’ and committees of members’ meetings
- Any resolutions of members and committees of members
- A directors’ register showing: The name, e-mail and residential address of each director. Please note that if the director has consented to receiving information and/or documents electronically, that agreement must be included along with the date on which each person named in the register became a director and the date on which each person named in the register ceased to be a director
- An officers’ register showing: The name, e-mail and residential address of each officer. Again it is important to note that if the officer has consented to receiving information and/or documents electronically, that agreement must be included along with the date on which each person named in the register became an officer and the date on which each person named in the register ceased to be an officer.
In addition to the list, the corporation must prepare and maintain minutes of each meeting and resolutions adopted by the directors and committee of members.
The corporation must also prepare and maintain adequate accounting records.
The CNCA does not require that such accounting records be available for review by members, except in the case of financial statements.
In addition to having your corporate and accounting records available and up to date, you might consider the following items to discuss with your board and/or the management of the charity sooner rather than later.
The time to have all this ready is coming fast.
- Check out your letters patent (articles of incorporation).
- Do you have copies of letters patent, supplementary letters patent and by-laws? Do you have a minutes book? Is it up to date?
- Are objects up to date and relevant? Do they cover all of your current activities? If not, consider updating your objects. If you are a registered charity, you may need to ask the CRA for pre-approval. This can take months and they will need to receive both objects and a detailed description of activities for them (the CRA) to review. You need to be careful and precise with these objects, otherwise they may be considered vague and/or broad and not charitable.
- Is your governance structure appropriate? If not, what do you want? Is it a “working board,” “policy board,” “fundraising board,” or a dysfunctional board?
- By-laws – Are there any particular features of your by-law that need to be kept for the new by-law? Generally it is best to start with a new clean by-law under a new act and modify as required.
- Members – Do you know who your members are? (This is not board members!) Members are, for example, shareholders in a for profit company. Does the organization require more than one membership class? If so, what attributes will each membership class have (i.e. name, vote, etc.)? Are you aware of new member rights and voting by class in some cases with even non-voting members voting?
- Current up to date list of all directors with their residential addresses, occupations, e-mail addresses, and telephone numbers.
- Current list of officers – e.g. Chair, President, Secretary, Treasurer etc.
- Office Addresses – Registered or head office, mailing address etc.
- Are you up to date in corporate filings? If not, you may want to do arrears in filings
- Annual meeting – When is the organization’s annual general meeting held? Does the organization wish to obtain membership approval at the annual general meeting? Or does it wish to have another special general meeting to approve the corporate changes necessary?
You don’t want to rush and/or take undue risks, do you?
Time requirements will vary depending on your board schedule and leadership workload, but overall, I suggest for you to make sure you have the continuance document and the new bylaws at the annual general meeting which, as a suggestion, is NOT the last meeting of members before the deadline.
I have worked with a handful of charities who are currently in this process.
It needs your attention and it needs it now!
Is your Not-For-Profit Board working on CNCA compliance yet? Have you encountered any challenges yet in the transition from CCA? Is there any learning you’d be prepared to share with others? Please let us know in the comments below.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]