The new Canada Not-for-Profit Corporations Act came into force on October 17, 2011. Not-for-profit corporations incorporated under Part II of the Canada Corporations Act are required to make the transition to the new legislation by October 17, 2014.
• Virtually all existing federal not-for-profit corporations are incorporated under Part II of the Canada Corporations Act.
• This Act has not been significantly amended since 1917 and does not reflect modern standards regarding corporate operations and corporate governance.
• The current Act governs more than 19,000 diverse not-for-profit organizations, including 7,800 registered charities. All of which will be impacted by the new Act.
• The Canada Not-for-Profit Corporations Act benefits not-for-profit corporations by providing:
- A clear set of procedural rules.
- Less red tape since Corporations Canada will no longer review and approve by-laws.
- More flexibility on making fundamental changes, such as amalgamations, which were not permitted under the old Act.
- A more objective standard for directors in carrying out their duties and responsibilities and a due diligence defence, which will reassure individuals who decide to sit on a board of directors.