In July, Corporations Canada (CC) will begin to administratively dissolve not-for-profit corporations that have not filed an annual return for 3 years.
CC could dissolve a not-for-profit after only 1 year of non-filing (see s 222(1) of the Canada Not-for-Profit Corporations Act), but its policy is to only dissolve those not-for-profits that haven’t filed an annual return for 3 years .
Federally Incorporated Charities Only
This applies to charities incorporated under the Canada Not-for-profit Corporations Act. It does not apply to charities that are incorporated under provincial legislation or operating as a charitable trust.
Annual Return is NOT the same as T3010
The annual return is a corporate law filing and is separate from any Canada Revenue Agency filings. It is not the same as a T3010 Charity Information Return, nor is it a tax return.
An annual return must be filed every year, within 60 days following the corporation’s anniversary date. It costs $12 and is filed through CC’s Online Filing Centre.
The return includes the following information:
- Corporate name and number
- Date of last annual meeting
- Corporation type – soliciting or non-soliciting
It is filed by a director, officer or authorized individual who has been authorized by the directors and have relevant knowledge of the corporation.
CC Dissolution Process
If a charity has not filed its annual return in 3 years, CC will send a Notice of Intent to Dissolve to those in default. The charity has 120 days from the date of the Notice to file its required annual returns.
If a charity does not file its required annual returns before the deadline, CC will issue a Certificate of Dissolution.
As CC explains, there can be “serious repercussions” of dissolution, “including not having the legal capacity to conduct activities,” and for a charity, it “could lead to the revocation of its [charitable] registration.”
What to do?
First, if your charity is incorporated, check to see whether it is provincially or federally incorporated. If provincial, this does not apply to you.
Second, if your charity is federally incorporated, check to see whether you have filled your annual return. Remember, it is separate from your T3010 and your tax return.
Third, if you’ve filed – great! If you have not filed, file!
Fourth, if you’ve neglected to file and you do receive a notice, be sure to file as soon as possible to avoid dissolution.
The content provided in this blog is for general information purposes and does not constitute legal or professional advice. Every organization’s circumstances are unique. Before acting on the basis of information contained in this blog, readers should consult with a qualified lawyer for advice specific to their situation.