Deadline for CNCA Continuance Approaches! ​

THIS POST HAS BEEN WRITTEN BY GUEST AUTHOR BARRY W. BUSSEY, VP-LEGAL AFFAIRS, CCCC

Federally incorporated charities have only until October 17, 2014 to apply for a certificate of continuance under the Canada Not-for-profit Corporations Act (“CNCA”). Failure to continue may result in the corporation being dissolved. Registered charities that are dissolved will also lose their registered status with Canada Revenue Agency. That scenario will be a source of consternation for donors and charities alike. If you are a federally incorporated charity and have not yet filed your continuance, then time is of the essence! Do not delay. Review the resources below and seek legal counsel as soon as possible.

Applying for a certificate of continuance is not just a matter of submitting a form. Before submitting your documentation to Corporations Canada, you will need to obtain prior approval of members through a members meeting held in accordance with your existing bylaws. The NFP Act requires that the articles of continuance be approved by a special resolution of members, which means that the resolution must be passed by at least two-thirds of the votes cast at the meeting.

As we have explained in previous materials, you will also need to have CRA approve any changes to your corporate objects before you file your continuance. We understand from lawyers working on these files that the process is taking 75 business days at present.

If your federally incorporated charity misses the October 17 deadline, you will be sent a “Pending Dissolution Notice” informing you that the corporation has 120 days to transition. Industry Canada has noted: “Corporations that do not complete the transition before the end of the 120-day notice period will be assumed to be inactive and will be dissolved.”  Your corporation will then be listed on Corporations Canada’s online database with a status of “Active – Dissolution Pending (Failure to transition),” which may cause your supporters to be concerned about your timeline for filing your transition documents in time.

In conclusion, remember Benjamin Franklin’s words of wisdom: “You may delay, but time will not.”

Resources 

Noteworthy is provided 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.