In 2009, the federal Not-For-Profit Corporations Act (NFP Act) received Royal Assent. We wrote about the NFP Actin a previous newsletter and there is now more information about the nature of the Act and the timing of its implementation.
With perhaps one or two exceptions, national sport organizations in Canada are incorporated under Part II of the Canada Corporations Act (CCA). The NFP Act replaces Part II of the CCA and all previously created corporations will continue under the NFP Act.
This means national sport organizations, incorporated under Part II of the CCA, will simply transition to operate under the NFP Act, but there will be a few important things these organizations will be required to do. The NFP Act is expected to come into force in 2011 or 2012 - so there is no rush to do anything immediately. After the Act is implemented, all corporations will be required to obtain a certificate of compliance with the NFP Act, and this will entail careful review and revisions of bylaws. Failure to obtain the certificate may result in the dissolution of the corporation. These certificates and more information will be forthcoming from Industry Canada.
Here are a few highlights of what we can expect with the NFP Act:
Interestingly, the government of Ontario has also introduced new legislation to govern non-profit societies. Although not yet passed into law, Bill 65 (Ontario Not-For-Profit Corporations Act) will create a regime in Ontario not unlike that which exists in British Columbia, Alberta and Saskatchewan, whereby societies are created and regulated by a special statute, separate from business corporations. Both the NFP Act and Bill 65 are indicative of government recognizing the unique needs and significant economic contributions of the not-for-profit sector in Canada.
Originally published: Centre for Sport and Law Newsletter (2010) Vol. 6(3)