As everyone with a federally incorporated not-for-profit
organization knows by now, corporations governed by the Canada
Corporations Act ("CCA") have until October 17, 2014 to
continue under the Canada Not-for-profit Corporations Act
("CNCA"). Does that mean they will automatically
dissolve on October 18th if they fail to continue?
On its website, Corporations Canada states that all not-for-profit
corporations under the CCA must transition before October 17, 2014,
failing which they will be assumed to be inactive and will be
dissolved.
Corporations Canada has indicated, however, that dissolution will
not be immediately effective as at October 17, 2014. Rather,
this is the date that the Director under the CNCA has the authority
to dissolve corporations for not transitioning to the
CNCA. In other words, a corporation that has not
continued by October 17, 2014 will not be automatically dissolved,
but certain steps will be taken that could ultimately lead to
dissolution.
This process will include sending notices of intent to dissolve to
corporations to inform them that they have 120 days to transition
or they will be dissolved. These are referred to as
Pending Dissolution Notices. Corporations that do not respond
to these notices will be assumed to be inactive and will be
dissolved. A corporation that is dissolved will also be
able to apply for a revival under the CNCA and transition at the
same time.
We still recommend taking action to continue before the October 17,
2014 deadline, but it may be some comfort to know that a failure to
do so is not likely to lead to automatic dissolution.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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