The time is up; the October 17, 2014 deadline to continue under
the Canada Not-for-profit Corporations Act ("CNCA") has
now passed. As we have written several times in this blog (for
example,
here and
here), Corporations Canada established the October 17, 2014
deadline for all not-for-profit corporations ("NFP")
incorporated under the Canada Corporations Act to file for
continuance under the CNCA. Corporations Canada assumes that all
NFPs that failed to transition under the CNCA by the deadline are
inactive and will be automatically dissolved.
You may be asking: my NFP missed the deadline, has it now been
dissolved? Fortunately, no, your NFP has not been dissolved yet;
however, Corporations Canada is now taking steps to dissolve these
NFPs.
As a first step, Corporations Canada is issuing a "Pending
Dissolution Notice" to these NFPs that have not transitioned
under the CNCA. The Pending Dissolution Notices are being sent out
in phases, beginning with NFPs that are delinquent in their annual
filings. So, if your NFP is up-to-date with its annual filings,
then its Pending Dissolution Notice is not in the mail yet.
If your NFP has received a Pending Dissolution Notice, you still
have time, but the clock is really ticking now. Your NFP will have
120 days from the date of the Pending Dissolution Notice to
continue under the CNCA. Failure to continue within this period
will result in automatic dissolution. The effects of automatic
dissolution can be serious. The debts and liabilities of your NFP
will have to be settled and all remaining assets will be
distributed in the manner specified in the letters patent,
supplementary letters patent, or by-laws. If your NFP is a
registered charity under the Income Tax Act (Canada), then it may
lose its registered charity status and be subject to negative tax
consequences as a result; therefore, it is imperative that you
begin the continuance process immediately upon receipt of a Pending
Dissolution Notice.
If your NFP has not received a Pending Dissolution Notice yet, we
strongly recommend beginning the continuance process as soon as
possible to ensure there is enough time to complete all of the
necessary organizational matters.
If you have questions about the Pending Dissolution Notice or
continuance under the CNCA, please do not hesitate to contact any
lawyer from our Charities and Not-For-Profit Group and we will be
happy to guide you through the continuance process.
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.