Canada’s non-profit sector is grappling with the implications of a new federal law that gives members the equivalent of shareholder rights – creating avenues for more accountability and engagement but also concern over legal expenses and unintended consequences.
As the Conservative government examines new ways of funding charities and non-profits, the sector is looking to comply with a major legislative change approved in 2009 called the Canada Not-For-Profit Corporations Act that recently came into force on Oct. 17.
Though the bill – described by the government as a long-needed replacement for the 1917 Canada Corporations Act that governed non-profits – passed through Parliament with little controversy, some are warning in could have a major impact and risks forcing the dissolution of many small non-profits.
The law requires all federally registered non-profits to file new governing bylaws and other legal documents to Industry Canada by Oct. 17, 2014. It also gives members of non-profits new rights that are akin to the rights of shareholders of private corporations, including the ability to force motions for a vote, demand certain documents or trigger legal proceedings.
As the Conservative government examines new ways of funding charities and non-profits, the sector is looking to comply with a major legislative change approved in 2009 called the Canada Not-For-Profit Corporations Act that recently came into force on Oct. 17.
Though the bill – described by the government as a long-needed replacement for the 1917 Canada Corporations Act that governed non-profits – passed through Parliament with little controversy, some are warning in could have a major impact and risks forcing the dissolution of many small non-profits.
The law requires all federally registered non-profits to file new governing bylaws and other legal documents to Industry Canada by Oct. 17, 2014. It also gives members of non-profits new rights that are akin to the rights of shareholders of private corporations, including the ability to force motions for a vote, demand certain documents or trigger legal proceedings.