Blog by Tim Herron.

Tim Herron is the past President and Chairman of the Board with the Starlight Children’s Foundation. He is a Certified Governance expert working with not-for-profit organizations on governance strategy and execution. Tim is an Accomplished Executive with Boardroom Metrics.

Industry Canada announced that on October 17, 2011 the new Canada Not-for-profit Corporations Act (NFP Act) came into force. Organizations currently in the process of incorporating may have to submit new forms, and organizations incorporated under the previous legislation will have three years to transition to the Not-For-Profit Act.

Boards and their members should review current by-laws and see what changes will be needed to be made in the transition period.  As it relates to directors, the Act will a more standard objective in carrying out their duties and responsibilities.

Federal not-for-profit corporations are required to transition to the NFP Act over the next three years. Until they have made the transition, the provisions of the “old legislation”, the Canada Corporations Act, Part II (CCA, Part II) will continue to apply to them. Ultimately, the old legislation will be repealed.

Industry Canada has laid out the steps needed for making the transition to the new not-for-profit act. The process will involve reviewing your current by-laws and reviewing the required information needed to adhere to the new Act. The 5 step process is as follows:

  • Review Your Letters Patent and By-laws
  • Prepare Articles
  • Create New By-laws
  • Get Board Approval
  • Submit the Paperwork

Once all of this has been submitted and accepted by the government, you will receive a Certificate of Continuance.  There is no cost for filing your documents.  Failure to do so by October 17, 2014 could cost the charity its Charitable Status and may require the charity to be dissolved.

As a Board director or officer of a charity, you are asked to carry out your duties in the best interests of the Charity.  You are asked to exercise care, diligence and skill of a reasonably prudent person in comparable business circumstances.  Being a member of a charitable Board brings with many of the same responsibilities of a regular business corporation.  Be prepared.