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Decision-making Thresholds under the CNCA

The Canada Not-for-profit Corporations Act provides for three different thresholds for decision-making by members:

● a decision that requires unanimous approval of the voting members (a "unanimous resolution");

● a decision that requires the approval of two-thirds of the votes cast at a meeting of members (or a resolution in writing signed by all members entitled to vote on the resolution) (called, in the Act, a "special resolution"); and

● a decision that requires the approval of a simple majority (namely 50% +1) of the votes cast at a meeting of members (or a resolution in writing signed by all members entitled to vote on the resolution) (called, in the Act, an "ordinary resolution").

What follows are the minimum approval thresholds set out in Act. Except in the case of a resolution to remove a director (which must always be by ordinary resolution), a CNCA corporation is free to increase (but not decrease) any of the approval thresholds in its articles or, in the case of a non-soliciting corporation, a unanimous member agreement ("UMA"). Thresholds cannot be increased in the by-laws.

1. Decisions Requiring a Unanimous Resolution

  • entering into a UMA (not applicable to soliciting corporations);
  • dispensing with the appointment of a public accountant (only available if a soliciting corporation's annual revenues do not exceed $50,000 or a non-soliciting corporation's annual revenues do not exceed $1 million); and
  • a resolution in writing of the members (whether the resolution would be a special or ordinary resolution if passed at a meeting of members).

2. Decisions Requiring a Special Resolution

  • amending the articles (including to increase the number of directors or minimum and maximum number of directors) except to change a corporation's number name to a verbal name;
  • approving a contract or transaction in which a director or officer has a material conflict of interest;
  • confirming, amending or repealing by-laws that set out the conditions required for being a member, the transfer of memberships, the manner of giving notice to members entitled to vote at a meeting of members and the method of voting by members not in attendance at a meeting of members;
  • terminating a UMA that does not otherwise provide for its own termination;
  • approving an amalgamation agreement;
  • approving a continuance from the Canada Corporations Act or other federal legislation to the CNCA;
  • approving a continuance to another federal statute or the laws of a province, territory or foreign jurisdiction;
  • approving a sale, lease or exchange of all or substantially all the corporation's property; and
  • approving a voluntary dissolution or liquidation of the corporation.

3. Decisions Requiring an Ordinary Resolution

  • electing directors;
  • removing one or more directors from office and filling a vacancy thus created;
  • fixing the number of directors within the range permitted in the articles;
  • confirming, amending or repealing by-laws (other than those requiring amendment by special resolution);
  • requiring an audit instead of a review engagement report (where a soliciting corporation's annual revenues do not exceed $250,000 or a non-soliciting corporation's annual revenues do not exceed $1 million);
  • removing a public accountant from office and filling the vacancy thus created; and
  • generally, all decisions of members that do not require a unanimous or special resolution.

4. Board Decisions

In all other cases, corporate decisions are made by the board of directors. Except for a short list of non-delegable matters, the board can generally delegate its decision-making authority to an officer or a board committee.

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