October 2018 Archives

Ontario Court Denies Standing to Bring Oppression Proceedings against Charitable Corporation

In The Campaign for the Inclusion of People who are Deaf and Hard of Hearing v. Canadian Hearing Society (released September 2018), Justice Wilton-Siegel of the Ontario Superior Court of Justice refused to find that the corporate applicant was a proper person to bring oppression proceedings against a federally incorporated charitable society and stayed the application of the individual applicants in favour of arbitration.

Overview of the Financial Statement of an NFP Corporation

Directors of a corporation incorporated or continued under the Canada Not-for-profit Corporations Act must present comparative financial statements to the members at every annual meeting. The Canada Not-for-profit Corporations Regulations specify these annual financial statements in further detail. What follows is a summary of the content each of these financial statements.

Court-Ordered Liquidation

When the Canada Not-for-profit Corporations Act came into force in 2011, it carried forward the statutory power of the court to order the liquidation of a not-for-profit corporation but, at the same time, introduced a much wider range of remedies open to the court through the oppression remedy. Given the less draconian alternatives under the oppression remedy, courts will generally be reluctant to order the liquidation of an NFP corporation, except as a last resort.

Separate Class Voting Rights under the CNCA

The Canada Not-for-profit Corporations Act allows each corporation to set out in its articles the classes, or regional or other groups of members (for convenience, called "classes" in this article). If there are two or more classes, the articles must set out the voting rights attached to each class of members. The default rule is that each member is entitled to one vote. However, the articles can provide that a class of member has only those voting rights mandated by the Act. The articles can expand the voting rights or restrictions of a class but are limited in the extent to which they can curtail voting rights.

Fundamental Changes under the CNCA

The Canada Not-for-profit Corporations Act provides that the members must approve, by special resolution (which requires the approval of at least two-thirds of the members who cast votes) certain changes or transactions. In some cases, the changes require the approval of each separate class of members - even if the membership class is otherwise non-voting.

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