Application of the CNCA to Federal Special Act Corporations

Over the years, Parliament has enacted many special Act corporations. The International Air Transport Association is a prominent example of a federal special Act corporation. But there are many others.

In most respects, the Canada Not-for-Profit Corporations Act does not apply to special Act corporations. In some cases, however, the CNCA applies, in part by reference or adoption of select provisions of the CNCA.

With some exceptions, the following provisions apply to any body corporate without share capital incorporated by special Act of Parliament and not continued under another federal Act:

Abolition of the mischievous ultra vires doctrine. Like a CNCA corporation, a special Act corporation has all of the capacity and the rights, powers and privileges of an individual of full capacity.

Canada-wide capacity. Also like a CNCA corporation, a special Act corporation has the right to carry on its activities throughout Canada.

Extra-territorial capacity. A special Act corporation has the capacity to carry on its activities, conduct its affairs and exercise it powers in a foreign jurisdiction to the extent that the laws of that jurisdiction permit.

Abolition of the constructive notice doctrine. No person is affected by or deemed to have notice or knowledge of the contents of a document by reason only that the person can examine it at an office of the corporation.

Codification of the indoor management rule. Third parties dealing with a special Act corporation are protected by the same rules governing implied or apparent authority of the corporation's directors and officers as apply to a CNCA corporation.

Mandatory annual meetings. Directors of a special Act corporation must call the first annual meeting of members within 18 months after the corporation comes into existence and thereafter within 15 months after the previous annual meeting.

Court-ordered meetings of members. A court, on the application of a director, a member who is entitled to vote at an annual meeting of members or the Director appointed under the Act, may order a meeting of a special Act corporation to be called, held and conducted in the manner the court directs if it is impracticable to call the meeting in the manner in which it is otherwise to be called.

Continuance under the CNCA. The members of a special Act corporation may, by the approval of two-thirds of the votes cast by members, authorize the directors to apply to continue the corporation under the CNCA. The special Act ceases to apply to the corporation once it continues under the CNCA.

Voluntary dissolution. The members of a special Act corporation may liquidate and dissolve by special resolution (which requires the approval of at least two-thirds of the votes cast by members).

Involuntary dissolution. A special Act corporation may be dissolved by the Director appointed under the Act if the corporation defaults in certain obligations (such as not carrying on its activities for three years or failing to have any directors) or by the court on application of a member or other interested person if the corporation fails to hold an annual meeting for at least two consecutive years.

Annual returns. A special Act corporation must file an annual return in the same form as a CNCA corporation.

Federal special Act corporations should closely examine to what extent the CNCA applies to them.

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