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.
The Canada Not-for-profit Corporations Act divides corporations into soliciting and non-soliciting corporations, depending on whether they receive more than $10,000 in funding from public sources in the corporation's current fiscal year or its two previous fiscal years. The default rule for both soliciting and non-soliciting corporations is that they must appoint a public accountant and audit their annual financial statements each fiscal year. However, in recognition that, for smaller not-for-profit corporations, the costs of appointing a public accountant and auditing its financial statements may outweigh the incremental benefits, the Act and regulations provide for various exemptions. These exemptions depend on the type of corporation (soliciting or non-soliciting), the aggregate revenue of the corporation in its most recent fiscal periods and annual membership approval.
In Stirr v. Romanian Canadian Cultural Club "Mihail Eminescu" (decided 1993), the Saskatchewan Court of Queen's Bench held that a loan given by a non-profit corporation in financial difficulty to one of its directors was unfairly prejudicial to the members.
In Precision Feeds Ltd. v. Rock Lake Colony Ltd. (decided 1994), the Manitoba courts approved the appointment of a receiver-manager to take control of a non-profit corporation owned by a Hutterite colony where an internal dispute resulted in an impasse resulting in an inability to pay a critical supplier, which threatened irreparable harm to the corporation.
The 1998 decision of the Saskatchewan Court of Queen's Bench in Dyck v. Dyck marked the final chapter in the demise of the Dyck Historical Society, which was destroyed by the legal costs incurred in a fight amongst the members over what type of society it should be.
In Lee v. Métis Nation-Saskatchewan Secretariat Inc. (decided February 2017), the Saskatchewan Court of Queen's Bench held that a firm of chartered professional accountants had been appointed as independent oversight advisers of a non-profit corporation established under The Métis Act (Saskatchewan) and that, therefore, the powers of the corporation's board had not been suspended under The Non-profit Corporations Act (Saskatchewan).
There are both similarities and differences between the financing techniques and options open to not-for-profit corporations and for-profit business corporations. Notably, NFP corporations cannot raise funds by issuing shares, as an NFP corporation is a corporation without share capital. Other differences and similarities are discussed below.