Menu

Corporate Finance Archives

Audit and Review Engagement Requirements for CNCA Corporations

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.

Appointment of Receiver-Manager Warranted Where Critical Supplier Cannot Otherwise be Paid

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.

When Legal Costs Exceed the Value of Assets, Insolvency Must Ensue

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.

Distinction between the Appointment of a Receiver-Manager and an Independent Adviser

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).

A Primer on NFP Corporate Finance

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.

Contact The Firm

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an lawyer-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Contact

Gray, Whitley LLP
400 - 36 King Street E.
Toronto, ON M5C 3B2

Phone: 647-560-3705
Fax: 647-256-6601
Map & Directions

top