Industry Canada has sent out 16,000 notices of pending dissolution to 6000 Federal non-profits

December 15, 2014 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law, New corporate non-profit acts, Canadian Charity Statistics

Over the last 6 weeks Corporations Canada of Industry Canada has sent out an estimated 16,000 notices to approximately 6000 Canadian Federal non-profit corporations that are still under the Canada Corporations Act (CCA).  Industry Canada sends notices to the corporation and to each director.  They also publish the names of the corporations online.

Industry Canada in the past has generally estimated that there were 17,000 CCA Federal corporations.  Actually on their database there were over 25,000 CCA corporations but many of them are assumed to be dormant as they have not filed in many years.  The 8000 dormant corporations are the ones that Industry Canada is targeting first.  Most of the 6000 corporations that received notices of pending dissolution so far would be in that dormant category.

Of the 17,000 approximately 11,500 have moved over to the CNCA.  There are probably others in the pipeline.  Apparently Industry Canada called a large number of corporations this summer and about 10% we waiting to be dissolved.  

Industry Canada has endeavored to remove registered charities for now from the list of corporations receiving the notices of pending dissolution.   However, as the names on their database and the CRA database may not be consistent and Industry Canada does not have business numbers for the older corporations, we can expect that some registered charities that may not be up to date in their filings may receive notices of pending dissolution.  It is particularly problematic for a registered charity to be dissolved as they will at some point also lose their charity status as CRA takes the position that a corporation that does not exist cannot be a registered charity.

With the corporations still under the CCA, Industry Canada will only send out notices by Canada Post if they have a valid address.  In the past Industry Canada has mailed notices to a corporation and the mail was returned to Industry Canada then Industry Canada makes a note that the address is not valid.  Industry Canada will not mail to an invalid address.  

If you would like to see the list of CCA corporations that have been sent notices of pending dissolution then see the Industry Canada monthly transactions and find "Notice of Decision to Dissolve (Failure to Transition) (NFP)"

What can you do if you have not continued?

  1. Check the corporate profile report on Industry Canada’s website to see if you corporation is showing a "Status - Active - Dissolution Pending (Failure to transition)" or the normal warning about "Governing Legislation -Canada Corporations Act - Part II - See Important Note" which reminds you to continue and notes "This corporation must transition to the Canada Not-for-profit Corporations Act or it will be dissolved for failure to transition".
  2. Check the address that Industry Canada has on file at https://strategis.ic.gc.ca/app/scr/cc/CorporationsCanada/fdrlCrpSrch.html?locale=en_CA.  If the address at the Industry Canada website is not up to date then send an email with the correct address.  Industry Canada will keep the address that is emailed to them on file.  Sending an email does not formally change the registered office address of the CCA corporation.  It only changes the mailing addresses to which correspondence may be sent.  Industry Canada will accept any address even a post office box even though that is not their preference.    
  3. If you receive a notice of pending dissolution then you should make sure that if you want your CCA corporation to avoid dissolution that you either prepare the necessary documents to effect a continuance or you retain a lawyer to assist with the process.  After you receive a notice of pending dissolution you can request an extension but remember that eventually Industry Canada will stop giving out extensions as they want clean up the CCA.
  4. If you have not received a notice of pending dissolution but you are still under the CCA expect that you will receive it within the next 6 months to a year.
  5. If your corporation is dissolved then you can always file for a revival. 

Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

mark@blumbergs.ca
416.361.1982
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