Latest Update on CNCA continuances and dissolutions from Industry Canada

December 21, 2015 | 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

I recently contacted Industry Canada and they advised that as at December 18, 2015 there were 19,997 not-for-profit corporations under Canada Not-for-profit Corporations Act (“CNCA”) . The figure includes new incorporations, continuances from the CCA and continuances from other acts/jurisdictions. The number of continuance have slowed down with less than 50 per month being submitted to Industry Canada. The number of continuances to the CNCA was 12,525 as at December 5, 2015. There are also 3,163 not-for-profit corporations still under the Canada Corporations Act (“CCA”)

Since the CNCA’s transition period ended on October 17, 2014, Industry Canada has dissolved 9,340 CCA corporations (as at December 1, 2015). These dissolutions represent the first two phases of Industry Canada’s dissolution process:

Phase 1) CCA corporations that have not filed anything within 5 years and are considered to be inactive; and

Phase 2) CCA corporations that requested to be dissolved.

Both the notices and certificates of dissolution for the 9,340 dissolutions have been issued so these dissolved corporations can no longer continue to the CNCA and must instead be revived under the CNCA.

Industry Canada will start its last phase of dissolutions by sending notices of dissolution to the remaining 3,163 CCA corporations. These CCA corporations are those that have filed something with Industry Canada within the last 5 years and are presumed to be “active corporations”. Registered charities are included in this figure, however, it is unclear how many of these remaining CCA corporations are registered charities. Registered charities that are dissolved will also lose eventually lose their charitable status, but that will be as part of a later CRA process.  Dissolved corporations don't exist and therefore cannot be registered charities.  

Industry Canada will start sending notices to these CCA corporations in the new year and expects to have all notices sent within 3 to 6 months. The actual timeline may vary because it will depend on the number of letters that need to be sent to each CCA corporation. CCA corporations should check their address on record with Industry Canada's database to ensure that any dissolution notices are sent to the correct address. If the address is incorrect you can contact Industry Canada by email or mail to provide another address.  This does not offically change your registered office address but it will at least make it more likely you will receive the notice.

CCA corporations that receive a notice of dissolution will have 120 days to continue to the CNCA. It is possible to ask for an extension by contacting Industry Canada, however, at some point Industry Canada will require that all CCA corporation continue to the CNCA or be dissolved. For those who have not continued you may find this short webinar helpful. 

While dissolution for some is not a problem if  the organization is dormant and has no assets or interest in continuing.   However, we have already had to deal with circumstances where the corporation was dissolved and then people realized that an important asset or endowment was in the the dissolved corporation.   

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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