CRA Notices to Registered Charities on CCA/CNCA continuance may or may not be accurate

September 22, 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, Ethics and Canadian Charities

CRA has been sending out numerous notices with respect to the importance of Canada Corporations Act (CCA) corporations continuing to the new Canada Not-for-profit Corporations Act (CNCA).  A number of people have contacted us with respect to the notice.   In some cases the Federal corporations  were established in 2012 or 2013 under the CNCA.   In other words they were never even under the CCA and cannot continue to the CNCA.  Therefore, some of these notices may be sent to corporations that need to make changes, but others may be sent in error.   You can check your status and under which act you are currently under at the Industry Canada website.  It is easy and free.  

If its says "Governing Legislation - Canada Not-for-profit Corporations Act" then you are under the CNCA and don't need to continue.  On the other hand if it says "Canada Corporations Act - Part II" then you need to continue if you don't want to be dissolved. (see resources below)  If your corporation was incorporated after October 17, 2011 then you are under the CNCA and do not have to continue to it.  I have some sympathy for the CRA in that they probably used data from Industry Canada to determine which organizations were/are under the CCA. When we used that same data which is in XML format there was over 500,000 errors which we had to search and replace to come up with this list in April 2014 of CCA corporations that needed to continue.  Make sure that after you continue, if you are a Canadian registered charity and you can check that here, that you notify the Charities Directorate and provide them with the necessary documentation.  It appears that there are thousands of registered charities that have not continued and their charitable status is in peril if they are dissolved.   

Here is a copy of the notice and below is the text of the notice:  

"September 12,2014

Subject: Keeping your status as a registered charity

Your charity is currently incorporated under Part II of the Canada Corporations Act (CCA). The Canada
Not-for-profit Corporations Act (NFP Act) has established a new set of rules for federally incorporated
not-for-profit corporations in Canada. These new rules replace Part II of the CCA.

For more information about the new rules and making the transition to the NFP Act, visit the Industry
Canada website at http://www.corporationscanada.ic.gc.ca/eic/site/cd-dgc.nsf/englh_cs04954.html.
Registered charities established under the CCA need to apply for a certificate of continuance with
Corporations Canada by October 17,2014, to transition to the new rules. After your charity's transition
to the NFP Act is complete, you will need to send the following documents to the Canada Revenue
Agency's Charities Directorate at the address below to keep your registered status under the
Income Tax Act:

  • a copy of the Continuance (transition) checklist found on our website at www.cra.gc.ca/chrts-gvng/chrts/prtng/nfpc/cntnnc-chcklst-eng.html;
  • a copy of the certificate of continuance issued by Corporations Canada;
  • a copy of Industry Canada's Form 4031, Articles of Continuance;
  • a list of current directors (if amended);
  • a copy of the current bylaws, certified by two directors, with an effective date (if amended); and
  • a statement of current activities (if the purposes have changed and have not been already reviewed by the Charities Directorate).

Mailing address:
Charities Directorate
Canada Revenue Agency
Ottawa ON K1A 0L5


If a registered charity established under the CCA does not apply for the certificate of continuance,
Corporations Canada may dissolve the charity's corporate status.


When a charity's corporate status is dissolved, it is no longer a legal entity and its registration could be
revoked by the Canada Revenue Agency (CRA). When a charity's registration is revoked, it:

  • cannot issue official donation receipts for gifts it receives;
  • no longer qualifies for exemption from income tax as a registered charity; and
  • must transfer all of its remaining property to an eligible donee or be subject to a revocation tax equal to the property's full value.

If your charity has already completed the transition process with Corporations Canada and supplied the required information to the CRA, no further action is needed. Otherwise, for more information to help you make the transition, visit www.cra.gc.ca/chrts-gvnglchrts/prtng/nfpc/menu-eng.html. You can also contact the Charities Directorate by telephone at 1-800-267-2384, between 9 a.m. and 6 p.m., local time, Monday to Friday (except statutory holidays).

Stay informed by signing up for the Charities and giving- What's new electronic mailing list at
www .cra.gc.ca/esrvc-srvce/mllst/sbscrbchrts-eng.html.

Sincerely,

Charities Directorate
Canada Revenue Agency"

If you still need to continue to the CNCA and you require assistance you can contact us.   

RESOURCES

Here are some resources that you might find helpful: 

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

Contact

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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