For those who read our blog you will know that we are very pleased with the new Canada Not-for-profit Corporations Act (“CNCA”) that came into effect in 2011. It is a very easy to use modern corporate act that allows a tremendous amount of flexibility and was a wonderful improvement over the old Canada Corporations Act. It is also a major improvement over many of the provincial non-profit corporate acts. Although establishing a non-profit corporation was relatively easy there was one problem with using the Online Filing Centre.
One of the problems with using the CNCA was that when you inputted the information on the Corporations Canada Online Filing Centre and saved it as a draft form to incorporate a new non-profit corporation, that information was only being kept on the system for 60 days. While 60 days sounds reasonable when you have clients with a number of different directors located in different countries it can take months to finalize and execute the documents. For nonprofit corporations, especially if it is a registered charity, is often more complicated than a typical for-profit incorporation. The corporate documents need to be aligned with the Charity application and the discussions and revisions can involve months of work. If all of the information is removed from the Online Filing Centre in 60 days then it needs to all be re-inputted which is time consuming and increases the likelihood of errors.
Although I had been discussing this issue for a number of years with Corporations Canada I wrote to Coleen Kirby on April 3, 2018 the following:
"When preparing draft forms using the Online Filing System, we noticed that the drafts are only saved for 60 days. After 60 days, we would need to upload the information a second time. We find the 60 days a short time frame, given that a big majority of our clients take a long time to get back to us. Therefore, we would often resort to preparing paper copies of documents rather than submitting documents through the Online Filing System. Would Corporations Canada consider making the 60 day timeframe longer (i.e. 6 months)?"
I called Coleen today and to my very great positive surprise Corporations Canada has made the change and now the information for an incorporation on their Online Filing Centre will be kept for 6 months on the system. I’m very glad that this change has taken place and there are a number of other improvements that Corporations Canada is diligently working on to provide a better user experience.
This will encourage groups also to use the Online Filing Centre as opposed to off-line paper documents. There are many advantages of using the Online Filing Centre including it is cheaper and far quicker i.e. one day rather than five days turnaround for an incorporation. With this change many more people may move over to incorporating through the Online Filing Centre.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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.