In times of global crises, business is not as usual. Under Canadian law, non-for-profit corporations must call an annual meeting of members every year within certain strict timelines. An ongoing war or global pandemic may impact your organization’s ability to call an annual meeting within the required time frames. Thankfully, federal corporations can apply to Corporations Canada for an exemption to extend this time.
Annual Meeting Requirements
Section 61 of the Canada Not-for-profit Corporations Regulations requires the first annual meeting be called within 18 months of incorporation and subsequent meetings must be called no later than 15 months after the previous one and no later than 6 months after the corporation’s preceding financial year-end.
If circumstances dictate that an extension of time is required, your corporation must apply to Corporations Canada at least 30 days before the day that notice of the time and place of the meeting must be given to members. Typically, exemptions will last for 1 year, but there may be circumstances where a multi-year exemption will be accepted.
What You Need to Apply for an Exemption
Your application letter to the Director of Corporations Canada must explain why the annual meeting cannot be called within the required time frames and the nature of the detriment to the corporation if the meeting were called within the required time frames. For example, there may be an ongoing war in a country where many of your corporation’s members are located, making it difficult for members to travel or to have reliable internet or telephone connections and risking not meeting quorum if the meeting were held.
No Prejudice
Your application letter must also explain how extending the time for calling an annual meeting would cause little or no prejudice to the members of your corporation. Providing members access to the required current information that would be available before a general meeting, such as annual financial statements, sufficient disclosure of the extension and how it affects their rights under the Canada Not-for-profit Corporations Act, will reduce any prejudice that may be caused. In addition, passing a special resolution obtaining members support for extending the time for calling an annual meeting before applying is persuasive.
Filing Fee
Finally, a $250 filing fee must be paid to Corporations Canada – it takes 30 days to review and process an application. In our experience, discussions with representatives of Corporations Canada are sometimes required to more fully explain the situation of your organization and the surrounding circumstances. Having counsel attend and participate in the discussion can be helpful to ensure that all the legal requirements for an exemption are met.
For more information regarding whether your non-for-profit corporation can apply for an exemption or for help applying, please contact Taras Kulish at Mills & Mills LLP.
At Mills & Mills LLP, our lawyers regularly help clients with a wide range of legal matters including business law, real estate law, estate law, employment law, health law, and tax law. For over 130 years, we have earned a reputation amongst our peers and clients for quality of service and breadth of knowledge. Contact us online or at (416) 863-0125. The material provided through the Mills & Mills LLP website is for general information purposes only. It is not intended to provide legal advice or opinions of any kind.
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