In April, we provided federal charities and not-for-profits with a step by step guide to determine whether they could proceed with a virtual AGM during the Coronavirus (COVID-19) Pandemic:
As part of that post, we informed federal charities and not-for-profits that under section 160(2) of the Canada Not-for-Profit Corporations Act (“CNCA”), federal organizations could apply, by e-mail, to Corporations Canada for an extension to hold an AGM at a later date. Recently, however, Corporations Canada has launched a simpler way for federal non-profits and charities to request an extension of the timeframe for holding their AGM due to COVID-19. The simplified process permits federal organizations to apply for authorization to delay their AGM through an online, fillable form accessible on the Corporation Canada’s website. The fillable form must be received by Corporations Canada at least 30 business days before the date that a not-for-profit would have sent the notice calling its AGM under normal circumstances.
Federal charities and not-for-profits eligible for approval through the simplified application must meet the following criteria:
- The application is being made to delay an annual meeting of members that is required to be called within six months of the financial year that has recently ended;
- The corporation must be unable to comply with the timelines established by the CNCA to hold their AGM due to COVID-19 circumstances;
- Restrictions implemented by the federal and provincial governments supporting social distancing measures and limiting public gatherings during the COVID-19 crisis must make it impossible for the corporation to have a physical, in-person annual meeting as planned;
- Extending the time for calling an annual meeting will cause little or no prejudice to members; and
- The corporation must believe that the health and safety of its members, directors, officers and staff outweigh any potential prejudice to its members caused by an exemption and/or an extension granted to the corporation as a result of the application.
Once authorized for an extension, a not-for-profit must inform its members no later than 60 days after the date the extension is granted and, it must call its AGM before October 31, 2020 and hold it before December 31, 2020.
As part of the simplified application process, corporations may also apply to delay the disclosure of financial statements that are required to be sent and placed before the members at the an under section 172 of the CNCA.
This article is intended to provide an overview of issues that may arise for federal corporations in connection with convening an AGM during the COVID-19 pandemic. With the unprecedented degree of uncertainty and fluidity associated with COVID-19, it is important that corporations continue to monitor any further notices or changes which may be released by Corporations Canada. We further recommend, due to the unique nature of every corporation, that legal counsel be consulted to find an approach that works best for your organization.
At Mills & Mills LLP, our lawyers regularly help clients with a wide range of legal matters including business law, family 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.