Maintaning Corporate Records
Annual
Meeting
An annual meeting must be held not later than eighteen months after incorporation
and subsequently not more than fifteen months after the holding of the
last annual meeting.
Election
of Directors and Officers
Usually the directors are elected annually at the general meeting, by
the members of the corporation. Directors in office at the time are retired
and, if eligible, may seek re-election to resume office for another year.
Generally directors are elected by members. Officers are appointed by
the board of directors.
Quorum
for Meetings
The quorum for meetings of directors is a majority, unless otherwise
provided for in the Letters Patent, Supplementary Letters Patent
or in a special resolution of the corporation, and in any event
shall not be less than two-fifths of the board of directors.
Reporting
Requirements
Within
60 days of incorporation you are required to file an Initial Return.
Subsequently, within 15 days after any change that takes place in the
information set out in the Initial Return, you must file a Notice of
Change.
Business Development Centre is always available to provide assistance
with filing Initial Return or Notice of Change. You
can view more information here.
Special
Information Notice
Periodically special information notices under section 6 of the Corporations
Information Act are mailed out to all Ontario non-profit corporations on
record with the Companies Branch. When your corporation receives this document,
it is essential that it be completed and returned to the Branch within
thirty days. The special information notice must be filed whether or not
the corporation has recently filed an Initial Return or Notice of Change.
Failure to file the special information notice may result in cancellation
of the charter and the dissolution of the corporation.
Penalties
for Failure to Comply with Filing Requirements
The importance of submitting these filings cannot be over-emphasized.
Failure to comply may lead to cancellation of the Letters Patent and
dissolution of the corporation. Penalties are provided in the Corporations
Information Act for individuals (up to $2,000) and for corporations (up
to $25,000) where reporting requirements are not complied with. Also,
a corporation that is in default of the reporting requirements is not
capable of maintaining any action in any court in Ontario in respect
of any contracts made by the corporation.
Audit
Provisions
Members of the corporation must appoint an auditor to hold office until
the first annual meeting and at each annual meeting must appoint one or
more auditors to hold office until the next annual meeting. There is no
waiving of this statutory requirement.
Record
Keeping Requirements
A not-for-profit corporation is required, among other things, to meet
certain record keeping obligations such as:
- Proper books of account and accounting records
- Minutes of meetings of members and directors
- Maintain copies of Letters Patent, Supplementary Letters Patent, By-Laws and Special Resolutions
- Register of its members and directors
Use
of Corporate Name
The name of a corporation is set out in the instrument of incorporation
(Letters Patent) or if subsequently changed, in the instrument of amendment
(Supplementary Letters Patent) and that is the name that the corporation
must use in all transactions.
For example, if the name of the corporation is The Muskoka and Haliburton
Naturalists Inc., it may not identify itself as Muskoka and Haliburton
Naturalists.
Changing Corporate Name
A corporation may apply for Supplementary Letters Patent to change its
corporate name.
Use
of a Name Other than Corporate Name
A corporation may use a name other than its corporate name. For example,
a corporation called Federation of Ontario Moose Callers may carry on
its undertaking under the assumed name "Ontario Moose Callers".
However, NO corporation shall carry on business in Ontario or identify
itself to the Ontario public by a name other than its corporate name
unless the assumed name is first registered with the Companies Branch.
A corporation which has registered and uses a name other than its corporate name is required to set out its corporate name on all contracts, invoices, negotiable instruments and orders for goods and services.
Changing
the Authorized Number of Directors
The number of directors of a corporation is established at the time of
incorporation, being the number of first directors named in the Letters
Patent.
The board of directors of a corporation shall consist of a fixed number
of directors not fewer than three.
A corporation may by special resolution increase or decrease the number
of its directors.
"Special Resolution" means a resolution passed by the directors and
confirmed with or without variation by at least two-thirds of the votes cast
at a general meeting of the members of the corporation duly called for that
purpose or in lieu of such confirmation by the consent in writing of all the
members entitled to vote at such a meeting.
A notice of such special resolution must be filed with the Companies
Branch and published by the corporation in the Ontario Gazette within
14 days after the resolution has been passed.
Changing
the Location of the Head Office
The location of the head office is established in the Letters Patent.
However, a corporation may by special resolution change the location
of its head office to another place in Ontario.
"Special Resolution" means a resolution passed by the directors and
confirmed with or without variation by at least two-thirds of the votes cast
at a general meeting of the members of the corporation duly called for that
purpose or in lieu of such confirmation by the consent in writing of all the
members entitled to vote at such a meeting.
A notice of such special resolution must be filed with the Companies
Branch and published by the corporation in the Ontario Gazette within
14 days after the resolution has been passed.
Changing
the Objects and Special Provisions
A corporation may apply for Supplementary Letters Patent to change all
or any of its objects and/or special provisions set out in the Letters
Patent.
If the corporation is, or after issuance of Supplementary Letters Patent,
would be funded, supervised, etc. by a Government Agency or Ministry,
it may be wise to consult with the funding or supervising Agency or Ministry
prior to completing the application for Supplementary Letters Patent.
Applicants for Supplementary Letters Patent should also bear in mind
that, in addition to the Corporations Act, there may be other legislation
to which the corporation may be subject.
Income
Tax Act Considerations
A not-for-profit corporation is generally exempt from federal income
tax.
Although an organization may not qualify for charitable status, the non-profit-non-charitable
designation may still be advantageous from a federal income tax point
of view.
Ontario
Corporations Tax Branch Requirements
Corporations, whether share or non-share, which are exempt from both
income tax and capital tax, are not required to file annual Ontario Corporations
Tax Returns (CT-23) with the Corporations Tax Branch.
Where a corporation loses its exempt status for a particular taxation
year it would be required to file a return and pay the taxes for that
year. It would also be required to file for each subsequent year if:
a) it had a taxable income for the year;
b) its total assets and/or gross revenue exceed $1 million.
For corporations which have not lost their exempt status, the Branch
may require that these corporations complete questionnaires from time
to time to see if their tax status has changed.
Dissolution - Surrender of the Charter
Where a corporation no longer serves the purpose for which it was incorporated
or where the members have lost the interest in the corporation, it may
be desirable for the members to terminate the existence of the corporation.
The most straight forward method of dissolution is the surrender of the
charter.
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