Annex A
Provisions in Letters Patent and By-laws Superseded by the NFP Act

Because the old Act contained few rules, the letters patent and by-laws of your corporation likely include provisions relating to the following matters. In contrast, the NFP Act provides rules to deal with these matters that apply to all not-for-profit corporations. Consequently, the articles and new by-laws of your corporation do not need to set out these provisions.

Do not include provisions dealing with the following matters:

• Statement that the operations of the corporation may be carried on throughout Canada: The NFP Act makes it clear that the corporation may carry on activities throughout Canada.
• Statement that the corporation is to carry on its operations without pecuniary gain to its members: Under the NFP Act, no profit can be distributed to members unless it is in furtherance of the corporation’s activities or is otherwise permitted by the Act.
• Removal of directors: The NFP Act provides that members may remove a director by majority vote at a special meeting. This reinforces the NFP Act rule that only members elect directors.
• Appointment of ex-officio directors: The NFP Act does not permit ex-officio directors (i.e., individuals who are directors by virtue of the office they occupy). Individuals, not offices, are elected by members to be directors.
• Powers of the board of directors to manage the corporation: The NFP Act gives directors the responsibility for managing or supervising the management of a corporation. This responsibility can be restricted in the articles.
• Annual meetings of members: The NFP Act requires that annual meetings of members be held. Written resolutions in lieu of a meeting are allowed.
• Enactment, amendment or repeal of by-laws: Ministerial approval will not be required to make a by-law effective.
• Appointment of auditor: The NFP Act requires members of a corporation to appoint a public accountant at the annual meeting. Members of a soliciting corporation with gross annual revenues equal to or less than $50,000 and members of a non-soliciting corporation with gross annual revenues less than or equal to $1 million can, by unanimous vote, decide not to appoint a public accountant.
• Report by auditor: The NFP Act specifies the types of financial review (audit or review engagement) that an auditor can conduct (see table).

You will find more information on the new rules and the NFP Act on the Corporations Canada website.