How to avoid common deficiencies in Form 4031 – Articles of Continuance (transition)
Over 40% of applications for transition to the Canada Not-for-profit Corporations Act (NFP Act) are returned to the applicant because of deficiencies.
This page highlights common deficiencies. You will find general comments and for each item found on Form 4031 – Articles of Continuance (transition), a description of the common deficiencies and how to avoid them. For help on completing the form, review the instructions for the form and the Checklist for Continuance (transition) Documents.
- Missing annexes or schedules – Ensure all annexes or schedules referenced in the articles of continuance (transition) are included in the application. If anything is missing, the application will be returned.
- Mandatory article provisions not included – Article provisions are required for each item in the form. The exceptions are:
- Item 2 – If a change of name is requested, indicate proposed corporate name
- Item 7 – Restrictions on the activities that the corporation may carry on, if any
- Item 10 – Additional provisions, if any
Item 1: Current name of the corporation
- Full legal name not set out – The corporate name must be the full legal name that is set out on the first page of the existing letters patent or on any supplementary letters patent. It can also be found using the Corporations Canada online database.
- Unclear if a name change is being requested – If only part of the legal name is used or if the legal name has both an English and a French version and only one language version is used, Corporations Canada will assume you are requesting a change of name and will return the application since any name change is to be set out in Item 2.
Item 2 : If a change of name is requested, indicate proposed corporate name
- Unless a new corporate name is being requested, this item is to be blank.
- Missing Nuans Name Search Report – If a new corporate name is requested (other than an assigned numbered name), a Nuans Name Search Report must be submitted to Corporations Canada with the continuance (transition) documents. Corporations Canada does not conduct name searches on behalf of applicants.
Item 3: Corporation number
- Corporation number does not match name – The corporation number identifies the corporation in Corporation Canada’s systems and was given to the corporation upon incorporation. The number must correspond with the corporation name. You can find the corporation number on correspondence from Corporations Canada or find it using the Corporations Canada online database.
Item 4: The province or territory in Canada where the registered office is situated
- Province/Territory does not match – The province/territory where the registered office is located must be the same as the province/territory set out in Form 4002 – Initial Registered Office Address and First Board of Directors. The registered office must be within the province or territory set out in the articles.
Item 5 : Minimum and maximum number of directors
- Number of directors not within min/max range – The number of directors that are set out in Form 4002 – Initial Registered Office Address and First Board of Directors must be within the minimum and maximum numbers set out here.
Item 6: Statement of the purpose of the corporation
- Statement of purpose missing – This item cannot be blank or contain the words “None” or “N/A”.
Item 7: Restrictions on the activities that the corporation may carry on, if any
- If there are no restriction on activities, it should contain the words “None” or “N/A”. It can also be blank.
Item 8: The classes, or regional or other groups, of members that the corporation is authorized to establish
- No classes or groups set out – This item cannot be blank or contain the words “None” or “N/A”.
- The directors will decide at their first meeting. (Unacceptable because no classes or groups are specified.)
- Voting rights not specified – A corporation must have at least one class or group of members, in which case, all members are voting members. A corporation may have two or more classes or groups of members and not all classes or groups have to be given the right to vote. If there is more than one class or group of members, the articles must give the right to vote to at least one class or group. Consult Model Articles.
- There are 8 different classes: Active, Affiliate, Associate, Resident, Student, Retired and Honorary. (Unacceptable because voting rights not specified for each class.)
- Full Members. Provisional Members. Candidate Members. Retired Members. Honorary Members. (Unacceptable because voting rights not specified for each class or group.)
- Unclear description of classes or groups – The information in Item 8 must clearly describe the classes or groups.
- There are no special classes. (Unacceptable because no class is specified.)
- Paid membership – voting. (Unacceptable because the description of the class or group is unclear.)
- Canadian manufacturers and distributors of widgets, gadgets and allied products, as the same are now known in the trade or as may hereafter be defined by the members. (Unacceptable because there is no class or group here.)
- Only includes conditions of members – Item 8 sets out what member classes or groups a corporation is authorized to have. Membership conditions or the process for applying for membership are usually set out in the corporation’s by-laws (see By-law Builder or Model By-laws). If conditions of membership need to be included in the articles, it is better to set them out in Item 10: Additional provisions.
- Membership in the corporation is confined to persons who have made a public statement in support of the philosophy of the corporation and who have qualified for membership. New applicants for membership shall be interviewed by two Senior Members. If their report to the Board of Governors, and subsequently to the members of the corporation, has been considered satisfactory, they then shall be accepted into membership. (Unacceptable because there is no class or group here and primarily describes the process of becoming a member.)
- Any institutions, groups, organizations or other structures, regardless of geographic location or other restrictions, so long as they further the fulfillment of the statement or purpose in Item 6. (Unacceptable because it primarily describes who may be a member, but does not set out a class or group.)
- Includes qualifications for directors – In Item 8, do not include qualifications for directors. Qualifications for directors are usually set out in the corporation’s by-laws. If qualifications need to be included in the articles, set them out in Item 10: Additional provisions.
- No person shall be qualified for election by Members as a director unless that person is a person described in a duly elected Chairman of the Board of a corporation or former Chairman of the Board of a corporation who is a Member. (Unacceptable as a provision in Item 8 since it relates to directors, not members. It should instead be set out in Item 10.)
Item 9: Statement regarding the distribution of property remaining on liquidation
- Statement missing – This item cannot be blank or contain the words “None” or “N/A”. Every corporation must include a statement to deal with any property that may remain upon liquidation. See the instructions for Item 9 for more information.
Item 10: Additional provisions, if any
- By-laws attached to articles – In Item 10, do not attach the corporation’s by-laws. Otherwise they potentially become part of the articles and can only be changed through an amendment to the articles. If you want certain provisions that are the usually in the by-laws to be part of the articles, then the provision is added directly to Item 10.
- The General Operating By-law #1 has been revised to comply with the Canada Not-for-profit Corporations Act and has been attached to these articles. (Unacceptable because by-laws are not attached to articles)
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