Extending the time for calling an annual meeting of members
Annual general meetings during COVID-19
The Government of Canada has extended the time to call a 2020 annual general meeting (AGM) to the shortest of the following two options:
- 21 months after the previous AGM and no more than 12 months after the last financial year-end; or
- December 31, 2020.
You do not need to apply to Corporations Canada for the extension.
This policy sets out information about applying to the Director appointed under the Canada Not-for-profit Corporations Act (NFP Act) to extend the time for calling an annual meeting of members. It will help you:
- understand when your corporation must call its annual meeting
- decide if your corporation should apply to extend the time for calling the meeting.
This policy provides information and sets out guidelines. It is not intended to be a binding statement of the decision that will be made in any particular case nor is it meant to replace legal advice. Consider consulting a lawyer or another professional to ensure that your particular needs are being addressed when applying.
A corporation must call an annual meeting of members every year. The NFP Act and the Canada Not-for-profit Corporations Regulations (NFP Regulations) set out the time frames within which a corporation must call an annual meeting.
It is important that a corporation call an annual meeting every year and in a timely manner because it will:
- ensure that members can make governance decisions based on current information
- ensure transparency and disclosure
- give members the confidence to continue to support the corporation.
A corporation is required to call an annual meeting within 18 months of the date the corporation comes into existence. After that, an annual meeting must be called no later than 15 months after the previous annual meeting and no later than 6 months after the corporation’s preceding financial year-end.
There may be circumstances where it would be detrimental to a corporation to call an annual meeting of members within the time frames mentioned above. In such cases, the corporation can apply to extend the time for calling the meeting (refer to paragraph 160(2) of the NFP Act).
The Director has the power to extend the time for calling the meeting, as long as the Director reasonably believes that members will not be prejudiced. However, the Director does not have the power to exempt a corporation from the obligation of calling an annual meeting of members altogether.
Why a corporation would apply for this exemption
A corporation may consider applying for this exemption when it would be detrimental to a corporation to call an annual meeting of members within the prescribed time frames. This detriment can relate to one financial year or multiple financial years. The Director evaluates the detriment on a case-by-case basis.
For example, it could be impractical for a corporation that is about to go through an internal reorganization to call the annual meeting of members within the prescribed time frames before the reorganization is complete.
Another example where it may be detrimental to a corporation to call an annual meeting of members within the prescribed time frames is when its annual meeting has historically been scheduled after the annual meetings of related corporations have been held. This accommodation results in the annual meeting falling outside of the prescribed time frames.
When a corporation can apply for this exemption
A corporation must apply at least 30 days before the day on which the notice of the time and place of the meeting is to be given to members (refer to paragraph 89(2)(b) of the NFP Regulations). All applications are reviewed on a case-by-case basis.
How long an exemption is effective
An exemption to extend the time for calling an annual meeting of members is typically effective for one financial year. However, there may be circumstances where a multi-year exemption is warranted. In those cases, the exemption is effective for the period indicated on the exemption.
Review of an application
When evaluating an application to extend the time for calling an annual meeting of members, the Director will assess the reasons for the application and the potential prejudice to members. The potential prejudice is assessed by asking the following question:
- Would extending the time for calling an annual meeting of members be prejudicial to members?
The Director will consider there to be little or no prejudice to members in situations where:
- members still have access to the required current information; for example, a corporation provides its annual financial statements (refer to paragraph 172(1) of the NFP Act) to members within 6 months of its previous financial year-end, as well as its interim financial statements for the particular ongoing financial year
- the corporation gives sufficient disclosure to its members of the extension and how it affects their rights under the NFP Act; for example, a corporation informs its members of the exemption as soon as possible after its issuance, and
- members support extending the time for calling an annual meeting by passing a special resolution before applying and, for multi-year extensions, at annual meetings for each year that is covered by the exemption.
What information must be included in the application
An application must clearly set out:
- when the annual meeting is required to be called according to the NFP Act and NFP Regulations
- when the corporation proposes to call the annual meeting
- why the 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, and
- how extending the time for calling an annual meeting would cause little or no prejudice to the members of the corporation.
Issuing an exemption
If the exemption is issued, the corporation will receive an exemption to extend the time for calling an annual meeting of members on any terms that the Director thinks fit.
Renewing an exemption
There could be circumstances where a renewal is required. Renewal applications are reviewed on a case-by-case basis.
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