It has been challenging for not-for-profits and charities to keep up with the shifting rules during the COVID-19 pandemic around Annual General Meeting (“AGM”) deadlines, virtual meetings and filings. What complicates matters is that the rules differ depending on whether the corporation is incorporated federally or provincially. While things seem to have stabilized under federal jurisdiction, there have been some notable changes to the provincial landscape. We run through some of those changes in Ontario, as well as remind you about the federal rules, in our corporate round-up below.
When Ontario ended the declaration of emergency in the province at the end of July 2020, it brought with it the end of the emergency order that allowed Ontario corporations to hold virtual meetings, despite what was stated in the corporations’ by-laws. With the passing of the new Regulation 544/20 under the Corporations Act, Ontario has extended the ability for corporations to hold virtual meetings until May 31, 2021. This means that Ontario corporations may continue to hold virtual meetings of members or directors, even if their by-laws do not allow for them.
Meetings may be held over phone or videoconference. Remember that when holding virtual meetings of directors, the directors must be able to communicate with each other “simultaneously and instantaneously” to be considered present. A series of emails, for example, would not qualify as a meeting.
For members’ meetings, the chair of the meeting has the authority to decide how members will vote and how votes are recorded at the meeting, despite what is stated in the by-laws. There have, however, been no additional extensions granted for Annual General Meetings (AGMs).
Ontario Not-for-Profit Corporations Act (“ONCA”)
The period to adopt the province’s new not-for-profit legislation, the Ontario Not-for-Profit Corporations Act (“ONCA”), has been extended to the end of 2021. This means that Ontario corporations have until next year to bring their governing documents up-to-date, keeping in mind that they will have three years to transition to the new legislation once it comes into force.
The sections in ONCA related to voting powers of non-voting members, however, will likely be removed from the legislation if it is not passed by the end of this year (which is likely). These sections allowed for voting by membership class and the right of non-voting members to vote on fundamental changes to the corporation, such as changes to the conditions of membership; the amalgamation with other corporations; the continuance of the corporation to another jurisdiction; and the sale, lease or exchange of property of the corporation.
If these sections are excluded from ONCA, not-for-profits and charities may establish or continue to have multiple classes of members, including both voting and non-voting membership classes, without having to worry about non-voting members having the ability to vote on significant decisions of the corporation.
FEDERAL RULES UNCHANGED
Annual General Meeting (“AGM”) Extensions for Federal Corporations
You may recall that the federal government had extended AGM deadlines for not-for-profit corporations governed by the Canada Not-for-Profit Corporations Act. Retroactive to March 13, 2020, federal not-for-profit corporations could postpone their AGMs to the earlier of (i) 21 months after the last AGM and not more than 12 months after the fiscal year-end; or (ii) December 31, 2020.
Federal not-for-profit corporations must abide by their by-laws with respect to virtual meetings of members. If the corporation’s by-laws do not allow for virtual meetings of members or are silent on virtual meetings of members, the corporation may not hold a virtual members’ meeting. Instead, federal corporations have the option of holding a partially virtual meeting, where some members attend in person (with social distancing) and others attend virtually, or opting for a written resolution instead of a meeting (optimal for a small number of members). Federal corporations could change their by-laws to allow for virtual meetings, but any change to the by-laws would first require members to approve them in an in-person or partially virtual meeting, or by written resolution, prior to becoming effective.
Note that directors of federal not-for-profit corporations may hold virtual meetings, if allowed for in the by-law or with the consent of all directors.
TAX FILING DEADLINES
A reminder that registered charities that have a T3010 Registered Charity Information Return due between March 18, 2020 and December 31, 2020, have until December 31, 2020 to file. Note that the T3010 form had been updated by the Canada Revenue Agency in November. The new form can be found here or online through the CRA’s digital services.
PooranLaw is committed to supporting not-for-profits, charities and social enterprises during the COVID-19 pandemic. We will continue to monitor ongoing changes to legislation or policy. In the meantime, if you require legal assistance, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team.
Note: This article provides general information only and does not constitute, and should not be relied upon as, legal advice or opinion. PooranLaw Professional Corporation holds the copyright to this article and the article and its contents may not be copied or reproduced in any form, in whole or in part, without the express permission of PooranLaw Professional Corporation.