Corporate Update

November 2019 Charity & NFP Law Update

Theresa L.M. Man

Amendments to Nova Scotia’s Co-operative Associations Act

Nova Scotia’s Bill 197, An Act to Amend Chapter 81 of the Revised Statutes, 1989, the Companies Act, Chapter 98 of the Revised Statutes, 1989, the Co-operative Associations Act, and Chapter 101 of the Revised Statutes, 1989, the Corporations Registration Act received Royal Assent on October 30, 2019. These changes will permit co-operatives to keep register and recordkeeping requirements required under the Co-operative Associations Act electronically. In particular, they may store registers and records in a bound or loose-leaf format or in a photographic film format, or may enter or record them “in a system of mechanical or electronic data processing or an information storage device that is capable of reproducing information in an intelligible written format within a reasonable time.” When requested by a person entitled to examine the register or record, co-operatives must make a reproduction available or provide facilities to allow the person to examine and make copies of the register or record. However, co-operatives are required to “take reasonable precautions” to preserve and maintain the registers and records by “preventing their loss or destruction, preventing false entries and facilitating the detection and correction of inaccuracies.” 
As well, directors will be permitted to attend board meetings by telephonic, electronic or other means that allow for all directors to communicate adequately with one another during the meeting. Further, directors of co-operatives will be able to pass written resolutions in lieu of a meeting of the directors or a committee of the directors, provided that the resolutions are signed by all directors entitled to vote on that resolution.

Proposed Amendments to Ontario’s Co-Operative Corporations Act

Ontario’s Budget Bill 138, Plan to Build Ontario Together Act, 2019, which passed Second Reading on November 27, 2019 (as discussed in the Legislation Update above), proposes to amend the Co-operative Corporations Act. Bill 138 proposes, among other things, to remove the restriction on co-operative corporations from conducting 50 percent or more of their business with non-members, provided that the corporation is authorized to do so by its articles of incorporation or by-laws. Further, Bill 138 proposes to amend the conditions for exemption from certain audit provisions, and to repeal filing debt obligations under section 53 and financial statement and auditors’ report filing obligations under section 141. Bill 138 also proposes to amend the Co-operative Corporations Act to provide, where the primary object of a co-operative corporation is to provide employment to its members, that at least 75 percent of permanent full-time employees and 75 percent of all employees must be members of the co-operative corporation, unless otherwise prescribed by regulation.

Read the November 2019 Charity & NFP Law Update