Corporate Update

By Theresa L.M. Man and Adriel N. Clayton

Aug 2023 Charity & NFP Law Update
Published on August 31, 2023



Corporations Canada to Integrate NUANS Name Reports into Online Filing Centre

In an effort to improve client services, Corporations Canada announced on July 14, 2023 that it will be integrating the NUANS name search report with its Online Filing Centre (“OFC”) in the fall of 2023. Going forward, organizations incorporated under the Canada Not-for-profit Corporations Act that need to obtain a NUANS name search report for incorporation and corporate name preapproval services will need to purchase the report through the OFC.

Organizations that have bought a NUANS name search report within 90 days prior to the system update will be able to rely on the report only until the update takes effect. Following the system update, they will need to use the new process, and name search reports purchased before the update will not be accepted. However, a specific date for the system update has not yet been set. 

Corporations Canada Commencing Dissolution for Failure to File Annual Returns

Not-for-profit corporations under the Canada Not-for-profit Corporations Act that have failed to file their annual returns for three years may be subject to administrative dissolution. Corporations Canada announced on June 14, 2023, that it would begin the dissolution process for these corporations starting in July 2023.

In this regard, Corporations Canada will first send a Notice of Intent to Dissolve to those corporations in default of filing annual returns. Corporations will then have 120 days from the date of the notice to file the required annual returns. Certificates of Dissolution will be issued to those corporations that fail to do so by the deadline.

Corporations Canada’s announcement warns that dissolution can have serious legal repercussions, including that dissolved corporations cannot conduct activities, may not be eligible for bank loans, and will have their charitable status revoked. It is therefore important that corporations stay on top of their filing obligations in order to avoid potential dissolution. 

 Identity Verification Now Mandatory for Corporations Canada’s Online Services

Corporations Canada announced on June 28, 2023, that identity verification is now mandatory in order to access a majority of Corporations Canada’s online services. Identity can be verified on the ISED Account profile, after signing in through the OFC, and only needs to be done once. This additional step adds a layer of security and protection to personal and corporate information. 

Ontario Proposes Amendments to Simplify Continuance for Share Capital Social Clubs

Share capital social clubs (“social clubs”) under the Ontario Corporations Act have until October 19, 2026 to continue under the Ontario Not-for-Profit Corporations Act, 2010, the Co-operative Corporations Act, or the Business Corporations Act. To assist with continuance of social clubs, the Government of Ontario released a draft bill proposing amendments to the Corporations Act to simplify voting requirements to authorize the continuance. A public consultation on the draft bill was held between July 26, 2023 and August 9, 2023.

Currently, to approve continuing under these legislations, each class of shareholder of a club must vote separately by class. Depending on the shareholding class structure, the process to notify shareholders and facilitate voting for all classes may be complex and time-consuming. As well, a failed vote for continuance could lead to a forced dissolution of the club. In response to these concerns, the proposed amendments would remove the requirement that each class of shareholder vote separately as a class and clarify that only a social club’s shareholders entitled to vote may vote to authorize the continuance.

The proposed changes, if passed, are intended to reduce the risk of dissolution of social clubs, so that they can continue to operate and serve their members and communities, as well as reduce burden on social clubs by simplifying the voting process. This would also align the Corporations Act with continuance provisions in other Ontario business law legislation. 

Amendments to Ontario Co-operative Corporations Act Regulations

Sections 21 and 22 of Ontario Regulation 178: General (“Regulation 178”) under the Co-operative Corporations Act (the “Co-op Act”) will be revoked as of October 1, 2023, pursuant to Ontario Regulation 192/23, which was filed on July 20, 2023.

Section 21 of Regulation 178 currently provides that a notice or other document cannot be sent electronically by a co-operative to a member or director pursuant to clause 172(1)(b) of the Co-op Act where the co-operative is a non-profit housing co-operative. Similarly, section 22 of Regulation 178 currently provides that a notice or other document cannot be sent electronically by a member or director of a co-operative to the co-operative pursuant to clause 172(2.1)(b) of the Co-op Act where the co-operative is a non-profit housing co-operative. The revocation of these sections is expected to better facilitate electronic delivery of notices under the Co-op Act.

Further Amendments to BC Societies Act in Force

Certain amendments to the British Columbia Societies Act were brought into force on July 7, 2023, pursuant to Order in Council No. 419. As most recently discussed in the May 2023 Charity & NFP Law Update, changes were made to the Societies Act by way of the Societies Amendment Act, 2021, to make the Societies Act more accessible and consistent and to address uncertainties and omissions in the Act.

Order in Council No. 419, which was approved and ordered on July 7, 2023, ordered that sections 9, 31, 32, 36 to 45, 47, 48, 50, 52, 62, 70, 74, 85 to 87, 108 and 109 of the Societies Amendment Act, 2021, be brought into force, amending the Societies Act.


Read the August 2023 Charity & NFP Law Update