In previous newsletters we included articles on the need to register in other parts of Canada if carrying on business there. Not-for-profit corporations all over Canada seem to be increasing their presence in many provinces and territories. Whether their presence is simply to provide members with a local (i.e. provincial or territorial) contact or to actively participate and raise funds in those provinces or territories, not-for-profit corporations aren’t always aware that they may need to register in order to be active in that province or territory.
The following information summarizes some, and by no means all, of the registration and ongoing obligations that stem from operating in jurisdictions other than the one in which the not-for-profit corporation was incorporated. Note that federally incorporated not-for-profit corporations are not necessarily exempted from these requirements. We looked at Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Saskatchewan and Yukon in our Fall 2011 newsletter and consider the requirements in a few more jurisdictions this time.
Under the Corporations Information Act of Ontario, every extra-provincial corporation without share capital that begins to carry on business in Ontario must register. A corporation is carrying on business in Ontario if it:
- has a resident agent, representative, warehouse, office or place where it carries on its business in Ontario;
- holds an interest, otherwise than by way of security, in real property situate in Ontario; or
- otherwise carries on business in Ontario.
Pursuant to the Corporations Information Act, the corporation must file an annual return.
A corporation that is in default of a requirement under the legislation is not capable of maintaining a proceeding in a court in Ontario in respect of the business carried on by the corporation except with leave of the court. This however, does not affect the validity of the contracts entered into by the corporation. A corporation that contravenes the legislation is liable to a fine.
Not-for-profit corporations are required to register under the recently enacted Act Respecting the Legal Publicity of Enterprises if they carry on activity in Quebec, which includes the operation of an enterprise, or possess an immovable real right, other than a prior claim or hypothec, in Quebec.
The corporation must designate an attorney residing in Quebec if it is not domiciled or does not have an establishment in the province.
Once registered, the registrant is required to file a yearly declaration and pay an annual registration fee. A corporation that contravenes the legislation is liable to a fine.
As evidenced above, there are slight variations in the registration requirements from one jurisdiction to another. However, one aspect that seems to remain constant is the liability to a fine if the jurisdictional legislation, which often includes the requirement to register, is contravened. Additionally, filing requirements also vary in terms of the information required, the fees, the name searches that must be done, etc.
As such, prior to operating in a jurisdiction other than the one in which the not-for-profit corporation was incorporated, corporations are encouraged to consider the requirements and seek legal advice to fully understand the implications at the outset and in the long run.