As everyone with a federally incorporated not-for-profit organization knows by now, corporations governed by the Canada Corporations Act ("CCA") have until October 17, 2014 to continue under the Canada Not-for-profit Corporations Act("CNCA"). Does that mean they will automatically dissolve on October 18th if they fail to continue?
On its website, Corporations Canada states that all not-for-profit corporations under the CCA must transition before October 17, 2014, failing which they will be assumed to be inactive and will be dissolved.
Corporations Canada has indicated, however, that dissolution will not be immediately effective as at October 17, 2014. Rather, this is the date that the Director under the CNCA has the authority to dissolve corporations for not transitioning to the CNCA. In other words, a corporation that has not continued by October 17, 2014 will not be automatically dissolved, but certain steps will be taken that could ultimately lead to dissolution.
This process will include sending notices of intent to dissolve to corporations to inform them that they have 120 days to transition or they will be dissolved. These are referred to as Pending Dissolution Notices. Corporations that do not respond to these notices will be assumed to be inactive and will be dissolved. A corporation that is dissolved will also be able to apply for a revival under the CNCA and transition at the same time.
We still recommend taking action to continue before the October 17, 2014 deadline, but it may be some comfort to know that a failure to do so is not likely to lead to automatic dissolution.