NFP Act Webinar PPT - Sport Law & Strategy Group

January 5, 2018 | Author: Anonymous | Category: Social Science, Political Science
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Not-for-Profit Corporations Act Webinar Presentation to Canoe Kayak Canada February 2013

Sport Law & Strategy Group Providing strategic insight to the Canadian sport community through professional services in these areas: Legal Solutions Planning & Governance Strategic Communications

“The Perfect Storm” of 2011  Canada Not-for-Profit Corporations Act – affects all NSOs and MSOs  Sport Canada’s Governance Principles - will affect future funding  Amendments to the Income Tax Act – affects all RCAAAs  Overall trends to improve Canadian sport governance

“Arguably, organization and system mismanagement costs us more medals and more lifelong participants [in sport] than the culprits we prefer to blame, such as limited facilities and funding, or insufficient school sport and activity programs” -

Efficiency Features  NFP Act contains mandatory rules, default rules and alternate rules  Bylaws can be slim as the rules are in the Act  Directors may change bylaws without approval of members, except for ‘fundamental’ changes  Industry Canada will be a storehouse, not a clearing house, for bylaws  Changes to bylaws will take immediate effect

Rationale for New Legislation  Strengthen member rights  Increase accountability  Increase transparency  Improve efficiency  Embrace new technologies  Other provinces will follow (Ontario, B.C.)

Possible Approaches  Avoidance approach – do the minimum to comply with the letter of the law

 Compliance approach – do more to comply with both the letter and the spirit of the law

 Strategic approach – leverage opportunity to review governance model and improve effectiveness … this opportunity will not present itself again in our lifetimes …

Impact #1 - Member Rights Members may pursue more ‘judicial’ remedies Easier for members to ‘requisition’ a meeting Members elect directors Members may remove any, some or all directors by ordinary resolution  Members without voting rights may vote on certain ‘fundamental changes’  In some instances, member classes may vote separately    

Impact #2 - Board Structure The Act requires that members will elect directors … therefore: • ‘Ex-officio’ directors are prohibited • Appointed directors are restricted

Therefore …. You need to Simplify and streamline membership classes Move to an elected Board structure “Organizations may wish to collapse voting member classes into one category, and eliminate non-voting members” - Carters Professional Corporation

CKC Current Reality Membership


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8 classes of members 3 autonomous councils, each with power to define their membership 4 AGMs each year!

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9 directors 6 directors are appointed (2 from each council) 1 director is ex-officio Only 2 are elected!



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Not looked at since 1990 Should be updated to comply with new requirements for RCAAAs

Current name is Canadian Canoe Association Should be updated!

What Other Sports Are Doing  Creating simpler membership structures  Eliminating non-voting individual members, creating ‘registrants’ and ‘honorary officers’  Choosing smaller, policy-based boards  Creating ‘Provincial Councils’ with defined powers  Rethinking committees – ‘standing’ report to Board/’operating’ report to staff  Embracing nomination systems to recruit skilled/competent directors

Challenges Emerging Importance of the transition two-step! Timing of year-end and annual meeting/ conference Meeting CRA’s new requirements of ‘exclusive purpose and function’ Maintaining jurisdiction over individuals/athletes

Some Things to Watch For  Maintaining an effective athlete voice  Failure to consult with stakeholders, or  Stakeholders not engaging in consultation efforts  Evolution to more modern and corporate structures may backfire!  High demand for HQPs

Documents You Must File  Articles of Continuance must contain name, location, # of directors, statement of purpose, classes of members, restrictions on activities, distribution of assets after dissolution  Bylaws must contain conditions of membership, method of giving notice for meetings  If an RCAAA, Canada Revenue Agency has to approve the Articles of Incorporation

Timing Work backwards from October 2014 Member voting at AGMs, SAGMs, Special Meetings, telephone meetings? Communication with members, trust issues Two-step transition needed in most cases Make a plan - and make a back-up plan

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