NFP Act Webinar PPT - Sport Law & Strategy Group
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Transcript NFP Act Webinar PPT - Sport Law & Strategy Group
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
Board
•
•
•
•
•
8 classes of members
3 autonomous councils, each
with power to define their
membership
4 AGMs each year!
•
•
9 directors
6 directors are appointed
(2 from each council)
1 director is ex-officio
Only 2 are elected!
Objects/Purposes
Name
•
•
•
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
For more information, visit:
http://www.sportlaw.ca/nfp-act/