Learn how to prepare a request to amalgamate two or more not-for-profit corporations under the Canada Not-for-profit Corporations Act (NFP Act).
Although the information provided here will assist you in completing the amalgamation process quickly and accurately, it is not intended to replace legal advice. You may wish to consult a lawyer or other professional advisor to ensure that the specific needs of your not-for-profit corporation are met.
What is an amalgamation?
An amalgamation is a process in which two or more corporations ("amalgamating corporations") governed by the NFP Act merge and carry on as one corporation ("amalgamated corporation").
There are two ways to amalgamate under the NFP Act:
- A long-form amalgamation requires each amalgamating corporation to sign an amalgamation agreement and submit it for approval at a meeting of members. The amalgamation agreement sets out the terms and means of effecting the amalgamation and must include:
- the provisions required in the Articles of Amalgamation and in the by-laws related to the conditions of membership;
- the name and address of each proposed director of the amalgamated corporation;
- how memberships of each amalgamating corporation will be converted into memberships in the amalgamated corporation;
- the proposed by-laws, whether new or the by-laws of one of the amalgamating corporations;
- details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated corporation.
The Articles of Amalgamation include whatever has been agreed to in the amalgamation agreement.
- A short-form amalgamation is often faster since the amalgamation is approved by a resolution of the directors and does not require members' approval:
- A vertical short-form amalgamation involves a holding corporation and one or more wholly-owned subsidiaries. The Articles of Amalgamation must be the same as the articles of the amalgamating holding corporation, except for the name which may be different.
- A horizontal short-form amalgamation involves two or more wholly-owned subsidiaries of the same holding corporation. The membership of all but one of the subsidiaries will be cancelled as part of the amalgamation with no repayment of capital in respect of those memberships. The Articles of Amalgamation must be the same as the articles of the amalgamating subsidiary corporation whose membership is not cancelled, except for the name which may be different.
What documents must be filed to amalgamate two or more corporations?
An application to amalgamate must include the following:
- a completed and signed copy of Form 4009 — Articles of Amalgamation (See available instructions);
- a completed and signed copy of Form 4002 — Initial Registered Office Address and First Board of Directors (See available instructions);
- a statutory declaration from a director or officer of each amalgamating NFP corporation (see a sample statutory declaration);
- a Nuans Name Search Report, unless the amalgamated corporation will use the corporate name of one of the amalgamating corporations;
- the filing fee.
The articles can be in English or French or in a format that employs both English and French.
What must be included in the statutory declaration?
The statutory declaration must include statements to the effect that on the effective date of the amalgamation:
- each amalgamating corporation is, and the amalgamated corporation will be, able to pay its liabilities as they become due;
- the realizable value of the amalgamated corporation's assets will not be less than the aggregate of its liabilities; and
- either a or b:
- there are reasonable grounds for believing that no creditor will be prejudiced by the amalgamation; or
- that adequate notice has been given to all known creditors of the amalgamating corporation and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.
The statutory declaration must be signed by a director or officer of each amalgamating corporation. The effective date of the amalgamation is the date when Corporations Canada receives your application for amalgamation or any later date requested.
Can a provincial corporation amalgamate with a federal corporation?
An application for amalgamation requires that all the amalgamating corporations are incorporated under the NFP Act. If a corporation is incorporated under another statute, it must first continue to the NFP Act before it can amalgamate with the other corporationsFootnote 1. See Continuing (Import) a Not-for-profit Corporation.
To facilitate the process, Articles of Continuance can be filed with Articles of Amalgamation. Since the NFP Act only applies once a Certificate of Continuance has been issued, the meeting to pass the resolution to amalgamate must meet the NFP Act requirements for a meeting of members.
Sample Statutory Declaration
IN THE MATTER OF THE
CANADA NOT-FOR-PROFIT CORPORATIONS ACT
IN THE MATTER OF ARTICLES OF AMALGAMATION
FILED PURSUANT TO SECTION 208 IN THE NAME
I, , of the City of in the Province of ,
DO SOLEMNLY DECLARE that:
- I am a director or officer of , an amalgamating corporation and I have personal knowledge of the matters herein deposed to.
- I am satisfied that there are reasonable grounds for believing that on the effective date of the amalgamation:
- each amalgamating corporation can and the amalgamated corporation will be able to pay its liabilities as they become due;
- the realizable value of the amalgamated corporation's assets will not be less than the aggregate of its liabilities, and
- no creditor will be prejudiced by the amalgamation or that adequate notice has been given to all known creditors of the amalgamating corporation and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.
AND I make this solemn declaration conscientiously believing it to be true, and knowing that it is of the same force and effect as if made under oath.
DECLARED before me
City of ,
in the Province of
this day of , 20
(print full name)
Commissioner for oaths
(print full name)
Director or Officer