Glossary for the new Canada Not-for-profit Corporations Act
Address of a director
The address of a director must be a residential address or other address for service. An address for service is an address where legal documents must be accepted by the director or someone on their behalf, and where an acknowledgement or delivery receipt can be provided, if required. An address for service can be the residential address of the director or a business address.
Two corporations are related to, or associated or affiliated with, each other in the following situations:
an affiliate is a corporation that is a subsidiary of another corporation;
if a corporation has two subsidiary corporations, the two subsidiaries are affiliates of each other; or
if two corporations are controlled by the same person, the two corporations are also affiliates of each other.
A transaction in which two or more corporations merge to form one corporation.
The date on which the corporation was created (e.g., date of incorporation or amalgamation) or continued under the NFP Act.
A meeting of members which is required to be held each year to consider financial statements and the public accountant's report, elect directors and appoint the public accountant.
An annual return is a document that includes information about a corporation that must be filed within 60 days of the corporation's anniversary date. The anniversary date of a corporation is the date that it was incorporated under the NFP Act or the date that it first came under the jurisdiction of the NFP Act (i.e., the date of continuance or amalgamation). This form should not be confused with:
the corporation's annual financial statements or annual reports;
the annual information return required under the Income Tax Act (Canada) for registered charities; or
the annual income tax return required under the Income Tax Act (Canada) for non-profit organizations or other corporations.
An arrangement is a transaction authorized by the NFP Act that allows a court to supervise a fundamental change to one or more corporations that is not possible to complete under any other provision of the statute.
The legal document that governs the identity of a corporation under the NFP Act is known as the corporation's Articles. It includes the corporation's original or restated Articles of Incorporation, Continuance or Amalgamation (which create the corporation), and all subsequent corporate changes under the NFP Act (i.e., Articles of Amendment, Reorganization, Arrangement, Dissolution or Revival).
Articles of Incorporation
To incorporate under the NFP Act, the incorporator(s) must file Form 4001 – Articles of Incorporation with Corporations Canada. When filed and appended to a Certificate of Incorporation, Form 4001 – Articles of Incorporation, creates the corporation and sets out important matters such as the corporate name, the province in which the registered office is located, the purpose of the corporation and the name(s) of the incorporator(s).
An audit engagement is the process of engaging an independent public accountant to examine the accounting records and other evidence supporting the financial statements; to prepare financial statements; and to render a professional opinion that the financial statements present a fair picture of the organization's financial position and its activities during the period in which the audit was carried out.
Someone who has relevant knowledge of a corporation and who has been authorized by the directors, or as appropriate, by the incorporators of that corporation to sign a particular form.
Auto-returned applications refer to online applications for which a certificate is issued automatically, without an examination of the articles. Instead, the articles are validated by the electronic system. The articles must consist solely of provisions that either do not need to be approved or that have already been approved by Corporations Canada.
A person (individual or corporation) who has made an assignment into bankruptcy under the Bankruptcy and Insolvency Act (BIA), or against whom a bankruptcy order has been made under the BIA, and who has not been discharged from bankruptcy.
The terms "body corporate" and "corporation" mean the same in that both are entities created by statute as legal persons with rights and obligations. However, "body corporate" is used in the laws administered by Corporations Canada to mean a corporation created by a corporate law other than one administered by Corporations Canada.
The by-laws of a corporation are the rules adopted by the directors and members to govern the internal operations of a corporation. A corporation may want to have rules to address issues that are not dealt with in the NFP Act or to modify some of the rules contained in the NFP Act (Note: Such modifications must be of a type permitted by the NFP Act.) Examples of issues that can be dealt with in by-laws include the procedures for: calling and conducting directors and members meetings; appointing officers; and establishing the qualifications and duties of officers.
Certificate of amendment
A certificate of Amendment is issued by Corporations Canada upon an amendment under the NFP Act. The amendment becomes effective on the date shown on the certificate.
A combined name is a legally designated corporate name that combines the English and French form into one name so that the English and the French forms cannot be used separately. Examples: Fondation CanVision Foundation or AWSA Association AENH.
Compilation is the process by which unaudited financial information is compiled to produce financial statements that are based on information provided by the organization. A compilation does not provide any assurances as to the accuracy or veracity of the financial statements since there has been no audit or review engagement done. The NFP Act does not require a public accountant to produce a compilation, although the financial statements must be prepared in accordance with the Canadian generally accepted accounting principles (GAAP) as set out in the Canadian Institute of Chartered Accountants Handbook.
A corporation is required to keep certain records at its registered office or at some other location in Canada chosen by the board of directors. These records must include the following:
all articles of the corporation, (e.g., Articles of Incorporation, Articles of Continuance, Articles of Amalgamation); by-laws and their amendments; and unanimous members agreements;
minutes of meetings of members and committees of members;
resolutions of members and committees of members;
if any debt obligations are issued by the corporation, a debt obligations register;
a directors' register;
an officers' register; and
a members' register.
A confirmation number is given by Corporations Canada when it approves a request for a name pre-approval. It is on the letter of approval from Corporations Canada.
Corporations Canada is the branch of Industry Canada that administers the NFP Act and several other corporate laws governing federal companies. To incorporate a corporation under the NFP Act, or to maintain such a corporation under the NFP Act, the required forms and documents must be filed with Corporations Canada.
Credit cards accepted by the Government of Canada
Director (e.g., a member of the board of directors)
A director is an individual elected by the members to supervise the management of a corporation. Together, all directors of a corporation are referred to as the “board of directors.” Under certain circumstances, the NFP Act also permits directors to be appointed by the board. Generally, a corporation must have at least one director. However, a soliciting corporation must have at least three directors.
Director appointed under the NFP Act
The Director appointed under the NFP Act is an individual appointed by the federal Minister of Industry under the NFP Act to administer the NFP Act. This person is the head of Corporations Canada.
An individual is disqualified from being a director of a corporation if the person is less than 18 years old, has been declared incapable under the laws of a Canadian province or territory, or by a court in a jurisdiction outside Canada, or has the status of bankrupt.
Dissolution is the act of ending the existence of a corporation. It can be done voluntarily by the corporation by meeting the requirements for dissolution in the NFP Act and filing the required documents with Corporations Canada. A corporation can also be dissolved administratively by Corporations Canada for failing to comply with the legislation. The liquidation and dissolution of a corporation can also be ordered by a court.
Federal incorporation is the act of incorporating under a federal statute, such as the NFP Act, rather than under a provincial or territorial statute.
Fixed number of directors
A fixed number of directors refers to a corporation that has a specific number of directors rather than a maximum and a minimum number of directors set out in its articles (for example, ten directors rather than a maximum of 12 directors and a minimum of eight directors).
A fundamental change is a major change to an existing corporation (e.g., a change to its articles of incorporation) or a corporate reorganization that results in a different entity being created. For example, when two corporations amalgamate (i.e., join to become one entity), a new corporation is created that retains all of the property, assets, liabilities and responsibilities of the individual corporations.
An incapable individual is someone who is found unable to manage their property, other than by reason of minority, under the laws of a Canadian province or territory, or declared to be incapable by any court in a jurisdiction outside Canada.
Incorporation is the act of forming or creating a corporation, by filing the required documents.
Incorporators are the persons who create a corporation. A company or body corporate can be an incorporator.
A member of a corporation is a person who has been admitted into membership in the corporation and who has a number of rights by virtue of membership in the corporation. These rights are set out in the NFP Act, as well as in the articles and by-laws of the corporation, and include the right to vote, to obtain information, and to attend meetings. The NFP Act does not define who is a member; since that is a matter for each corporation to decide in its by-laws through the establishment of conditions of membership.
The members of a corporation are collectively referred to as the membership of the corporation.
The conditions for membership are the criteria or requirements that a corporation will use to determine who is eligible to be a member of a corporation or of a particular class or group of members. The conditions of membership are usually set out in the corporation's by-laws. Examples of membership conditions are available in the Model By-laws.
The NFP Act is the Canada Not-for-profit Corporations Act, the statute that governs federally incorporated non-share capital not-for-profit corporations.
Notice of refusal
A notice of refusal is given by Corporations Canada in response to a request for a Certificate of Compliance or a Certificate of Existence for a specific federal corporation where it has been determined that the corporation does not meet the requirements for the certificate.
Nuans Name Search Report
A document that includes a list of business names and trade-marks that sounds similar to the name being proposed. The list is drawn from Nuans, the national data bank of existing and reserved business names as well as trade-marks registered and applied for in Canada.
Nuans Name Search Report report reservation number
A Nuans Name Search Report reservation number is the 8-digit number found on the Nuans Name Search Report or on the Nuans Name Search Report submission receipt.
A numbered name is the corporate name assigned to a corporation by Corporations Canada at the request of the corporation. It is composed of three parts: an assigned number, the word "Canada" and a one of the prescribed words: Association, Center, Centre, Fondation, Foundation, Institut, Institute or Society.
An officer is an individual appointed by the director(s) of a corporation to manage the day-to-day activities of the corporation. The position of an officer – which includes such posts as president, vice president, secretary, and treasurer – is distinct from that of a director. In the case of a soliciting corporation, at least two of the directors must not be officers of the corporation.
An ordinary resolution means a resolution passed by a majority (for example more than 50%) of the votes cast at a meeting.
Personal information bank
In order to manage information under the terms of the Privacy Act and the Access to Information Act, the federal government puts personal information into collections or groupings called banks that are managed by Info Source, a government agency. This system allows the government to easily determine which parts of the personal information it has collected can be released.
A public accountant is a person who meets the qualifications set out in the NFP Act. These qualifications are:
be a member in good standing of a provincial branch of the Chartered Accountants of Canada (CA), Certified General Accountants (CGA) or Certified Management Accountants (CMA);
have any provincial licenses required to conduct an audit or review engagement in the province where the financial review will take place; and
be independent of the corporation.
A quorum is the minimum number of people entitled to attend a meeting who must be present for business to be conducted. In cases where the quorum for a board meeting is not set out in the articles or by-laws, a majority of the number of directors or minimum number of directors required by the articles constitutes a quorum. Similarly, if the quorum for a members meeting is not set out in the by-laws, a majority of the members entitled to vote at the meeting constitutes a quorum.
An organization that has applied to the Canada Revenue Agency and received approval as meeting the requirements for registration as a charity, and has been issued a charitable registration number.
The registered office is the legal address of a corporation. It cannot be a post office box.
A Request ID is the number given by Corporations Canada to every request. You can find it on every email or letter sent by Corporations Canada in response to a request.
Residential address or other address for service
An address for service is an address where legal documents must be accepted by the director or someone on their behalf, and where an acknowledgement or delivery receipt can be provided, if required. An address for service can be the residential address of the director or a business address.
Generally, a resolution is a formal expression of the opinion or will of a body that is adopted by a vote. The meaning of the term resolution can vary, depending on the context, i.e., it can mean:
a written record of decisions taken in lieu of an organizational meeting of the directors;
a decision made at a members or directors meeting, based on the required number of votes in favour by the persons entitled to vote; or
a document signed by all directors/members in lieu of a meeting of the directors/members.
Restated Certificate of Incorporation
A Restated Certificate of Incorporation is issued by Corporations Canada upon a consolidation of a corporation's original articles and all subsequent amendments. The consolidation takes effect on the date shown on the certificate.
If an audit is not mandatory, financial statements may be prepared through a review engagement. A review engagement is the process of engaging an independent public accountant to prepare financial statements on a review basis. The accountant will not express an opinion on the fairness of the financial statements, but will only provide a limited assurance that the financial information is plausible and conforms to generally accepted accounting principles.
A document where property or other assets are given or pledged to guarantee the fulfillment of an obligation. For example, a mortgage on a building is given as security for a loan.
A special resolution is a resolution that is passed by at least two-thirds of the votes cast at a meeting.
A written statement that is declared to be true in the presence of a qualified official who has the authority to administer an oath or solemn declaration (e.g., a commissioner for oaths, notary public, lawyer, etc.).
The submission date is the date on which an online request is submitted to Corporations Canada. Corporations Canada will consider an online request to have been received on the submission date.
Unanimous members agreement (UMA)
A written agreement among all of the members of a corporation that restricts in whole or in part the powers of the directors to manage the activities and affairs of the corporation.
Written resolution in lieu of a meeting
A document signed by all of the members of a corporation in lieu of a meeting of the members.