After you incorporate under the Not-for-profit Corporations Act (NFP Act), you need to establish the internal organization of the corporation.
On this page
- First directors' meeting
- Possible actions to be taken at first meeting of directors
- First members' meeting
- Provincial and territorial registrations
- Business number
- Permits and other formalities
First directors' meeting
After incorporation, the incorporators or first directors are required to call an "organizational meeting" of the directors. The purpose of this first meeting of the directors is to organize the corporation by adopting a number of resolutions that will allow the corporation to conduct its activities. A minimum of five days' notice of this meeting must be given to each director listed in Form 4002 – Initial Registered Office Address and First Board of Directors (see Federal corporation forms).
This notice must indicate the date, time and place of the meeting. A director can waive (that is, voluntarily refrain from insisting on) notice of the meeting, and the attendance of a director at the meeting is equivalent to a waiver of the notice of meeting (refer to subsections 127(3) and (4) of the NFP Act and section 27 of the Canada Not-for-profit Corporations Regulations (NFP Regulations)).
At this first meeting, the directors can take the following actions (refer to subsection 127(1) of the NFP Act):
- make by-laws
- maintain corporate records and issuing debt obligation certificates
- authorize the issuance of debt obligations
- appoint officers
- appoint an interim public accountant
- issue memberships
- make banking arrangements
- transact any other business.
Instead of holding a first meeting of the directors, the directors can alternatively sign organizing resolutions to deal with all of the above matters. This is especially suitable if the number of directors is small. If all directors sign a written record of resolutions on the above matters, then a meeting of the first directors is not necessary. A copy of the resolutions must be kept with the minutes of the meetings of directors (see Organizing resolutions of directors for adoption at first meeting of the directors; you can also refer to subsections 127(5) and (6) of the NFP Act).
Possible actions to be taken at first meeting of directors
The directors need to consider the following actions at their first meeting.
As soon as possible after incorporation, a corporation will need to adopt a set of rules concerning the governance and operations of a corporation. These rules are set out in the by-laws of the corporation. In this regard, the first directors will need to adopt "general by-laws" at the first meeting of the directors.
If a corporation wants to put in place certain rules that are not dealt with in the NFP Act or to modify some of the rules that are in the NFP Act, it can do so, as long as the changes made are permitted by the NFP Act (see Default rules).
Examples of issues that can be dealt with in by-laws include:
- the date of a corporation's financial year-end
- the process and special requirements for banking arrangements
- the qualification requirements for memberships
- the process for appointing officers, as well as the rules regarding their qualifications and duties
- the procedures for calling and conducting directors' and members' meetings
- the minimum number of directors and members required to establish quorum at meetings
- the process for amending by-laws
- the rules limiting the modifications that can be made to the powers given to directors under the NFP Act.
By-laws can be amended from time to time, for various reasons. For example, a corporation might want to change the qualification requirements for its officers, or the quorum requirements for members meetings. The process for amending by-laws differs depending on the subject matter of the changes (see By-laws for information on changing by-laws).
With some exceptions, general by-laws adopted at the first meeting of the directors take effect immediately, although they are subject to confirmation at the first meeting of the members. After confirmation by the members, a copy of the by-laws must be filed with Corporations Canada within 12 months (refer to sections 152 and 153 of the NFP Act, and section 60 of the NFP Regulations).
Maintain corporate records and issuing debt obligation certificates
The list of corporate records that are required to be kept includes registers of members, directors and officers and minutes of member and director meetings. Although there is a general requirement for the corporation to keep certain records at its registered office, it is also permissible to keep these records at another location, provided that the requirements of the NFP Act are met. At the first meeting of the directors, they will need to decide how these records are to be maintained and what rules, if any, will govern their maintenance (see Corporate records and filing obligations).
Authorize the issuance of debt obligations
If a corporation intends to issue debt obligations after incorporation (for ex., bonds, debentures, notes or other evidences of indebtedness or guarantees of a corporation), this will have to be authorized by the directors at their first meeting. Future debt obligations will also have to be authorized by the directors at future meetings.
Officers are appointed by the directors to assist the directors and to carry out functions delegated to them. Officers should be appointed at the first meeting of the directors. Officers can be replaced at the discretion of the directors at any point in the future (see The directors).
Appoint an interim public accountant
The NFP Act contains a general requirement that the members of a corporation incorporated under the NFP Act must appoint a public accountant by ordinary resolution (that is, a simple majority of the votes cast) at each annual meeting (refer to subsection 181(1) of the NFP Act). The NFP Act also contains rules regarding who can be appointed, and the circumstances in which such an appointment is not required (refer to sections 180-182 of the NFP Act). Since the power to appoint a public accountant is vested with the members, the first directors can appoint an interim public accountant who holds office until the first meeting of the members (see Financial statements and review).
One of a corporation's first activities following incorporation is to issue memberships. A person becomes a member when a corporation admits that person as a member of the corporation and "issues" a membership in that person's name. At the first meeting of the directors, memberships will need to be issued to qualified persons who meet the membership conditions contained in the by-laws. If the articles of incorporation provide for two or more classes or groups of members, memberships can be issued to different classes of members who meet the requirements set out in the by-laws. Additional memberships can be issued in the future (see The members; you can also refer to sections 154 and 155 of the NFP Act).
Make banking arrangements
Once the corporation has been incorporated, it will need to choose a financial institution to meet its corporate banking needs. At their first meeting, the directors should adopt the banking resolutions that are required by the financial institution chosen; designate the signing officers for cheques; and determine the processes for conducting other banking business and authorizing signing officers.
Transact other business
Depending on the operations of the corporation, other business decisions might also have to be made at the first meeting of directors. Such decisions could include those that deal with:
- adopting corporate policies
- employing staff
- purchasing insurance coverage
- leasing premises
- purchasing real property.
Another could involve the adoption of preincorporation contracts. In such a situation, a person who enters into a contract in the name of or on behalf of a corporation before it comes into existence is personally bound by that contract. After incorporation, the corporation can adopt the contract so that the corporation will become bound by the contract as if the corporation had been in existence when the contract was entered into, while the person ceases to be bound (refer to section 15 of the NFP Act).
Depending on the nature of these decisions, some might require member approval and others might not.
First members' meeting
After the organizational meeting of the first directors, an organizational meeting of the members is required. Although most of the corporation's initial organizing business can be dealt with by the directors at their first meeting, certain matters might not be decided by the directors or might have to be confirmed by the members. With this in mind, the first directors of a corporation must call the first members' meeting within 18 months of the date of incorporation, that is, the effective date on the certificate of incorporation (refer to section 160 of the NFP Act and subsection 61(1) of the NFP Regulations). This meeting is usually held immediately after the first organizational meeting of the directors.
At this meeting, the members:
- elect directors
- confirm, modify or reject the general by-laws established by the first directors
- appoint a public accountant, who can be the same one appointed by the first directors or a different one
- adopt special by-laws, if any
- transact other business.
Similar to the first meeting of the directors, the members can also adopt these initial organizing resolutions in writing, instead of holding a members' meeting, provided that the written resolutions are signed by all members (see Organizing resolutions of members for adoption at the first meeting of members; you can also refer to section 166 of the NFP Act).
Provincial and territorial registrations
Once a not-for-profit corporation has been incorporated federally, you will likely need to register the corporation in the province(s) or territory(ies) where the corporation carries on its activities. While incorporation creates a legal entity, provincial and territorial registrations allow the corporation to carry on activities within Canada's individual provinces and territories. There are different types of registrations, such as extra-provincial corporate registrations, business name registrations and fundraising registrations. Provinces and territories often require corporations to register within a few weeks after beginning activities in their jurisdictions.
In addition, some jurisdictions might require annual filings or registrations. A registration or filing fee might also be charged. Carrying on activities in a province or territory can include running a program or fundraising event; having an address, a post office box or phone number; or offering services or products at that location.
The requirements and processes for registration differ greatly among the province(s) or territory(ies) as there is no central registration agency. For example, it is possible that a corporation might need to register in one province but not in another, even though the same activity is carried on in both provinces. Consider contacting the local corporate law administration offices in each province or territory where you plan to carry on activities to determine their individual registration requirements (see Register a federal corporation in a province or territory).
The Business Number (BN) is a unique federal government numbering system that identifies your organization and the accounts you maintain with the Canada Revenue Agency (CRA). The BN consists of a numeric identifier of the organization, followed by a program account identifier. Examples of program accounts that can be registered with the CRA include:
- Goods and Services Tax (GST) and Harmonized Sales Tax (HST)
- registered charitable status (indicated by a charity's registration number)
- payroll deductions
- corporate income tax
- import and export duties and taxes.
When it incorporates your organization, Corporations Canada will ask the CRA to issue a BN for your corporation. The CRA will then register your corporation, and follow-up with a letter that confirms your BN and the program accounts for which you are registered. This letter will also include a summary of the information you have provided (see Registering your business on the CRA website).
Permits and other formalities
You might have to fulfill a number of other requirements in order to carry on certain activities. For example, you might need a provincial permit to carry on activities in a particular sector, such as a bingo licence in order to operate a bingo, a liquor permit in order to serve alcoholic beverages, or lobbying registration in order to conduct certain lobbying activities. Corporations Canada does not provide information on such requirements. Instead, consider checking with the appropriate municipal, provincial, territorial or federal government agencies, as well as professional organizations. You can also consult the Industry Canada Bizpal service for help with your business permit and licensing needs.