Not for Profit Continuances

It’s No Longer About the Money – Continuing a for-Profit Corporation into a Not-for-Profit Corporation

At times, the aims of a corporation can change. For example, a corporation may wish to become a not-for-profit corporation to better align itself with its actual working. Rather than dissolving its current form and starting a new corporation, the corporation can be continued as a not-for-profit corporation. This articles will discuss how a for-profit corporation, such as a corporation incorporation under Ontario’s Business Corporations Act, R.S.O. 1990, c. B.16 (“OBCA”) or the Canada Business Corporations Act (R.S.C., 1985, c. C-44) (“CBCA”) can continue under Ontario’s Corporations Act, R.S.O. 1990, c. C.38  (“OCA”) or the Canada Not-for-profit Corporations Act (S.C. 2009, c. 23) (“CNFP”).

A continuance allows a corporation to essentially reincorporate under another legislation. Rather than dissolving and incorporating again, the corporation continues from one legislation, such as the OBCA, into another, such as the OCA so that it is governed by that other legislation as though it were incorporated under it. The process results in the corporation being exported out of one legislation and being imported into another.

Moving from the OBCA to the OCA (an Ontario not-for-profit Corporation)

Continuing from an Ontario for-profit corporation to an Ontario not-for-profit corporation is significantly easier than continuing from an Ontario for profit corporation to a Canada not-for-profit corporation. Currently, Ontario’s Not-for-Profit Corporations Act, 2010, S.O. 2010, c. 15 is not yet in force. Therefore, if an Ontario for-profit corporation wishes to continue as a not-for-profit corporation in Ontario it must continue into the OCA. This can be accomplished by completing Form 12.1 Application for Continuation which can be found CA – Form 12.1. Form 12.1 must be accompanied, in duplicate, with the following supporting documents:

  • An “Ontario biased” name search report, if the Corporation is to be continued under a different corporate name. This is not required if the only change to the corporate name is the deletion of the legal element (e.g. Limited, Incorporated, Corporation, Ltd., Inc. or Corp.). This report must be submitted within 90 days of production of the report. More information on obtaining this Ontario based search can be found here.
  • A Certified Copy of a shareholder resolution of an extract from the minutes of a general meeting of the shareholders/members indicating unanimous approval of the application for continuation. The resolution must also provide for the cancellation of all shares of the corporation upon issuance of the Letter Patent of Continuation.
  • The fee for Continuance.

For more information, please consult Form 12.1 Application for Continuation. Documents can be dropped off in person at:

  • Central Production and Verification Branch Ministry of Government and Consumer Services 393 University Avenue, Suite 200 Toronto, Ontario M5G 2M2

Although they do not give legal advice, the individuals staffing this Branch are some of the knowledgeable people in the province when it comes to the OBCA.

Moving from the CBCA to the CNFP (an Canada not-for-profit Corporation)

Continuing from the CBCA to the CNFP is easy. To accomplish this you will need to submit the following documents which can be submitted by email to [email protected].  These documents can also be submitted by fax or regular mail. More information can be found here.

1. Covering letter giving a contact name, return address and telephone number

The package should be covered with a letter containing your contact name, return address and telephone number. The letter should also state what you are trying to accomplish.

2. Form 4011 – Articles of Continuance (import)

A completed and signed copy of Form 4011 – Articles of Continuance (import). This form can be found here. More information on how to complete the form can be found here.

3. Form 4002 – Initial Registered Office Address and First Board of Directors

A completed and signed copy of Form 4002 – Initial Registered Office Address and First Board of Directors. This form can be found here. More information on how to complete the form can be found here.

4. A Federal Nuans Name Search

A Nuans name search report for the proposed name of the corporation that is not more than 90 days old. When incorporating a new business, the government of the jurisdiction where you intend to incorporate will review and approve your proposed corporate name. This costs $13.80, is usually available immediately, and can be accessed here.

5. Filing Fee

You will be required to pay the filing fee of $250.00. Do NOT email Corporation Canada your credit card number. Rather, provide your phone number in the covering letter and they will call you for your credit card information.

Moving from the OBCA to the CNFP (an Canada not-for-profit Corporation)

Continuing from an Ontario for-profit corporation to a Canada not-for-profit corporation is significantly more difficult and costly. However, since the legislation, the CNFP is already in place, it may be worth undertaking. To continue an ONCA corporation into the CNFP, there are two main steps: (1) the Export from Ontario and (2) the Import into Canada. The following steps must be undertaken for continuing a OBCA corporation into the CNFP. Different requirements apply to continue different Corporations (non-OBCA Corporation) to the CNFP. More information on the requirements can be found here.

Ontario Export Requirements

An Ontario business corporation that wishes to obtain permission to apply to continue the corporation in a jurisdiction outside Ontario, must submit the following documents to the Central Production and Verification Branch.

1. Covering letter giving a contact name, return address and telephone number

The package should be covered with a letter containing your contact name, return address and telephone number.

2. Form 7 – Application for Authorization to continue in Another Jurisdiction

This Form 7 – 1. Application for Authorization to continue in Another Jurisdiction can be accessed online here. This form must be submitted in duplicate together with the following documents.

3. Consent letter from the Minister of Finance

The first step in continuing a corporation outside of Ontario is obtaining the consent of Ontario’s Minister of Finance. This step ensures that Corporation is not avoiding any tax liabilities by continuing into another jurisdiction. To obtain this consent, the Minister of Finance must be contacted who can be reached by email, fax or regulation mail using the following information:

  • Via Email ([email protected])
  • Fax (905-433-5418)
  • Ministry of Finance Account Management and Collections Branch 33 King Street West P.O. Box 622 Oshawa, Ontario L1H 8H5

Any consent from the Minister of Finance must be submitted within 60 days after the Minister of Finance provides consent. The Ministry if fairly responsive to requests which it usually provided within a week.

4. Consent letter from the Ontario Securities Commission, only if the corporation is an offering corporation

If the Corporation is an offering Corporation, consent form the Ontario Securities Commission will also be required. If you are an offering Corporation, it is very likely that you already have counsel engaged counsel to assist you with this process.

5. Legal Opinion (likely not needed)

This articles discussion continuing a Corporation into another Canadian jurisdiction. However, if you plan on continuing into a non-Canadian jurisdiction you will need a legal option from a lawyer stating that the laws of the other jurisdiction meet the requirements set out in Section 181(9) of the Business Corporations Act.

6. Authorizing Resolution

Although not listed in Form 7 – it is helpful to have the Special Shareholder Resolution which approved this application for continuation on hand.

7. Fee

You will be required to pay the filing fee of $330.00. If you attend in person to drop off the documents, you will be able to pay via Visa, Mastercard or Interac Debit. Otherwise, a cheque is required. For more information on who to make the cheque payable too, please review Form 7.

Canada Import Requirements

Once the Ministry of Government and Consumer Services has accepted your application, you must now apply to Corporations Canada to have your corporation imported into the CNCA. To accomplish this you will need to submit the following documents which can be submitted by email to [email protected]. These documents can also be submitted by fax or regular mail. More information can be found here.

1. Covering letter giving a contact name, return address and telephone number

The package should be covered with a letter containing your contact name, return address and telephone number. The letter should also state what you are trying to accomplish.

2. Form 4011 – Articles of Continuance (import)

A completed and signed copy of Form 4011 – Articles of Continuance (import). This form can be found here. More information on how to complete the form can be found here.

3. Form 4002 – Initial Registered Office Address and First Board of Directors

A completed and signed copy of Form 4002 – Initial Registered Office Address and First Board of Directors. This form can be found here. More information on how to complete the form can be found here.

4. A Federal Nuans Name Search

A Nuans name search report for the proposed name of the corporation that is not more than 90 days old. When incorporating a new business, the government of the jurisdiction where you intend to incorporate will review and approve your proposed corporate name. This costs $13.80, is usually available immediately, and can be accessed here.

5. A Document indicating Approval of the Continuance

You must include your stamped Form 7 – Application for Authorization to continue in Another Jurisdiction that you received from the Ministry of Government and Consumer Services.

6. An excerpt of the relevant provisions of the legislation

An excerpt of the relevant provisions of the legislation under which the body corporate currently exists showing that the continuance is permitted being OBCA. This excerpt is accessible Business Corporations Act, R.S.O. 1990, c. B.16 – Relevant Provisions.

7. A Signed Legal Opinion

A signed legal opinion by counsel qualified to practice in the jurisdiction where the body corporate is incorporated stating that:

  • the exporting legislation allows the continuance to the NFP Act
  • once the body corporate is continued into the NFP Act, the non-federal legislation will cease to apply to it, and
  • the body corporate meets all the requirements for the continuance into the NFP Act.

Please contact Pawlina Law who can provide you with this legal opinion.

8.Filing Fee

You will be required to pay the filing fee of $250.00. Do NOT email Corporation Canada your credit card number. Rather, provide your phone number in the covering letter and they will call you for your credit card information.

Final Step

Upon receiving your articles of continuation form Corporation Canada, your final step in this process is advising Ontario’s Ministry of Government and Consumer Services that the continuation is complete. The corporation must file a copy of the articles of continuance issued to it by the other jurisdiction, within 60 days after the date of issuance. The corporation will appear on the public record as an Ontario corporation until the Central Production and Verification Branch receives a copy of the instrument of continuance. Upon receiving a copy of the continuance, the Ontario Business Information System will be updated to show the new jurisdiction of the corporation and the status of the corporation will be changed to inactive. To accomplish this final step, simply mail a copy of the instrument of continuance with a covering letter to:

  • Corporate Returns Central Production and Verification Branch Ministry of Government and Consumer Services 393 University Avenue, Suite 200 Toronto, Ontario M5G 2M2

Conclusion

Pawlina Law is a Toronto based corporate law firm. We understand the intricacies of Corporate laws and regulations. We are ready to help ensure your continuation goes smoothly. Please do not hesitate to contact us so that we can assist you with your continuation.