On March 12, 2023, The Non-Profit Corporations Act, 2022 (the "New Act") came into force in Saskatchewan. The New Act replaces The Non-Profit Corporations Act, 1995, SS 1995, c N-4 (the "Old Act").
The New Act has been enacted in response to the many legal and cultural changes that have taken place in Saskatchewan and other jurisdictions and modernizes the law for non-profit corporations in many ways. Below we summarize some of these changes, which include updates to directors’ qualifications, reporting requirements, as well as updates providing for the ability to use electronic documents, communications, and signatures in conducting business for the non-profit.
Director Requirements:
Under the Old Act, at least 25% of a non-profit’s directors needed to be resident Canadians and at least one director had to reside in Saskatchewan – the New Act removes both of these requirements. Additionally, under the New Act, individuals are disqualified from acting as a director of a corporation, where they have been convicted of an offence that is business-related or involving fraud.
Reporting Requirements:
Several important reporting changes allow more time and flexibility for non-profits to determine when and how they report. The reporting period for financial statements has been extended from four to six months before the AGM. Additionally the timeline for filing annual returns and financial statements has been extended from five to seven months after the non-profits’ fiscal year end.
Audits:
The qualifications of an auditor or reviewer, and the criteria for requiring an audit or financial review have also been changed. Non-profits can no longer appoint a non-accountant as the auditor or reviewer, however to offset the impact of this, particularly on smaller non-profits, the thresholds for when a non-profit requires an audit or financial review have been significantly increased.
Electronic Communications:
Modernizing the legislation to reflect how businesses operate, communicate with their members, and hold meetings by facilitating the use of technology and electronic communication is also a significant benefit of the New Act. It may be necessary to make changes to certain corporation's charter documents to take full advantage of this new flexibility.
This represents a brief summary of some of the most significant changes in the New Act, but is far from a complete review. If you have questions regarding any of the above, please contact our Business and Corporate Law lawyers. We would be happy to provide you with additional information.
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