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Corporate Maintenance

5.1 Annual Meeting
5.2 Election of Directors and Officers
5.3 Quorum for Meetings
5.4 Reporting Requirements
5.5 Penalties for Failure to Comply with Filing Requirements
5.6 Additional Reporting Requirements
5.7 Audit Provisions
5.8 Record Keeping Requirements
5.9 Use of Corporate Name
5.10 Changing Corporate Name
5.11 Use of a Name Other than Corporate Name
5.12 Changing the Authorized Number of Directors
5.13 Changing the Location of the Head Office
5.14 Changing the Objects and Special Provisions
5.15 Income Tax Act Considerations
5.16 Ontario Corporations Tax Branch Requirements
5.17 Dissolution - Surrender of the Charter

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5.1 Annual Meeting

An annual meeting must be held not later than eighteen months after incorporation and subsequently not more than fifteen months after the holding of the last annual meeting. (s. 293)

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5.2 Election of Directors and Officers

Usually the directors are elected annually at the general meeting by the members of the corporation. Directors in office at the time are retired and, if eligible, may seek re-election to resume office for another year. (s. 287(1)(2)).

Generally directors are elected by members, and officers are appointed by the board of directors.

There are three exceptions:

  • ex-officio directors (s. 127)
  • election of directors in rotation (section 287 (5))
  • division of members into territorial or common interest groups (s. 130)

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5.3 Quorum for Meetings

The quorum for meetings of directors is a majority, unless otherwise provided for in the Letters Patent, Supplementary Letters Patent or in a special resolution of the corporation, and in any event shall not be less than two-fifths of the board of directors. (s. 288).

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5.4 Reporting Requirements

Within 60 days of incorporation you are required to file an Initial Return (see section 2 of the Corporations Information Act) with the:

Corporate Notices Section
Companies Branch
Ministry of Consumer and Commercial Relations
393 University Avenue, Suite 200
Toronto, Ontario M5G 2M2
Telephone (416) 314-8880 or toll free in Ontario 1-800-361-3223

Notice of Change

Within 15 days after every change that takes place in the information set out in the Initial Return, (this includes every change in the board of directors, officers or their residential addresses or change in the corporation’s address) you must file a Notice of Change (section 4 of the Corporations Information Act) at the address listed on the previous page.

There is no fee for filing the Initial Return or the Notice of Change. The appropriate form is supplied to you at the time of incorporation. Additional forms may be obtained from the Companies Branch.

Special Information Notice

Periodically special information notices under section 6 of the Corporations Information Act are mailed out to all Ontario non-profit corporations on record with the Companies Branch. When your corporation receives this document, it is essential that it be completed and returned to the Branch within thirty days. The special information notice must be filed whether or not the corporation has recently filed an Initial Return or Notice of Change (Form 1 under the Corporations Information Act). Failure to file the special information notice may result in cancellation of the charter and the dissolution of the corporation.

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5.5 Penalties for Failure to Comply with Filing Requirements

The importance of submitting these filings cannot be over-emphasized. Failure to comply may lead to cancellation of the Letters Patent and dissolution of the corporation. Penalties are provided in the Corporations Information Act for individuals (up to $2,000) and for corporations (up to $25,000) where reporting requirements are not complied with. Also, a corporation that is in default of the reporting requirements is not capable of maintaining any action in any court in Ontario in respect of any contracts made by the corporation.

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5.6 Additional Reporting Requirements

Where a corporation is regulated or funded by a Ministry or Agency of the Government, it may be required to comply with other reporting requirements in addition to those enumerated in the Handbook. For example, charities are required to submit certain reports to the Public Guardian and Trustee as well as to Revenue Canada, Taxation. (see Part 6 of this Handbook).

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5.7 Audit Provisions

Members of the corporation must appoint an auditor to hold office until the first annual meeting and at each annual meeting must appoint one or more auditors to hold office until the next annual meeting. There is no waiving of this statutory requirement (s. 94 and 133).

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5.8 Record Keeping Requirements

A not-for-profit corporation is required, among other things, to meet certain record keeping obligations such as:

  • proper books of account and accounting records (s. 302)
  • minutes of meetings of members and directors (s. 299)
  • maintain copies of Letters Patent, Supplementary Letters Patent, By-Laws and Special Resolutions (s. 300)
  • register of its members and directors (s. 300)

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5.9 Use of Corporate Name

The name of a corporation is set out in the instrument of incorporation (Letters Patent) or if subsequently changed, in the instrument of amendment (Supplementary Letters Patent) and that is the name that the corporation must use (for exception see paragraph 5.11) in all transactions.

For example, if the name of the corporation is The Muskoka and Haliburton Naturalists Inc., it may not identify itself as Muskoka and Haliburton Naturalists.

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5.10 Changing Corporate Name

A corporation may apply for Supplementary Letters Patent to change its corporate name. (see s. 131 of the Act and s. 19 of the Regulations).

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5.11 Use of a Name Other than Corporate Name

A corporation may use a name other than its corporate name. For example, a corporation called Federation of Ontario Moose Callers may carry on its undertaking under the assumed name "Ontario Moose Callers".

However, NO corporation shall carry on business in Ontario or identify itself to the Ontario public by a name other than its corporate name unless the assumed name is first registered with the Companies Branch (section 2(1) of the Business Names Act). The appropriate registration form, (Form 2, under the Business Names Act) may be obtained from:

Companies Branch
Ministry of Consumer and Commercial Relations
393 University Avenue
Suite 200
Toronto, Ontario
M5G 2M2
Telephone (416) 314-8880 or toll free in Ontario 1-800-361-3223

A corporation which has registered and uses a name other than its corporate name is required to set out its corporate name on all contracts, invoices, negotiable instruments and orders for goods and services. (Section 2 (6) of the Business Names Act).

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5.12 Changing the Authorized Number of Directors

The number of directors of a corporation is established at the time of incorporation, being the number of first directors named in the Letters Patent.

The board of directors of a corporation shall consist of a fixed number of directors not fewer than three (s. 283(2) of the Act).

A corporation may by special resolution increase or decrease the number of its directors (s. 285 of the Act).

"Special Resolution" means a resolution passed by the directors and confirmed with or without variation by at least two-thirds of the votes cast at a general meeting of the members of the corporation duly called for that purpose or in lieu of such confirmation by the consent in writing of all the members entitled to vote at such a meeting.

A notice of such special resolution (see Appendix "F") must be filed with the Companies Branch (there is no fee for filing) and published by the corporation in the Ontario Gazette within 14 days after the resolution has been passed.

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5.13 Changing the Location of the Head Office

The location of the head office is established in the Letters Patent. However, a corporation may by special resolution change the location of its head office to another place in Ontario (s. 277 of the Act).

"Special Resolution" means a resolution passed by the directors and confirmed with or without variation by at least two-thirds of the votes cast at a general meeting of the members of the corporation duly called for that purpose or in lieu of such confirmation by the consent in writing of all the members entitled to vote at such a meeting.

A notice of such special resolution (see Appendix "G") must be filed with the Companies Branch (there is no fee for filing) and published by the corporation in the Ontario Gazette within 14 days after the resolution has been passed.

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5.14 Changing the Objects and Special Provisions

A corporation may apply for Supplementary Letters Patent to change all or any of its objects and/or special provisions set out in the Letters Patent (see s. 131 of the Act and section 19 of the Regulations).

If the corporation is, or after issuance of Supplementary Letters Patent, would be funded, supervised, etc. by a Government Agency or Ministry, it may be wise to consult with the funding or supervising Agency or Ministry prior to completing the application for Supplementary Letters Patent.

Applicants for Supplementary Letters Patent should also bear in mind that, in addition to the Corporations Act, there may be other legislation to which the corporation may be subject.

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5.15 Income Tax Act Considerations

A non-profit or not-for-profit corporation is generally exempt from federal income tax either as a "non-profit organization" as described in paragraph 149(1)(l) of the Federal Income Tax Act or if registered as a charity within the meaning assigned under section 149.1.

Although an organization may not qualify for charitable status, the non-profit-non-charitable designation may still be advantageous from a federal income tax point of view. The following activities, in accordance with Section 149(1) of the Income Tax Act (Federal), qualify for exemption from tax on their income without being a charity.

Section of
Income Tax Act		 Possible Type Of Activity
Section 149(1)(e) An agricultural organization, a Board of Trade, or a Chamber of Commerce.
Section 149(1)(i) Certain housing corporations providing low-cost housing accommodation for the aged.
Section 149(1)(j) Non-profit corporation for scientific research.
Section 149(1)(k) A benevolent or fraternal benefit society or order, a labour organization or society.
Section 149(1)(l) Amateur athletic organization, club, society, or association for social welfare, civic improvement, pleasure or recreation.
Section 149(1)(n) Limited dividend housing company under the National Housing Act, constructing, holding, or managing low-rental housing project.

Incidentally, a non-profit, low-cost housing organization established exclusively for the aged, under Section 149(1)(i), can also obtain the ability to issue income tax receipts for donations in accordance with Section 118.1(1)(c) of the Income Tax Act, without being incorporated as a charity.

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5.16 Ontario Corporations Tax Branch Requirements

Corporations, whether share or non-share, which are exempt from both income tax and capital tax, are not required to file annual Ontario Corporations Tax Returns (CT-23) with the Corporations Tax Branch.

Exempt corporations are defined for income tax purposes under section 57 of the Ontario Corporations Tax Act (the Act) and for capital tax purposes under section 71 of the Act and include:

  • charities and other corporations - any corporation referred to in paragraph 149(1)(c), (d), (e), (f), (h.l), (i), (j), (k), (m), (n), (o), (o.l), (o.2), (o.3), or (t) of the Income Tax Act (Canada). This list includes municipal corporations, certain Crown corporations, registered charities, certain housing corporations, non-profit corporations for scientific research, labour organizations, limited dividend housing corporations, pension corporations, prescribed small business investment corporations and certain other non-profit organizations (boards of trade, agriculture organizations, chamber of commerce).
  • Non-profit organizations - clubs, societies or associations that are organized and operated exclusively for social welfare, civic improvement, pleasure or recreation or for any other purpose other than profit, and have never distributed their income, funds or property to benefit shareholders, members, etc. (with a small exception e.g. distributions whose primary purpose is ultimately the promotion of amateur athletics in Canada).
  • Farmers and Fishermen insurers - an insurer who receives at least 25% of the gross premiums for insuring property used in farming or fishing or residences of farmers or fishers. The 25% test is confirmed by the Superintendent of Insurance. This provision exempts from income tax the Farmers Mutual Insurance Companies insuring farmers in Ontario.

Mutual insurance corporations receiving premiums wholly from the insurance of churches, schools or other charitable organizations are now required to file a return and pay a flat capital tax of $100, only if their total assets and/or gross revenue are in excess of $1 million.

This example shows a corporation which is exempt from income tax, is not necessarily guaranteed an exemption from capital tax; that exemption determination has to be done separately.

Where a corporation loses its exempt status for a particular taxation year it would be required to file a return and pay the taxes for that year. It would also be required to file for each subsequent year if:

  • it had a taxable income for the year;
  • its total assets and/or gross revenue exceed $1 million.

For corporations which have not lost their exempt status, the Branch may require that these corporations complete questionnaires from time to time to see if their tax status has changed.

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5.17 Dissolution - Surrender of the Charter

Where a corporation no longer serves the purpose for which it was incorporated or where the members have lost the interest in the corporation, it may be desirable for the members to terminate the existence of the corporation. The most straight forward method of dissolution is the surrender of the charter (see s. 319 of the Act and s. 23 of the Regulations).

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