NFP Act

Definition

The NFP Act refers to the Canada Not-for-profit Corporations Act, which is federal legislation governing the incorporation, governance, and operation of not-for-profit corporations. 

What is the NFP Act?

The primary purpose of the NFP Act is to provide a legal framework for the creation and governance of not-for-profit corporations in Canada. It aims to improve transparency, accountability, and effectiveness in the not-for-profit sector while facilitating the operation and growth of these organizations.

The NFP Act sets out the requirements and procedures for incorporating a not-for-profit corporation in Canada. This includes eligibility criteria, name reservation, articles of incorporation, and filing requirements with Corporations Canada. Furthermore, it establishes rules and standards for the governance of not-for-profit corporations, including the composition and duties of boards of directors, member rights, meetings, and decision-making processes. 

Not-for-profit corporations incorporated under the NFP Act are required to maintain accurate financial records and prepare annual financial statements in accordance with generally accepted accounting principles. They must also comply with reporting requirements set out in the Act, including filing annual returns with Corporations Canada.

The NFP Act outlines procedures for merging two or more not-for-profit corporations and for dissolving a corporation. It sets out the steps to be followed, including approval by members or directors, notification to stakeholders, and compliance with legal requirements.