A non-share capital corporation under the NFP Act does not have shareholders. Instead, the corporation is required to be structured as a membership-based corporation, operated by members and directors. Members and directors of the corporation have different duties, rights and obligations in their respective roles. The governance, administration and management of the corporation lies with the board of directors, who are accountable to the members. Generally, directors (other than the first directors) are elected by members. Memberships are issued by the board in accordance with the articles and any conditions set out in the by-laws.
When the corporation was incorporated, two forms would have been filed with Corporations Canada: Form 4001 – Articles of Incorporation, and Form 4002 – Initial Registered Office Address and First Board of Directors. The latter form names the individuals who will make up the first board of directors of the corporation. These people will act as directors of the corporation from the date Corporations Canada issues the Certificate of Incorporation, until the first meeting of members, when their role as directors ends. At that first meeting, the members elect the corporation’s directors, who may be chosen from the first directors, members or other individuals. In the future, it may be necessary to elect additional directors or new directors to replace existing ones.Footnote 1 See The Directors.
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