Charities and Not-for-profit Corporations – AGM Challenges and Solutions During COVID-19 Outbreak

If the AGM is required to be held within 30 days after the emergency is terminated, then the AGM can be delayed to be held no later than the 120th day after the emergency is terminated. This will give the corporation about four months to prepare for the AGM once the emergency is terminated.[3]

Notwithstanding the availability of a virtual meeting, the first question is whether a virtual meeting is appropriate for your members?  Issues to think about include access to technology, ability to use technology and purpose of meeting.

In addition, like any other members’ meeting, additional meeting requirements have to be addressed, such as:

• Notice of meeting;
• Absentee voting (proxies)
• Meeting procedures (Chair, be organized to bring motions and second motions)
• Counting voting;
• Privacy and security (login in identifications);
• Minutes

An application must be made to get permission.

A simple on-line application form can be found here.

The Corporations Canada website advises eligible corporations to apply at least 30 business days before the date the not-for-profit would send the notice calling its AGM under normal circumstances. Once approved, the corporation must call its AGM before October 31, 2020 and hold it before December 31, 2020.

Under the CNCA, unless the by-laws otherwise provide, members are also entitled to participate by a “telephonic, an electronic or other communication facility” if the corporation provides such means (i.e., a hybrid meeting where the corporation holds an in-person meeting and members may participate in the meeting by electronic means). If a corporation does not wish to allow members to participate in meetings electronically, it should opt out of such rights in its by-laws.[8]

If corporations want to permit a virtual meeting (i.e. where all members join by electronic means) by “an electronic or other communication facility”, it must include a specific permission to do so in their by-laws.[9]

Therefore, the corporation will have to look to its by-laws to determine where virtual meetings are permitted.

The CNCA permits directors to make, amend or repeal any by-laws (except for matters referred to in s.197(1)) and such by-law will become effective immediately until the next meeting of members, at which time the members may confirm, reject or amend the by-law, amendment or repeal by ordinary resolution.

However, the existing articles or by-laws of a corporation might alternatively provide that all by-law amendments are not be effective until approved by special resolution of the members.  Consequently, it is important for corporations to check whether the directors can effect a by-law change to allow a hybrid or virtual meeting.