PRIMER FOR DIRECTORS OF NOT-FOR-PROFIT CORPORATIONS pot

[...]... or activities of the organization Corporations & Directors Ⅵ |1| The not -for- profit board of directors For- profit and not -for- profit directors share a legal The not -for- profit corporation is governed by a board responsibility to act in the best interests of the corpo- of directors The size of the board is defined in the ration However, the stakeholders in not -for- profit cor- bylaws of the corporation... different for not -for- profit corporations, although this What is a not -for- profit corporation? varies from jurisdiction to jurisdiction Incorporating a Not -for- profit corporations (also called “non-share for- profit entity is a routine matter of submitting the capital corporations ) are different from for- profit correct forms and payments Saskatchewan provides corporations (also called “business corporations )... called “business corporations ) in for a similar process with respect to not -for- profit cor- three fundamental ways: porations Incorporating a not -for- profit entity at the federal level and in most other jurisdictions, however, s The not -for- profit corporation is composed of members, whereas the for- profit corporation is owned by shareholders.1 s The members of a not -for- profit corporation cannot receive... mutual benefit organi- |4| directors of mutual benefit organizations All not -for- profit corporations have members Corporations & Directors Ⅵ |1| With many mutual benefit not -for- profit corporations, ified in the governing documents of the corporation membership criteria can be defined through a clear It is not uncommon for a not -for- profit corporation’s common interest, often related to service provision... appointed of their share(s) No such straightforward mechanism exists in not -for- profit corporations Not -for- profit corporations pursue purposes that are less tangible and EXAMPLE therefore hard to quantify This makes it much more A director selected as chair of a standing com- difficult to measure the performance of the corpora- mittee will enjoy the rights and privileges accord- tion and of the directors. .. individual may, for instance, be called an honourary where a conflict of interest arises advisor or patron Public Directors Honourary Directors or Officers Some not -for- profit corporations are required to have Where the not -for- profit corporation makes a practice one or more board members appointed to represent of naming honourary directors or officers, its govern- the public This is common in professional... shareholders in the form of dividends s The powers of a not -for- profit corporation are In various jurisdictions, additional approvals are required, or conditions must be met, for the incorporation of certain types of not -for- profit organiza- limited to what is written into its objects (purposes), tions and for those with certain specific words in their whereas, typically, the for- profit corporation has... accountability of directors of public bene- tory and bylaws review (also referred to as a compli- fit not -for- profit corporations is similar to that of ance audit) can be invaluable in ensuring that respon- mutual benefit directors Typically, directors of public sibilities and requirements are being met A key issue benefit corporations will have more constituencies to for many not -for- profit corporations is maintaining... approach Corporations & Directors Full board with input from 6 A review of the Ⅵ |1| |13| Duties of Directors |2| Jane Burke-Robertson* Barrister and Solicitor INTRODUCTION the corporation is incorporated and the rules established under the common law (the law established by courts) The role of directors governing directors duties The board of directors of a not -for- profit corporation is responsible for. .. bench- good faith evaluation); |16| Duties of Directors • directors are justified in entrusting certain matters of business to officers of the corporation; and, • directors are justified, in the absence of grounds for suspicion, in trusting that officers of the corporation will perform their duties honestly.3 |2| Ⅵ the Canada Corporations Act there is no duty for directors to have a particular skill level . accountability of directors of public bene- fit not -for- profit corporations is similar to that of mutual benefit directors. Typically, directors of public benefit corporations. through distribution of income over time or through purchase of their share(s). No such straightforward mechanism exists in not -for- profit corporations. Not -for- profit corporations