Non-Profit Offences & Investigations

The Non-profit Corporations Act, 2022 sets out a number of illegal acts. These are called offences. The Act also sets out consequences for committing these offences.

It is an offence to contravene any provision of the Act or its regulations without reasonable cause. A corporation or person can be charged with this offence any time the Act or its regulations requires something, and they do not do it. For example, a corporation that fails to submit their annual return to the Corporate Registry could be charged.

A person convicted of this offence can be fined up to $10,000, sentenced to up to 6 months in jail or both. A corporation can also be convicted of an offence. It can be fined but not jailed. However, any director or officer involved in the offence can also be convicted, and they can be jailed. The corporation and any people involved can also be ordered to comply with the Act and its regulations.

The Act requires reports and other documents to be made in a variety of situations. It is an offence for a person to make or assist in making a report that:

• includes an untrue statement of material fact
• omits a material fact making the report misleading

The person is not guilty of this offence if they did not know the statement was untrue or that there was an omission and they could not have known this using reasonable diligence.

Any member of a non-profit can apply to a court for an investigation of the corporation. The court will order an investigation where it finds grounds to do so. Grounds for an investigation may exist if it appears to the court that:

• the activities of the corporation have been carried on with the intent to defraud
• the activities of the corporation have been carried on in a manner that is oppressive or prejudicial to a member
• the corporation was formed or is to be dissolved for fraudulent or unlawful purposes
• those involved with the activities have acted fraudulently or dishonestly

A complainant can ask the court for an order relating to oppressive or other wrongful conduct of a non-profit. The complainant must be:

• a member or former member of the corporation
• a director or officer or former director or officer
• a creditor
• any other person who the court finds is proper to make the application

The court can make an order if it finds the corporation’s actions or omissions to be oppressive to, unfairly prejudicial to or unfairly disregard the interests of:

• any member, director or officer
• any security holder or creditor
• in the case of a charitable corporation, the public generally

To succeed in such an application, the complainant must show that:

• they had a reasonable expectation to be treated a certain way
• the conduct of the corporation was oppressive, unfairly prejudicial or unfairly disregarding

Oppression is the most serious conduct and means conduct that is harsh and wrongful. It is described as a clear departure from the standards of fair dealing and an abuse of power. Unfair prejudice may be something like squeezing out a member. Unfair disregard is viewed as ignoring the interests of the complainant or treating them as unimportant.

If an application is successful, a court can order a variety of different things, including that:

• the conduct complained of stop
• the corporation’s articles or bylaws be changed
• directors be removed and new directors be appointed
• a transaction be varied or set aside
• an aggrieved person be compensated
• the corporation be dissolved