Dissolving Non-Profits
Dissolving a non-profit corporation in Saskatchewan can be achieved by the members, outside authorities, or by a court acting upon a request.
There may be several reasons for dissolving a non-profit, such as: the organization’s main objective has disappeared; there has been a deadlock in the management of affairs; the directors’ conduct has been unfairly biased towards an individual member or a particular group of members.
The Corporate Registry may dissolve a non-profit that hasn’t carried on activities within three years after the date of incorporation, or if it hasn’t carried on any activities at all for three years. Grounds for dissolution also include if the corporation has failed to hold members’ meetings for two consecutive years and is carrying on activities restricted by the articles or contrary to the articles.
Dissolving a non-profit corporation in Saskatchewan can be achieved by the members, outside authorities, or by a court acting upon a request. A minimum of two-thirds of the members can also vote in favour to pass a special resolution voluntarily dissolving the corporation.
Any person interested also may apply to the court for dissolution. The Corporate Registry is given notice of the application to the court, and therefore is entitled to appear and be heard. The court may order the dissolution, or it may make any other order it deems appropriate to that case. The court may order the dissolution and a certificate of dissolution is issued. An order to liquidate and dissolve may be ordered by the court and a liquidator, who may be a director or an officer of the corporation, may be appointed.
If no one successfully objects to the dissolution and the time period expires, the Corporation Registry will issue a certificate of dissolution and the corporation ceases to exist on that date.
After when the decision has been made to dissolve the non-profit, the corporation then collects and disposes all properties (in accordance with Act. A Form 17 – Articles of Dissolution under The Non-profit Corporations Act, 1995), along with the final financial statement, is sent in to Corporate Registry. At this time, assets and liabilities must show balances of zero. A certificate of dissolution is then issued by the Corporate Registry, and the non-profit corporation then ceases to exist on this date. A certificate of intent of dissolution can be revoked any time before the issuing of the final certificate of dissolution, and the corporate can then once again resume its activities.
The Corporate Registry then gives a 120 days’ notice to the corporation and its directors, and the notice of decision is then published in the Saskatchewan Gazette. If no one successfully objects to the dissolution and the time period expires, the Corporation Registry will issue a certificate of dissolution and the corporation ceases to exist on that date.
How the surplus is distributed upon dissolution depends on whether the corporation is a membership-based or charitable. In a membership corporation, the surplus is distributed as stated in the articles — it may be donated to a similar organization or charity, or divided equally amongst its members. In a charitable corporation, the articles may name a specific charitable corporation or government to receive the surplus. If money was received for a specific purpose, if possible, it must be returned to the donor, or be donated to an organization with a similar purpose, and the surplus cannot be divided among its members.
