The Non-profit Corporations Act creates rules to govern the conduct of non-profit corporations and those acting for these corporations. There are a number of possible consequences when the Act is not followed. There are also circumstances when the court can order that a non-profit be investigated.
Non-profits, their members and their directors are required to comply with the Act.
Disputes in non-profits are common. Sometimes reporting an offence or asking for an investigation is not a possibility because the dispute does not involve not complying with the Act or create the grounds for a court ordered investigation. Sometimes even when reporting an offence or asking for an investigation are possible there can be more effective ways to deal with issues. Discussion, negotiation and involving a third-party through mediation are all possible avenues for resolving a dispute. If enough members are unsatisfied with how things are being run they can elect a different Board or bring something to the membership as a whole for a vote.
If anyone involved in the corporation, including directors, officers, employees or auditors, is not complying with the rules for non-profits or the articles or bylaws of the corporation an application can be made to court. The court can order the person to comply with the Act, articles or bylaws.
It is an offence to not comply with the provisions of The Non-profit Corporations Act. However prosecution of a person under the Act is considered to be a remedy of last resort. A person who without reasonable cause contravenes any other provision of the Act can also be liable to a fine of up to $5000 or up to six months in jail or both.
The Act requires reports to be made in a variety of situations. If a person making a report includes an untrue statement or omits information that makes the report misleading they are guilty of an offence. A person found guilty of a reporting offence can face a fine of up to $5000 or up to six months in jail or both. The court may also order the person to comply with the Act.
Any member of a non-profit corporation may 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 investigation may include...
If you are considering reporting an offence or asking for an investigation the Government of Saskatchewan has a Non-Profit Dispute Resolution Fact Sheet with detailed information.