The Non-profit Corporations Act, 2022 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.
It is an offence to contravene any provision of or The Non-profit Corporations Act, 2022 or its regulations without reasonable cause. A person convicted of this offence can be fined up to $10,000 or sentenced to up to 6 months in jail or both. The person can also be ordered to comply with the Act and its regulations.
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. 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 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...