Unincorporated Non-profit Associations Act 2008


UNIFORM UNINCORPORATED NONPROFIT ASSOCIATIONS ACT

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of [enacting jurisdiction], enacts as follows:

DEFINITIONS AND INTERPRETATION

Definitions

1 The following definitions apply in this Act.

“governing principle” of an association means a rule of the association that governs its purpose or operation or the rights or responsibilities of its members or managers.

“majority vote” in relation to any matter means a majority of the votes cast at a properly called meeting of the persons entitled to vote on that matter.

“manager” means

(a) a natural person who, under an association’s governing principles, alone or together with others, is responsible for managing, or supervising the management of, the association’s undertaking and affairs; and

(b) a member who becomes a manager by default under subsection 18(2).

“member” means a person who, under an association’s governing principles, is entitled to participate in

(a) the selection of persons to manage, or supervise the management of, the association’s undertaking and affairs; or

(b) the development of the association’s governing principles or policies.

“nonprofit association” means an unincorporated body of persons joined by mutual consent for one or more common purposes other than profit.

“person” includes an unincorporated organization, a government and a department or branch of a government.

Comment: A UNA’s “governing principles” are the equivalent of a nonprofit corporation’s constitutions, articles of incorporation, or bylaws. They are the foundational rules that govern the UNA’s purposes and internal affairs. The governing principles of a UNA do not have to be in writing.

A definition of “majority vote” is included for the sake of clarity. This expression crops up a number of times in the default organizational rules that appear later in the Uniform Act.

A “manager” of a UNA is an individual who, under the UNA’s governing principles, actively manages or supervises the management of the UNA’s undertaking and affairs. The word “manager” was selected as a neutral term to express this concept. The individuals on governing boards of UNAs are often in practice styled “directors,” “governors,” or “trustees.” The definition of “manager” turns on the substance of an individual’s role within the UNA and not on the individual’s formal designation.

A person is considered a member of a UNA for the purposes of the Uniform Act if that person is entitled to participate either in the selection of the UNA’s managers or in the development of the UNA’s governing principles or policies. The definition is framed in these broad terms in order to ensure that the benefits of the Uniform Act, such as the insulation from liability, will flow to persons who may find themselves liable or otherwise disadvantaged under the archaic common law rules.

“Nonprofit association” is defined in simple, broad terms. The phrase “mutual consent” refers to the contractual basis of the formation of a UNA. This specific phrase has been used because most agreements to form a UNA do not rise to the level of formality that is common among, for example, commercial contracts.

“Person” is given a broad definition in the Interpretation Acts of most provinces and territories. The intent of this definition is to extend further the definition of “person” to embrace unincorporated organizations, governments, and departments or branches of governments. In some cases, these bodies may be members of UNAs. There is no reason to deny them the benefits that flow from the Uniform Act.

The derivation of the definitions in section 1 from the Joint Drafting Committee’s Statement of Principles is as follows: “governing principle”—Principle (2); “manager”—Principle (4); member—Principle (3); “nonprofit association”—Principle (1).

Evidence of governing principles

2 An association’s governing principles may be oral, in writing or inferred from the practices of the association used by it consistently for the most recent five years or, if it has existed for less than five years, throughout its existence.

Comment: Many UNAs operate on an informal basis. Often, UNAs only have rudimentary written bylaws, or other organizational documents, to govern their internal practices and procedures. Many UNAs lack written bylaws or organizational documents entirely. This section is intended to accommodate these UNAs and to provide them with statutory support for their basic organizational structure.

Derivation: Principle (2).

Interpretation of “nonprofit association”

3(1) An association does not cease to be a nonprofit association merely because it engages in a profit-making activity or earns a profit, if the profit is used only for its nonprofit purposes or set aside for those purposes.

Effect of joint ownership

3(2) Joint ownership of property, whether as joint tenants or tenants-in-common, is not by itself sufficient to establish a nonprofit association, even if the owners use the property for a nonprofit purpose.

Comment: This section contains two interpretive statements that may be used in defining a UNA for the purpose of the Uniform Act. Subsection (1) clarifies the meaning of “nonprofit” as it is used in the Uniform Act. This term may be easily misunderstood, as it implies that “nonprofit” bodies must forswear all activities that could produce a profit. In fact, many UNAs do engage in profit-making activities, as a means to support and advance their purposes. Subsection (1) makes it clear that profit-making activities, as such, are not the issue. Subsection (2) clarifies that two or more people holding property in common do not by that fact alone constitute a UNA.

Derivation: Subsection (1)—Principle (5); Subsection (2)—Principle (1).

Next Annual Meeting

2018 Conference (Centennial)

Delta Hotel

Québec City, QC

August 12 - 16, 2018