Disclaimer:
The information provided here is for general informational purposes only and does not constitute legal advice. While these suggestions offer insights into ways you may structure and govern a non-profit, readers are strongly encouraged to consult a qualified legal professional specializing in non-profit law to ensure compliance with applicable regulations and to address specific organizational needs.
To ensure you maintain control over your non-profit organization in Alberta, here are key strategies and structural decisions you can make during its formation and governance:
- Select the Right Structure and Legal Entity
– Incorporate as a Society or Part 9 Company: In Alberta, many non-profits choose to incorporate as a society under the Societies Act or a non-profit company under Part 9 of the Companies Act. Each of these structures allows for member-driven governance but can be set up to suit your control preferences.
- Define Membership Rules Carefully
– Limited or No Membership: Some non-profits limit the voting power of general members or restrict membership. This setup can give the board of directors greater control and avoid scenarios where general members might make significant decisions that affect the organization’s direction.
– Create Classes of Memberships: If you choose to have members, you can establish different classes of membership, with only certain classes (or none) having voting rights.
- Establish a Founding Board of Directors
– When you incorporate, you appoint the initial board of directors. As the founder, you can choose individuals who align with your vision and are less likely to challenge your role or direction.
– Specify Director Terms in the Bylaws: Set fixed terms for directors, so board members can be replaced over time if necessary. Many non-profits set terms of one to three years for directors, with limits on consecutive terms to allow for board refreshment.
- Write Clear Bylaws and Articles of Incorporation
– Your organization’s bylaws define how decisions are made, who has voting power, and what authority you retain. Draft the bylaws carefully to ensure they support your level of control. Here are some areas to address:
– Appointment Powers: Include clauses that give you (or your position, such as “Founder”) a say in board appointments.
– Amendment Restrictions: Add provisions that prevent or restrict amendments to certain bylaws or your role without your approval.
– Decision-Making Powers: Specify areas (like financial decisions or strategic direction) where your approval is required.
- Consider a ‘Founder’s Agreement’
– A Founder’s Agreement can define your rights as the organization’s founder. Although it is not legally binding in the same way as bylaws, it can provide clarity for future board members and establish expectations regarding your role and influence in the organization.
- Retain Key Roles for Yourself in Governance
– You can retain specific officer roles such as Executive Director or Chairperson of the Board. Holding an executive role gives you day-to-day control over operations and key strategic decisions.
- Appoint Advisors or Committees
– Appoint non-voting advisory positions or committees to assist in decision-making without diluting control. These advisors can provide expertise and guidance without having governance authority, which keeps final decisions with you and the board you control.
- Draft Policies for Board Removal and Replacement
– Establish clear policies for replacing or removing board members who may not align with the organization’s mission or your vision. Ensure this is well-defined in the bylaws to avoid potential conflicts.
- Maintain Financial Oversight and Control
– Retain final approval on budgets and major expenditures, ensuring you have control over the organization’s financial direction.
Implementing these structures and safeguards can give you the control needed to keep your non-profit aligned with your vision, while still allowing it to grow and attract committed board members and volunteers. Consulting a lawyer with non-profit expertise can also help tailor the structure to your specific needs.
