While we all get a handle on the new forms and requirements (and wait for further amendments still to come), I thought I’d do an update on a post I did a few months ago about common mistakes or misconceptions. Here are some of the most common issues we’ve encountered so far:
Myth: The preliminary notice of meeting is only required for annual general meetings.
Truth: The preliminary notice of meeting is required for ALL owners meetings, including annual general meetings, requisition meetings, and special general meetings. The only time it is not required is where the meeting is called solely to fill vacancies on the board where a quorum has been lost. For more information, see section 12.2(5) of O.Reg. 48/01.
Myth: There is one form for disclosure by candidates and directors.
Truth: There is no prescribed form for disclosures by candidates or directors. That said, many law firms and management companies have created disclosure forms. Be careful when using these forms. The disclosure obligations for candidates and directors are NOT the same so different forms should be used for candidates prior to election and directors after their election or appointment.
Myth: Nothing bad will happen if we don’t file our returns with the CAO or pay our $1/unit/month assessments.
Truth: There are a number of possible consequences for failing to file the returns or pay the assessments:
- The CAO can levy late fees for not filing returns on time (see section 9.6 of the Act).
- The Registrar of the CAO can also order a person to comply with the return and assessment requirements (see section 134.1 of the Act).
- A corporation that has not paid its fees is incapable of maintaining a proceeding before the Tribunal or a court, except with leave of the court (see section 23.1 of the Act).
- A person who fails to complete returns or pay assessments may be guilty of an offence and liable to a fine of $25,000 for individuals and up to $50,000 for corporations!
Stay tuned for more common misconceptions and myths.