Paying Directors of an Ontario Not-for-Profit (Non Share Capital Corporation)

Conventional wisdom, espoused by many Ontario lawyers and NFP practitioners, has often postulated that it is not lawful for an Ontario Not-for-Profit Corporation to pay remuneration to Directors for serving as such.

But this is incorrect.

In the case of a Not-for-Profit Corporation that is not a charity, there is no restriction preventing payment to Directors for their services as Directors, unless a restriction to that effect is expressly found in the Letters Patent, Supplementary Letters Patent or the By-laws.

Note the universal caveat - that actions taken by the Directors must be in the best interest of the Corporation - applies just as much to this issue as to any other.

If there is no restriction in Letters Patent or Supplementary Letters Patent: all that is required is a bylaw, enacted by the Directors and approved by the members, that authorizes such payment.

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