Nonprofit Formation

Regulatory update: The Registrar of Associations has announced stricter oversight regarding family relationships and conflicts of interest among association office-holders. The oversight focuses on two main areas: 1. Family relationships between office-holders — Guidelines for proper association conduct require avoiding family relationships across management, control, and audit functions. A majority of board members and a majority of audit committee members must not be family relatives, in order to prevent conflicts of interest. Where family relationships exist, the new oversight will examine whether conflicts of interest are present. When selecting audit committee members and board members, family ties between them must be verified. 2. Employment of family members — When an association employs family members or pays for services rendered by a family member, restrictions apply: family member employment must not exceed 10% of the total workforce, and the total salary paid to family members must not exceed 10% of the total salary paid to all employees. For guidance on adapting your association's bylaws to the new requirements, contact us.