Moving a cross-border foundation's home jurisdiction without losing its board

The situation

'If we move this foundation into Ontario, do we lose Arman and Keisha off the board?' That was the question Niloufar asked in our first call, and it was the right question, because the answer she had already been given was wrong.

Niloufar chaired the board of a not-for-profit foundation, originally incorporated outside Canada, that funded medical research and training programs and had grown to manage assets and annual grant activity in the range of twenty to sixty million dollars. The foundation's donor base had shifted heavily toward Ontario over the past several years, and the board had decided that continuing the organization, that is, formally changing its home jurisdiction to Ontario while keeping the same legal entity and history, would simplify its banking, its tax filings, and its relationships with Canadian granting institutions. The board itself had nine sitting directors, recruited over more than a decade, and losing even two of them mid-continuance risked donor relationships and grant partnerships that had been built around specific people, not just seats.

Arman, a dentist who owned his own practice, and Keisha both sat on the board alongside Niloufar and had done so for years. Arman lived outside Canada for part of the year, and Keisha's residency situation was similarly not a straightforward, full-time Ontario address. Before approaching us, the board had asked its long-time accountant to look into what the continuance would require. The accountant, competent on the financial side but not a corporate lawyer, had told the board flatly that Ontario law required a majority of directors to be Canadian residents, and that Arman and Keisha would need to step down or the continuance would be refused.

That advice sat badly with the board. Both directors had institutional knowledge, donor relationships, and clinical credibility that the foundation did not want to lose over a technical filing requirement, and recruiting two replacement directors with comparable networks on short notice, under a filing deadline, was not a realistic option the board wanted to test. Niloufar's instinct, before she had any legal confirmation either way, was that the rule could not be that blunt, and that there had to be more nuance in how residency actually applied to a continuance of this kind. She was right to be skeptical, and getting the actual answer became the entire point of the engagement.

What the law actually said

The accountant's summary was not fabricated, it was outdated and imprecise, which is a common failure mode when a non-corporate advisor tries to answer a corporate law question from memory or a general search. Director residency requirements for Ontario and federally incorporated companies have changed over time and differ by statute and by type of corporation, and getting the current, precise version right for the specific entity involved is exactly the kind of question that needs a corporate lawyer rather than a general summary.

The first step was identifying which statute would actually govern the foundation once continued, since not-for-profit corporations in Ontario are governed by different rules than business corporations, and the residency requirements that apply to one do not automatically apply to the other. The foundation's activities and structure meant it would be continued as a not-for-profit corporation, which changed the analysis meaningfully from what the accountant had assumed.

Once we confirmed the correct statutory framework, the residency picture looked nothing like a blanket majority-resident rule. Ontario's Not-for-Profit Corporations Act does not impose any Canadian residency requirement on directors at all: a director can live anywhere, inside or outside Canada, without affecting the corporation's standing or the validity of the board's decisions. That absence of any residency threshold is easy to miss precisely because Ontario's business corporation statute used to impose a percentage requirement of its own, twenty-five percent of the board, before that requirement was repealed outright for business corporations in 2021. An advisor working from memory of the old business-corporation rule, or simply assuming a not-for-profit would be held to something similar, would land on exactly the kind of majority figure the accountant had quoted, when the not-for-profit statute has never asked for a single resident director, let alone a majority. Arman's time spent outside Canada and Keisha's residency situation, the two facts that had worried the board most, turned out to be legally irrelevant to whether the continuance could proceed.

We still walked through how 'resident Canadian' is defined in Canadian corporate law generally, because the concept can matter elsewhere in a foundation's compliance, even though it turned out not to gate this continuance. It combines two things: Canadian citizenship, or in narrower circumstances permanent residency, together with being ordinarily resident in Canada, meaning the place where a person's settled, regular life is actually centred, not just where they happen to be on a given date. None of that ended up affecting whether Arman or Keisha could keep their seats, because the statute governing the continued foundation does not ask that question in the first place. Confirming that took the pressure off treating their travel history as something to solve and let the board focus on the parts of the continuance that did require real work. Getting this right was the difference between the board being told, wrongly, to remove two experienced directors, and being told, correctly, that nothing about the board needed to change.

That history is also why the accountant's error was such an easy one to make: residency rules have genuinely shifted across Canadian corporate statutes in recent years, and a rule that used to apply to a different type of entity can sound just as confident once it no longer applies, or, in this case, once it turns out never to have applied to a not-for-profit board at all.

What we did

1. Identified the correct governing statute before answering the residency question. The accountant's advice had been built on an assumption about which corporate law framework would apply. We confirmed the foundation's activities and structure meant it would be continued as a not-for-profit corporation, which carried different director residency rules than the business corporation framework the earlier advice had implicitly relied on, and that single correction reshaped every subsequent step in the file.
2. Mapped every director's citizenship and residency status before relying on any assumption about the rule. We asked each board member, including Arman and Keisha, for their citizenship or permanent residency status alongside where they maintained their home and how their time was actually split across the year, because we needed a complete and accurate picture before telling the board definitively that residency was not a barrier, rather than guessing at the answer while the accountant's advice still stood unchallenged.
3. Confirmed the board faced no statutory residency threshold to satisfy. Once we had accurate citizenship and residency facts for all directors, we confirmed Ontario's Not-for-Profit Corporations Act imposes no Canadian residency requirement on directors at all, so the accountant's majority-resident advice simply did not apply and no resignations, replacements, or recruitment of new directors were needed regardless of how any individual director's residency worked out.
4. Prepared the continuance application with the residency analysis documented. Rather than leaving residency as an assumption, we built a short memorandum into the filing package explaining how each director's status was assessed and why the board met the threshold, so the answer was already on file if a regulator raised the question, rather than something to scramble for under time pressure.
5. Reviewed the foundation's governing documents for continuance compatibility. Bringing a foreign-incorporated entity into Ontario required its constating documents and bylaws to be restated in a form the Ontario framework recognized, covering everything from how directors were elected to how the board's quorum was defined, and we handled that restatement so the foundation's existing governance structure carried over cleanly rather than being rebuilt from scratch.
6. Confirmed the foundation's charitable and tax status would transfer cleanly. Because the foundation issued donation receipts and relied on its charitable standing, we coordinated with the board's tax advisors to confirm that continuing the corporate home would not trigger a deemed year-end or otherwise disrupt that registration, closing off a second risk that could have complicated the continuance if left unchecked.
7. Corrected the record with the board and the accountant. We walked the full board through the actual rule in plain terms, and separately explained to the accountant where the earlier summary had gone wrong, so future filings and advice for the foundation would start from an accurate baseline rather than repeating the same error on the next governance question that came up.
8. Filed the continuance and confirmed approval. We submitted the completed application, tracked it through the review process, and stayed available to answer any follow-up questions from the regulator so the file did not stall waiting on the board. Once formal approval came through, the foundation held its full board meeting under its new Ontario governing documents with every existing director still in place, the residency memorandum on file, and no interruption to its grant-making activity.

The outcome

The continuance was approved on the first submission, with no request for further information about director residency, which confirmed that the analysis had been built correctly rather than simply arguing a favourable interpretation. Arman and Keisha both remained on the board, and the foundation moved its legal home to Ontario with its governance, donor relationships, and charitable status fully intact and without interruption to its grant cycle. That result also confirmed, in practice, what the corrected analysis had said on paper: Ontario's not-for-profit statute does not ask for any resident director at all, let alone a majority.

The practical benefit for the foundation was immediate. Its banking relationships, tax filings, and grant agreements with Ontario institutions could now proceed under a domestic corporate structure, which simplified administration the board had been managing around for years, and which had been the original reason the board wanted to continue the entity in the first place. None of that required trading away institutional knowledge on the board, which had been the board's main worry going into the process, and it meant Arman's clinical relationships with donor hospitals and Keisha's fundraising contacts stayed exactly where they were.

The foundation also came away with a clearer sense of when to escalate a question from its accountant to a corporate lawyer, and the board asked us to review any future governance filing before it relied on informal advice again. Niloufar told us afterward that the instinct to double-check the accountant's answer, rather than accept a serious governance change on the strength of a general summary, was the single decision that protected the board. That instinct, more than any specific legal maneuver, is what turned a threatened loss of two directors into a continuance that changed nothing about who sat on the board, while still leaving the foundation with a properly documented governance structure it did not have before.

What you can learn from this