If you aren't a member of Toronto 2311, you’ll find this as exciting as watching paint dry. If you are from Toronto 2311, however, I hope you find this useful.
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Toronto’s Maple Leaf Aerie 2311 has a unique structure for management of its bar operations. The bar at the aerie premises at 17 Elm Street in Toronto is governed by a corporation called the Order of Eagles Maple Leaf Aerie Inc., incorporated in 1946, which holds the liquor license for the premises. It is generally referred to as the Order of Eagles or simply “the Order” by Toronto 2311 members. That’s unfortunate, since the Fraternal Order of Eagles, to which everyone in Toronto 2311 belongs, often uses the same shorthand description “the Order” in its own Statutes to describe the FOE.
Why Aerie 2311 took this step is simple: in 1946, the Province of Ontario wouldn’t issue a liquor license except to a corporation (though this is no longer the case). From the time the Aerie was chartered in 1938, the Eagles here had met in other places which did have a liquor license – first the Royal York Hotel and eventually at the West End Vets’ Club.
With rapid growth credited to returning veterans, all aeries of the FOE and indeed virtually all fraternal organizations were able to explore new opportunities. Maple Leaf Aerie 2311 members decided it was time to rent their own premises on Ossington Avenue in west-end Toronto, to be funded through bar operations. Initially and for several years, the license was for beer and wine only, a reflection of the rather conservative nature of Toronto in those days.
When Aerie 2311 moved to 17 Elm Street in 1958, it moved the corporation and its liquor license as well.
While it’s under the purview of Ontario’s Corporations Act, the Order of Eagles Maple Leaf Aerie Inc. is one of a special type of corporation called a “corporation without share capital”. Such corporations are usually charitable, social, cultural, patriotic or religious organizations or professional or trade associations. They have numerous differences, beginning with the very telling fact that those who have shares are referred to as “members”, rather than “shareholders”.
Members of our corporation are defined as members in good standing of Maple Leaf Aerie 2311 on the day of the annual general meeting. You cannot hold more than one share, nor may you sell your share, as you could with most corporations. In accordance with FOE Statutes, if your dues are payable the day before the corporation’s annual general meeting and you haven’t paid, you have no more right to attend or participate in the corporation’s annual general meeting than you would be able to attend or participate in the aerie’s own general meetings.
The interest an Aerie member has in the corporation ceases to exist on his death or cessation of Aerie 2311 membership by resignation or otherwise.
The corporation has, of course, a Board of Directors comprised of 10 members. Seven of the 10 Directors, however, are ex officio (meaning by right of office). The aerie’s President, Vice President, Secretary, Treasurer and three Trustees (the officers who handle money) are ex officio Board members holding the same titles there. Three more Board members are elected “at large” at the annual general meeting of the corporation from among the aerie’s membership. Everyone serves a one-year term unless he or she serves a multi-year term in the Aerie, in which case the Aerie officer serves the same term while a Director. This is all permitted within the definition of a corporation without share capital.
Why is this arrangement not more common? The answer here is also simple: the Grand Aerie in its own annual meeting nearly two decades ago decided that it would no longer permit bar operations to be hived off into separate corporations from the Aerie itself. If an Aerie wanted to incorporate, the whole aerie, including real estate and other assets, would have to be included. Since corporations are capable of suing and being sued, all the Aerie’s assets would have to be part of the same package.
At that Grand Aerie meeting in Indianapolis, then-Secretary of Aerie 2311 and also New York State Secretary Don Rettinger successfully moved that such pre-existing separate corporations, including the one held by Toronto 2311, be “grandfathered”, or exempt from the ban.
Otherwise, Aerie 2311 would have had to dissolve its corporation, thus losing its liquor license. The Aerie could apply for a license in its own name, of course, but approval of such applications is neither immediate nor guaranteed.
FOE Statute 123.1 now reads “(a) Any Local Aerie may be incorporated under the Laws of the State, Territory or Province in which such Aerie is situated, in accordance with the conditions hereinafter prescribed and not otherwise.
(b) An Aerie may be incorporated under Section 123 but cannot form separate corporations for the purpose of one (1) holding the liquor license and another holding the real estate and other assets of the Aerie. Any corporate structure above and beyond the simple “incorporation of the Aerie” is a violation of Section 123.1.”
Further on corporations, FOE Statutes Section 123.4 reads “All of the assets of any such Aerie so incorporated shall be subject to the Laws promulgated by the Grand Aerie in the same manner and to the same extent as though such Aerie were not incorporated.”
There is no exemption from this Statute, nor is there from Section 123.6, which reads “In all cases where an Aerie is incorporated, such Articles of Incorporation shall contain therein provisions that said Aerie is incorporated in conformity with, and subject to and under the jurisdiction and control of the Laws of the Fraternal Order of Eagles.”
There are other requirements for a corporation without share capital in addition to the FOE Statutes. Our corporation cannot permit personal gain, either on the part of the Directors or of the members (like declaring a dividend), except that the Directors who are Aerie officers may be paid a salary if approved by the Aerie.
Directors are not personally liable for debts and obligations of the corporation, except for salaries paid to
The corporation may not have financial gain as its primary purpose. In our case, the bar operations are permitted as incidental to the primary purposes of the FOE, which are fraternal, social, charitable and humanitarian.
Since most of the Directors are ex officio Aerie officers, they cannot through the corporation become exempt from their sworn duties as Aerie officers. That means whatever the corporation does remains accountable to the Aerie, and its decisions are subject to the Aerie’s approval and direction.
In summary, then, the Order of Eagles Maple Leaf Aerie Inc. has outlived its original purpose to hold a liquor license, but continues to hold it because it spares the Aerie the delay and uncertainty of applying for a license in its own name. The Board, comprised of Aerie officers and members, are fully accountable for its actions to the Aerie itself, making the corporation (while recognized in law) not much more than a Special Committee of the Aerie.
Should the corporation be dissolved, its assets, debts and obligations would under the Corporations Act be transferred to the Aerie as a “charitable organization whose objects are beneficial to the community”.
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