After over ten years of waiting, the “Ontario Not‑for‑profit Corporations Act” (ONCA) will finally be proclaimed into force on October 19, 2021!

August 18th, 2021 by Iler Campbell

The Ontario government remains optimistic about the legislation, and anticipates that ONCA will simplify the incorporation process, clarify rules for governing a corporation, enhance members’ rights, as well as give members greater access to financial records.

The legislation, which passed in 2010, will be the legal framework under which most provincially incorporated not‑for‑profit corporations will operate come October 19th. More specifically, it will apply to every corporation that does not have share capital and is incorporated under an act of the Ontario legislature, other than the Co‑operative Corporations Act.

ONCA will bring lots of change to the regulatory landscape, and corporations will have three years after proclamation to comply with the new rules. As a result, provincially incorporated not‑for‑profit corporations will need to review their governing documents, and make any necessary changes within three years, to ensure compliance with ONCA.

ONCA will, among other things, bring about changes in the following areas:

  • Introduce a new non-profit registration process, known as the “Ontario Business Registry”
  • Make a new distinction between public benefit corporations and other not‑for‑profit corporations
  • Implement a new process for reviewing financial records, called the “review engagement”
  • Allow a non-profit corporation to provide for other means of voting in its bylaws
  • Clarify that non-profit corporations can engage in commercial activities if the activities support the corporation’s non-profit purpose
  • Require a corporation that has two or more classes or groups of members to set them out in the Articles
  • Set out a due diligence and good faith reliance defence for directors
  • Change voting and quorum requirements, as well as changes to member proposals

While there is relief that ONCA is finally coming into force, some provincially incorporated not‑for‑profit corporations may be more inclined instead to shift to the federal legislation, the “Canada Not‑for‑profit Corporations Act” (CNCA), to avoid complying with ONCA all together.

If your organization needs advice about ONCA compliance, moving to the CNCA, or any other corporate issue, we’d be pleased to help.

Filed in: Charities, Not for Profit Law

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