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ONCA Provides More Options to Not-for-profit Corporations in Ontario

ONCA Has Arrived…Finally

On October 19, 2021, significant changes to the regulations governing not-for-profit corporations (NPCs) in Ontario came into effect when the long-awaited Ontario Not-for-profit Corporations Act, 2010 (ONCA) was brought into force. The overall purpose of ONCA is to simplify and clarify the processes involved in the incorporation, dissolution, and governance of non-profits.

The launch of ONCA was dependent on the launch of the Ontario Business Registry(OBR). The OBR also came online on October 19, 2021. The OBR represents a big step forward for how non-profits conduct transactions such as registering and dissolving businesses, filings, etc. Qualified intermediaries, such as lawyers and accountants, will now be able to perform over 90 such transactions online, 24 hours a day—a measurable improvement over the previous method of in-person or paper filing that will save non-profits valuable time and resources.

Steps Forward

Ontario not-for-profit organizations, which were previously governed under the Ontario Corporations Act, will have three years to make the changes needed to bring their governing documents in line with ONCA.

ONCA has been much anticipated for some of the features that will provide more flexibility for charities and non-profits. Of particular note is the ability for some non-profit corporations to use a review engagement rather than an audit. Under the new rules, appointing either an auditor or someone to perform a review engagement must be done at each annual meeting by ordinary resolution. The criteria as to whether a review engagement or audit will be required can be found on this chart, and is based on:

  • The revenue per financial year
  • Whether or not it is a public benefit corporation

Get Ready

While many non-profits have been preparing for this transition for some time, for those just starting there are a number of steps worth taking immediately. Start with an overall assessment of your organization’s current structure. Determine whether your non-profit organization is federally or provincially incorporated. ONCA only applies to Ontario corporations. ONCA will not apply to federal NPCs, as they are governed by the Canada Not-for-profit Corporations Act. A comprehensive list of steps to prepare for the transition can be found on Ontario’s Not-For-Profit Corporations Act (2010) – Transition Considerations page. A few key considerations include:

  1. Are your governing documents up to date and easily accessible?
  2. Is your governing structure appropriate for your current operations?
  3. Is your list of officers, board members, non-board members, etc. up to date?
  4. Do by-laws need to be amended?
  5. Are corporate filings up to date?

The arrival of ONCA and the OBP offers many advantages to Ontario’s non-profits. Preparing for the transition may affect the structure of the non-profit organization going forward. This is an ideal opportunity to review and update processes, financials, governance, and framework to maximize the benefits available. For additional information regarding review engagements, audits, and to prepare for the transition please contact Deborah Andrews.

Deborah Andrews

dandrews@sbpartners.ca

Resources:

ONCA

https://www.ontario.ca/page/rules-not-profit-and-charitable-corporations

OBR

https://www.ontario.ca/page/ontario-business-registry

Corporations Act

https://www.ontario.ca/laws/statute/10n15


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