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Ontario’s Not-for-Profit Corporations Act, 2010 - Are You Ready?


Christine Mills on December 12, 2012 in Advice for Charities

The Ontario Not-for-Profit Corporations Act, 2010 (ONCA) comes into effect on January 1, 2013.  The Act applies to every non-share capital corporation that was previously governed by the Ontario Corporations Act, 2009.  There are special exceptions including insurance companies and companies with objects "in whole or in part of a social nature" (a “Social Corporation”), which are subject to special transitional rules.  Co-operatives and business corporations will continue to be subject to their own acts.

According to the Ministry of Consumer Services, the legislation was intended to:

  1. Enhance corporate governance and accountability;
  2. Simplify the incorporation process;
  3. Give more rights to members; and
  4. Better protect directors and officers from personal liability

The new act covers a variety of topics including:

  • The distinction between a public benefit corporation and other not-for-profit corporations
  • The qualification, appointment, resignation and removal of directors
  • A new incorporation process
  • Clarification on allowable commercial activities
  • Enhanced procedures to address the voting rights of members
  • When a corporation requires an audit vs. a review engagement
  • Records that must be maintained by the Corporation and made accessible to members and directors

If you are a member, director or executive at a not-for-profit organization you should be familiar with the new act and its key changes. A summary of the acts’ new provisions can be found online,
http://www.globalphilanthropy.ca/images/uploads/Ontario_Not-For-Profit_Corporations_Act.pdf

Existing not-for-profit corporations will have a three-year transition period once the ONCA is in effect to make any necessary changes to their incorporation and other documents to bring them into conformity with ONCA.

To aid in the transition, the government has created a transition checklist that can be accessed online, http://www.sse.gov.on.ca/mcs/en/Pages/onca4.aspx