The long-awaited Ontario Not-for-Profit Corporations Act, 2010(ONCA) was proclaimed into force on October 19, 2021. ONCA now governs not-for-profit corporations (NFPs) incorporated in Ontario (including charitable organizations) and replaces Part III of the Corporations Act.
ONCA made significant updates to the legislation previously in place and modernized the process for incorporating new NFPs, clarified the rules surrounding corporate governance, accountability and commercial activities, and introduced a simplified process for financial record review, among many other things.
NFPs already in existence were given a 3-year transition period beginning on October 19, 2021 to make the necessary updates to their governing documents and corporate records to bring them into compliance with ONCA.
There are just over three months left until the three-year transition window closes on October 18, 2024. Until then, the rules in your articles and bylaws continue to be valid, provided they were valid before the ONCA took effect.
What if I miss the deadline?
If a NFP does not complete the transition by the October 18, 2024 deadline, its governing documents will be deemed to comply with ONCA. This has the potential to create confusion, as it may not be immediately clear which by-law provisions are still valid and in force, and which have been invalidated by ONCA. This may take some time to address, and in the meantime, the NFP will have to navigate a mishmash of potentially conflicting obligations.
With three months left on the clock, we recommend that corporations who have not yet completed the ONCA transition to do so quickly, before the window closes.
How do I comply with ONCA?
To complete the transition to ONCA, first gather your corporation's governing documents: Letters Patent, Supplementary Letters Patent, if any, and By-laws (sometimes referred to as a Constitution). All will need to be reviewed, and any amendments to the Letters Patent or Supplementary Letters Patent will need to be filed with the Ontario government. Any updates made to the By-laws will need to be implemented, and this will likely result in changes to your governance, financial, and record-keeping practices.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.