The deadline to transition to the Ontario Not-for-profit Corporations Act, 2010 is fast approaching. What does this mean for your organization?
Most non-share capital corporations incorporated in Ontario have until October 18, 2024 to bring their governing documents (i.e., letters patent, supplementary letters patent, by-laws, special resolutions, etc.) into compliance with the Not-for-profit Corporations Act, 2010 ("ONCA").
If changes are not made by this deadline, any provisions in the corporation's governing documents that are inconsistent with the ONCA will be deemed to comply with the new legislation, subject to a few limited exceptions. This could cause confusion regarding a corporation's corporate governance obligations.
Background
On October 19, 2021, the long-awaited ONCA was finally proclaimed into law. The ONCA replaced Part III of the Corporations Act and made significant changes to modernize and refresh the legislation that applies to non-share capital corporations in Ontario.
We encourage you to review our article published when the Government of Ontario announced the introduction of the ONCA, providing some guidance as to what organizations could expect during the transition period.
What is the significance of the deadline?
If a corporation does not transition to the ONCA by October 18, 2024, its governing documents will be deemed to comply with the ONCA potentially creating a confusing patchwork of obligations. It may not be clear which by-law provisions are still in force and which have been superseded by the ONCA, for instance. This could cause confusion for the corporation's directors and members relating to the corporation's corporate governance rules.
We therefore recommend completing a review of your governing documents and adopting new, fully-compliant by-laws or by-law amendments to comply with the ONCA before the deadline.
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.