Update on Ontario’s Not-for-Profit Corporations Act, 2010
By Kathy O'Brien
After almost 11 years on the books, Ontario’s Not-for-Profit Corporations Act (ONCA) will be proclaimed into force on October 19, 2021.
What does this mean for our non-profit and charitable clients that are currently incorporated under Ontario’s Corporations Act?
First, nothing needs to be done immediately. Ontario non-profits have 3 years to make the changes required to their constating documents (incorporating documents and by-laws) to align with ONCA’s new rules.
INQ Law can provide guidance on whether your letters patent must be amended to comply with ONCA. For example, if your non-profit has multiple classes of members, these now must be set out in the “Articles” of incorporation. This is also a great opportunity to review your corporation’s objects/purposes and ensure they are up-to-date, accurate and comprehensive. The purposes should encompass what activities the corporation carries on today and aspires to carry on in the future.
We are also updating our template non-profit by-law to comply with ONCA’s specific rules, including around notices sent to members, directors’ indemnities, and borrowing powers. Your organization’s by-laws will need to be updated within the 3-year transition period, and we can guide you through that process.
The transition to ONCA rules also gives your Board an opportunity to revisit its governance structure: member classes, size and composition of Board, Board committees, and officer positions. We would encourage you to work with us to ensure that your by-laws not only comply with ONCA but also embrace good governance practices around issues such as conflict of interest, confidentiality, Board responsibilities and individual director expectations.
We will also prepare a package for your Board, including a deck and/or briefing note, to walk the Board through the key governance changes effected by ONCA.