On October 19, 2021, Ontario launched the new Ontario Not-for-Profit Corporations Act (“ONCA”). So, what does this mean for your Ontario Non-profit? Read on to learn more.
Ontario Non-profit corporations that were incorporated before October 19, 2021, were incorporated under the laws of the Business Corporations Act (Ontario) (“OBCA”). The OBCA is the same Act that governs for-profit corporations in Ontario.
The launch of the new ONCA means that all Ontario non-profit corporations will automatically be governed by the ONCA (rather than the OBCA, but not right away. There is a three-year window (which ends on October 18, 2024) for non-profits to change their Bylaws and Articles to be in line with the ONCA, but until then, as long as your current Bylaws and Articles are in line with the OBCA, then they are still valid. Once October 18, 2024, rolls around, anything stated in your corporation’s Articles or Bylaws that is not in line with the ONCA will be negated. In other words, the provisions of the ONCA will overrule your corporation’s rules—even if those rules used to be in line with the OBCA.
So, how do we ensure our non-profit remains compliant with the new ONCA?
Technically, no action needs to be taken by non-profits. The transition is automatic whether your corporation has adjusted to it or not. Anything that your bylaws or articles say that conflicts with the new ONCA will just be automatically negated, and the new law will be applied (there are a few exceptions).
However, that being said, it is still best practice to take the time to make changes to (or create completely new) bylaws and articles for your corporation that align with the ONCA. This will ensure that your articles and bylaws are current and avoid any confusion down the road. This may also be a great opportunity to reflect on your corporation’s governing documents and update your records in other ways as well, such as transitioning to digital corporate record storage.
If we choose to update our Bylaws and Articles, how long will it take?
This is a tough question to answer, as the timeframe will vary greatly depending on the size of your non-profit and how organized (or not) your current records are. Depending on how easy it is for all of the members to get together to approve of the changes, it could take many months, or even longer, to finalize everything (but, luckily, there’s a three-year window to get organized).
Do we need a Lawyer to make these changes?
Technically, no, a lawyer is not required to make these changes. They may be helpful, though, to ensure that you make all the required changes and to provide you with advice throughout the process. It will also save you time and the headache of trying to learn everything yourself—if your corporation can afford the legal costs.
There are also great resources out there to help you with this—CLEO has a Bylaw builder, which can be a great tool whether you’re looking to modify your own or create completely new Bylaws. The Government of Ontario also has a standard set of Bylaws that can be used—you can find those here.
Who is responsible for amending/creating new Articles and Bylaws?
The non-profit directors are responsible for making changes to the bylaws and/or articles. They may choose to put together a team of certain people to tackle this task (a board committee), as having multiple people’s insights and feedback may be useful. Once the changes are made, and before submitting them to the government, the directors need to share the new Bylaws and Articles with the members of the non-profit to be approved. This can either happen at the Annual General Meeting of members, or the directors can call a Special Meeting of members at any point throughout the year (so long as proper notice has been given). Once both the directors and members have approved of the governing documents, the Articles of Amendment can then be submitted to the government of Ontario.
What will I have to change to comply with the new ONCA?
What you will need to change in your Articles and Bylaws all depends on what your current Articles and Bylaws state. Some non-profits may decide to modify just the areas that need to be changed, while others may decide to do a complete overhaul of their governing documents and start from scratch. This is something that will need to be decided on by the board of directors after a review of their current governing documents.
Below is a general list of some things that may need to be changed in order to comply with the new ONCA.
- What your non-profit’s purpose is
- Rules around members (how to become one, how to end a membership, if a corporation can be a member, voting rights, other rights, etc.)
- Rules around finances (financial statements, audits, etc.)
- Rules around directors or officers
- Rules around meetings (where they take place, notice required, etc.)
- And more
A lot of the changes that need to be made will also depend on whether or not your corporation is a registered charity or a Public Benefit Corporation. Public Benefit Corporations are non-profits that are either charities or receive more than $10,000 in a financial year from the government or outside donations. If your non-profit is a registered charity or public benefit corporation, this may affect how you write your Articles and Bylaws. Registered charities will want to be extra careful to ensure that any changes they make still qualify them as charitable so that the CRA approves of their changes and their status as a Registered Charity remains.
Once we’ve submitted the new Articles (Articles of Amendment), is that it?
For many non-profits, yes. Once your submission is approved, that’s it. You’ll want to update your corporate records with all of the accumulated resolutions and with the new articles and Bylaws that have been put in place. Then, you can carry on business as usual with the new rules the corporation has adopted.
However, suppose your non-profit is also a Registered Charity with the CRA. In that case, you’ll need to submit your new governing documents to the CRA to ensure that your corporation still qualifies as a Registered Charity. There may be other requirements that Registered Charities must also comply with.
How much will it cost?
This will depend on whether you hire a lawyer to help you or not. The government fee to file the Articles of Amendment is currently $130.00.
What if we’re incorporated as a Federal non-profit but located in Ontario? Does the new ONCA apply to us?
No. Federal non-profits registered in Ontario do not need to make any changes to comply with the ONCA, as they will continue to be governed under the laws of the Canada Not-for-profit Corporations Act.
We hope this article gave you a better understanding of the new Ontario Not-for-Profit Corporations Act. If you have any questions, please don’t hesitate to contact us here. If you decide that you also want to switch your corporate records over to digital format, this is a great opportunity to do just that! We offer a robust platform for managing and sharing your corporate records—secure and reserved for those you trust. Sign up today!
