Ontario plans to implement its Not-for-profit Corporations Act (ONCA) in July of this year. In the unlikely event that you haven’t been paying attention, the ONCA will replace the Ontario Corporations Act for not-for-profit organizations that are incorporated in the province (as opposed to federally). Broadly, the changes will:
- Enhance corporate governance and accountability
- Simplify the incorporation process
- Give more rights to members
- Better protect directors and officers from personal liability
However, we are waiting for the government to release a number of important documents, and the effective date may yet change.
According to Mark Blumberg and Kate Robertson, this switch from OCA to ONCA will affect more than 50,000 not-for-profit corporations. For the time being, however—without further guidance—there is little to do besides generally familiarizing yourself with the new law. You can start by looking at the Ministry of Community and Social Services’ ONCA portal.
The guidance documents we can expect to see include regulations, a plain-language guide, a draft default organizational bylaw, forms, a non-profit incorporators handbook, and an electronic toolkit.
Proactive organizations can start reviewing the changes they’ll need to make. Consider the ministry’s Transition Checklist, which outlines a number of issues incorporated not-for-profits will need to consider as they make the transition from the OCA to the ONCA regime. For example:
- Review purposes to make sure they reflect the corporation’s current or proposed future activities, and are consistent with other laws or court decisions which may govern the corporation
- Review to ensure they are not in conflict with ONCA or its regulations, as the provision in ONCA or the regulations generally take priority
- Review special provisions governing public benefit corporations, directors, powers of the corporation and membership
Blumberg and Robertson have more to say about how organizations can prepare. Start by asking yourself these questions:
- Do you have copies of the letters patent, supplementary letters patent and bylaws for the organization?
- Do you have a minute book?
- Are the objects/purposes of your organization up-to-date and relevant for the current work of your non-profit?
- Is your non-profit’s governance structure appropriate?
- Do you have a copy of your most recent bylaws and are there any particular features of your bylaws that must remain within the new bylaws under the ONCA?
- Do you know who your members are?
- Does the organization want to maintain its current name?
- Do you have a current list of directors with their residential addresses, telephone numbers and email addresses?
- Do you have a current list of officers, e.g., chair, president, secretary, treasurer, etc.?
- When is the organization’s annual general meeting held?
Even if the government gets everything together in time for the Act to come into force by July, there will be a three-year transition period to allow organizations to comply with the law.
So, there’s no rush to act, but expect to hear a lot more by summer!
First Reference Human Resources, Compliance and Internal Controls Editor