You not-for-profit organizations and charities out there probably remember that, in the not-too-distant past, the federal and Ontario governments enacted new laws governing the activities of NFPs. Well, some expect these laws to come into force within the next six months. That’s sooner than you probably think.
One of the key features of the acts is that they will make non-profits and charities operate more like for-profit corporations.
In general, both acts are “intended to enhance corporate governance and accountability for NFPs, simplify the incorporation process, enhance members’ rights and better protect directors and officers from personal liability.”
Law firm Pallett Valo LLP offers commentary on the changes here. Organizations should discuss the changes with their legal counsel to understand the changes and what actions they’ll have to take. Consider these questions:
- How will the new acts affect your current organizational structure and what are the possible advantages of continuing under the legislation of a different jurisdiction?
- Which, if any, of your bylaws should you amend before the new legislation comes into force, e.g., to remove membership classes?
- Which articles of incorporation or continuance and bylaws should be put into place within specified time periods after the relevant coming-into-force periods?
- How will you ensure ongoing maintenance and filing of corporate records and the requirements for audit or review engagements with respect to financial statements under the relevant legislation?
You can read our continuing coverage of not-for-profit and charity news here.
We updated Not-for-Profit PolicyPro earlier this year to reflect some of the changes that will result from the enactment of the federal and Ontario not-for-profit corporations acts, and we’ll keep you up to dat as to all new requirements as the laws come into force.
First Reference Internal Controls, Human Resources and Compliance Editor