What is ONCA?
The Not-for-Profit Corporations Act, 2010 (Ontario) (ONCA) affects almost all Ontario corporations that are currently under the Ontario Corporations Act (OCA). ONCA will probably come into effect in 2020. At the end of three years from whatever date the ONCA comes into force the letters patent, by-laws, and special resolutions will be deemed to be amended to conform with the requirements of the new Act if the organization has not changed them. For some groups this could create significant problems. Most organizations will want to modify their articles and by-laws to work under ONCA. The corporate changes provide an important opportunity for non-profits and charities to take stock of their governance practices and policies and move over to modern acts.
Here is our blog on the ONCA
How many Ontario non-profit corporations will be affected by ONCA?
It is difficult to know. While there are 59,000 Ontario non-profit corporations under the Ontario Corporations Act it is clear that many are dissolved or inactive. However, even if there are 30,000 Ontario corporations that need to deal with ONCA this will be a very large number of non-profits making changes in a very short period of time.
What is the difference between the CNCA and ONCA?
The "Canada Not-for-profit Corporations Act" (CNCA) which came into force on October 17, 2011 and affects Federal non-profits. It does not affect Ontario non-profits under the Ontario Corporations Act.
Do you need legal advice when moving over from the old act to the new act?
No. As with most legal matters you can do it yourself or you can obtain legal assistance. It may be helpful for some organizations to work with lawyers who are knowledgeable about corporate law, governance, charity law, and practical issues affecting non-profits and charities. It can save the non-profit or charity significant time and aggravation. The biggest mistake that many organizations make is to allow these corporate transitions to distract them inordinately from other important priorities and compliance obligations. While for some the change in acts will be a more technical matter others can use the change to improve governance practices. We have helped clients make seamless transitions so they focus on fundraising, programs, and other matters that are central to the non-profit or charity.
What are some preliminary issues non-profits and charities should consider as part of the new CNCA and ONCA changes?
- Are you federal or Ontario non-profit corporation? It makes a difference! Check out your letters patent (articles of incorporation) or try searching the free Industry Canada database: https://www.ic.gc.ca/app/scr/cc/CorporationsCanada/fdrlCrpSrch.html?locale=en_CA Here is also a list of Ontario corporations obtained by Blumbergs.
- Ontario corporations may want to consider continuing to the Federal jurisdiction. We have written about this increasingly popular option in a number of articles including "Fed up with ONCA yet? Consider skipping it altogether and moving to the Federal CNCA"
- Do you have copies of letters patent, supplementary letters patent and by-laws? Do you have a minute book? If not, copies can be obtained from Industry Canada or Companies Branch
- Are objects up to date and relevant? Do they cover all of your current activities? If not consider updating your objects. If you are a registered charity, you may need to ask CRA for preapproval. This can take between 8-12 months and they will need to receive both objects and a detailed description of activities for CRA to review. You need to be careful and precise with objects, otherwise they may be considered vague or broad and not charitable
- Is your governance structure appropriate? If not what do you want? Is it “working board”, “policy board”, “fundraising board”, or a dysfunctional board?
- By-laws - Are there any particular features of your by-law that need to be kept for the new by-law? Generally, it is best to start with new clean by-law under a new act and modify as required
- Members – Do you know who your members are? (This is not board members!) Members are like shareholders in a for-profit company. Does the organization require more than one membership class? If so, what attributes will each membership class have (ie. Name, vote, etc)? Are you aware of new member rights and voting by class in some cases with even non-voting members voting!
- Name - Does the organization want to maintain its current name? Or does it want to use a different name and if so do you have various proposed names? NUANS name search should be conducted for new proposed names
- Current list of directors with their residential addresses, occupations, e-mail addresses, and telephone numbers
- Current list of officers – eg. Chair, President, Secretary, Treasurer, etc.
- Office Addresses – Registered or head office, mailing address, etc.
- Are you up to date in corporate filings? - if not you may want to do arrears in filings
- Annual Meeting - When is the organization's annual general meeting held? Does the organization wish to obtain membership approval at the AGM or does it wish to have another Special General Meeting to approve the corporate changes necessary?
We have assisted many Ontario non-profit corporations with strategic discussions around changes that could be undertaken now or whether the best course of action is to wait. Contact us if you wish to retain our law firm for such a discussion on your Ontario non-profit or charity.