Ontario's Not-for-Profit Corporations Act to be proclaimed after a decade

Intermediaries like law firms can complete transactions on behalf of not-for-profits, businesses

Ontario's Not-for-Profit Corporations Act to be proclaimed after a decade

As Ontario’s Not-for-Profit Corporations Act, 2010 comes into force on Oct. 19, provincially incorporated not‑for‑profits should review their governing documents and implement changes to ensure compliance within three years from proclamation, a blog post by Iler Campbell LLP has said.

“While there is relief that ONCA is finally coming into force, some provincially incorporated not‑for‑profit corporations may be more inclined instead to shift to the federal legislation, the ‘Canada Not‑for‑profit Corporations Act’ (CNCA), to avoid complying with ONCA all together,” the firm’s blog post said.

The new legislation is expected to introduce the following changes for not-for-profit corporations, among others:

  • to improve the efficiency of the incorporation process
  • to distinguish between public benefit corporations and other not-for-profits
  • to allow by-laws to provide other ways to vote, including via mail, telephone or electronic means
  • to permit the appointment of a proxy holder if allowed by the articles or by-laws
  • to clarify that participating in commercial activity is permissible if it supports the not-for-profit purposes
  • to simplify the review process for financial records
  • to require the articles to mention that there are two or more classes or groups of members, where applicable
  • to clarify the rules for governing the corporation and increasing accountability
  • to provide directors with a due diligence and good faith reliance defence
  • to specify the requirements for directors and officers to report a conflict of interest in certain circumstances
  • to allow members to take actions if they think directors are not acting in the corporation’s best interests
  • to improve the access of members to financial records
  • to remove Office of the Public Guardian and Trustee approval from the incorporation requirements of charitable corporations

The new legislation applies to corporations which do not have share capital and which are incorporated under an act of Ontario’s legislature, except for the Co‑operative Corporations Act, said the blog post by Iler Campbell.

The new Ontario Business Registry will also launch on the same date. This will allow not-for-profit corporations to access government services online 24 hours a day and 365 days a year, with instant fulfilment and automated notices, so that they may efficiently complete more than 90 transactions, including registering a new business and dissolving an existing business. The new registry aims to help not-for-profits save their time, money and energy, which they can then devote to recovering from the effects of the COVID-19 pandemic.

The registry allows intermediaries to conduct transactions on the not-for-profit’s behalf through authorized service providers or through mail. Qualified intermediaries, who can complete transactions via email, include Ontario lawyers and paralegals, law clerks filing under a lawyer’s direction and guidance, chartered professional accountants and members of the Ontario Association of Professional Searchers of Records, who regularly file for corporations, law and accounting firms and other entities.

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