UPDATE: you can now access the updated handbook (and other PGT publications) on the main PGT page here.

In the 83-page Handbook you’ll find information about corporate names, how to apply for incorporation, starting up, maintaining (operating) the corporation, filing requirements, charitable corporations, the role of the Public Guardian and Trustee, and more. 

Importantly, this version is updated to reflect the Ontario Not-for-Profit Corporations Act (ONCA) that came into effect October 19, 2021. 

Of course, it isn’t legal advice and doesn’t speak to specific problems, but it is a very helpful general guide. If you’re a CCCC member looking for information about specific problems, feel free to reach out to our Member Support Team! 

The post New Ontario Incorporator’s Handbook Now Available appeared first on CCCC Blogs.

ONCA COMES INTO FORCE

As noted in Ontario’s news release, ONCA will “provide a modern legislative framework for Ontario’s not-for-profit corporations. The legislation will significantly reduce the bureaucratic burden on not-for-profit corporations, moving from paper-based filings to digital services and providing them with enhanced flexibility.”

This is great – and long anticipated – news for Ontario charities.

It coincides with the launch of Ontario’s new Business Registry. The Registry will facilitate 90+ different transactions, including registering new corporations and dissolving existing ones. The new Registry system means that “for the first time ever, Ontario not-for-profit corporations will be able to access on online government system for registrations and filings saving time and reducing duplicate paperwork.”

For example, starting October 19, the annual Corporations Information Act filing will be processed through the Registry. From May 15 until the Registry launches, corporations are exempt from that filing requirement, if the return is due during that period.

You can sign up with Service Ontario to receive email updates with information about how to access the registry.

A FEW KEY COMPONENTS

While there’s more in ONCA than the list below, there are some key components you should know about.

Terminology: all Ontario corporations that are registered charities are called public benefit corporations

Directors: there is a minimum of 3 and charities can have either a fixed number or a range

Members: membership classes must be in the articles; membership conditions must be in the bylaws; greater member access to financial records

Audits: there is a lowered threshold for requiring audited financial statements; can substitute a review engagement with an extraordinary resolution with annual revenues of less than $500,000

Directors: sets out a statutory duty of care and a due diligence and good faith reliance defence; specific requirements to report a conflict of interest

Transition: You’ll still have three years to transition to the new ONCA rules, so there is still lots of time to make any necessary changes.

We’ll keep you updated as more information becomes available. In the meantime, we’ve got a list of resources below if you want to learn more.

DID YOU KNOW?

CCCC Accreditation is possible for small to mid-size charities.

Under ONCA, Ontario charities with annual revenues less than $500,000 can opt for a review engagement instead of an audit. If that’s your charity, you can now be eligible for CCCC Accreditation with a review engagement! This is great news for charities that haven’t pursued Accreditation because of the audit requirement.

You can find out more in our CCCC Accreditation brochure. 

WANT TO KNOW MORE?

You can check out these resources if you want to know more about ONCA.

Ontario Government

Rules For Not-For-Profit & Charitable Corporations

Sample Organizational Bylaw

Plain Language Guide To ONCA

Transition Considerations

ONCA Legislation

ONCA Regulations

CCCC

January 2020: Beyond Early 2020

January 2018: ONCA Targeted for 2020

November 2017: Ontario’s Corporations Act Receives Refresh as Interim Measures Before ONCA

October 2015: ONCA Proclamation Delayed Again

September 2013: Getting Ready for ONCA

The post FINALLY! Ontario Not-for-Profit Corporations Act comes into force October 19 appeared first on CCCC Blogs.

Ontario

On March 31, 2020 the Ontario government issued an Emergency Order that

• Allows all corporations under the Corporations Act and the Business Corporations Act to hold meetings of directors, shareholders and members virtually (electronically or by phone)
• Extends the timeframe by which corporations must hold Annual General Meetings (AGMs) in certain circumstances related to COVID-19.

The Order is retroactive to March 17, 2020 and can found below and here.

Church and charity leaders are invited to share how they are responding to the COVID-19 pandemic within their organization in our online community forum The Green: COVID-19 Response Room. 

Posted April 1, 2020 @ 10:00am

The post COVID-19: Options for Corporate AGMs in Ontario appeared first on CCCC Blogs.

There will be a two-year notice period before the ONCA will come into force, as well as a three-year transition period for organizations to transition. As such, not-for-profit corporations incorporated under Ontario legislation should be advised that they will likely need to be fully transitioned by 2023.

In order to transition, organizations will need to review and amend their corporate governance documents to bring them into compliance with the ONCA and its regulations. Organizations may wish to take this opportunity to speak with their lawyer regarding whether it would be appropriate to transition federally under the Canada Not-for-Profit Corporations Act (“CNCA”) is appropriate. Organizations should not hastily start transitioning, as no specific date has been identified as to when the ONCA will come into force.

The post ONCA Targeted for 2020 appeared first on CCCC Blogs.

The new British Columbia Societies Act (the “Act“) will replace the current Society Act on November 28, 2016. While it is, in many ways, similar to the outgoing Society Act, it also introduces a number of new changes. Some of the key changes have been reviewed in previous Noteworthy blog posts and can be found here and here.

Organizations currently incorporated under the BC Society Act will be required to transition under the Societies Act by November 28, 2018. Failure to transition by this time will allow the registry to dissolve the society. Prior to transitioning, societies must have their filings up to date.

As part of this transition process, a society must file with the registry its constitution and by-laws, including any amendments online. Certified copies of the society’s original constitution, by-laws, and special resolutions are available from the Registry in a transition package for a fee of $40. This transition package is aimed to assist societies with transition and is available here. It is important to note that is it not a requirement that societies order this transition package.

The numerous changes to the legislation can be reviewed at the BC Registry Services pages located here and here. While the changes are too numerous to list, some of the noteworthy changes that become effective on November 28, 2016 include:

Unalterable Provisions

Under the new Act unalterable provisions will no longer be permitted in corporate documents. Provisions that were previously ‘unalterable’ will now be subject to amendment in accordance with the Act. A society that adopts new bylaws on transition cannot change or delete any unalterable provisions that were in its constitution. These provisions must be transitioned under the new Act and be identified as ‘previously unalterable’. Once transitioned, a society can then alter those provisions by complying with the appropriate amendment procedure.

Publicly-Funded vs Member-Funded Societies

The new Act distinguishes between publicly-funded societies and member-funded societies. Publicly funded societies include organizations such as charities and others that receive significant public funding. Member-funded societies, on the other hand, are societies funded mainly by its members to carry on activities for the benefit of its members. Member-funded societies may take the form of sports clubs or professional organizations. A variety of societies are prohibited from being member-funded societies, including registered charities and societies authorized under the Independent School Act and have received a grant for the previous school year.

Director Requirements

The Act requires publicly-funded societies, including registered charities, to have a minimum of three directors, at least one of whom is ordinarily resident in British Columbia. The Act prescribes director qualifications but expressly allows societies to impose additional qualifications in their by-laws.  The Act requires that directors who do not meet the qualifications, either under the Act or under a society’s by-laws, must resign.Directors and senior managers will be obliged to disclose to the directors all material interests in matters that may conflict with their duties to the society

Membership Provisions

The previous Act required five members for incorporation and three members thereafter; however, the Act permits a society to incorporate with as few as one person. The Act also permits different membership classes and allows different rights and obligations to apply to each class.

Governance/Annual General Meeting and Resolutions

The Act allows a society’s annual general meetings to be carried out by written consent instead of in-person meetings and to provide electronic notice of participation in meetings. The threshold for approving a special resolution has been reduced from 75% of votes cast to the lesser 66% of votes cast. However, a higher voting threshold for special resolutions can be established in the by-laws. Special resolutions will become effective immediately and will not need to be filed prior to becoming effective.

Financial Statements

Applicable Nov. 28, 2016 financial statements issued by a publicly-funded society must include a note setting out remuneration paid to its directors, in all capacities, and its 10 highest paid employees and contractors on its financial statements prepared after Nov. 28, 2016. Only those employees and contractors that are paid in excess of $75,000 must be noted. In addition, a society must set out the details respecting any financial assistance given outside of the ordinary course of its activities such as loans or guarantees.

Borrowing Powers

A further change in the Act relates to the borrowing powers of societies and applies to all societies as of November 28, 2016, whether or not they have transitioned. The previous Act had restricted a society from borrowing unless authorization by a special resolution, which required approval by at least 75% of the society’s voting members, was received. The borrowing powers under the Act gives the directors the general power to authorize a society to borrow money, subject only to any restrictions or prohibitions in the society’s by-laws.

Corporate Record Requirements

Finally, the Act clarifies the corporate record-keeping and access requirements for societies. Section 20 of the Act prescribes the records that must be kept and include, among others:

• financial statements
• resolutions (including special)
• minutes of members and directors meetings
• register of members, register of directors including consent to act as director
• certificate of incorporation, constitution, by-laws, and statement of directors
• confirmations
• court, tribunal, or government orders

Records may be kept in physical or electronic form provided that necessary precautions are taken and they are available for inspection at the society’s registered office through a computer or other electronic technology.  The Act also provides some guidance as to how long certain corporate records must be maintained. Under the Act certain corporate documents must be made available for inspect to members and the public upon request unless the by-laws impose a restriction on this practice.

Conclusion

The new elements of the Societies Act are intended to improve and simplify the functioning of societies, while strengthening the accountability of charities to the public. Societies are encouraged to familiarize themselves with the changes and prepare for the transition to the Societies Act. Societies will have until November 28, 2018 to transition, which is when the next wave of he provisions will come into effect.

The post One month until the New BC Societies Act appeared first on CCCC Blogs.

The new British Columbia Societies Act is set to replace the current Society Act on November 28, 2016. While it is, in many ways, similar to the outgoing Society Act, it also introduces a number of new elements and concepts. Some of the key changes have been reviewed in a previous Noteworthy blog post and can be found here.

One of the new requirements under the Societies Act for publicly funded societies[i] is the disclosure of remuneration for directors, employees, and contractors.[ii]

Directors

The financial statements of a publicly funded society must include a note listing all the directors that the society has paid during the period covered by the financial statements along with their position or title, the amount of remuneration, and  if remunerated for acting in a capacity other than director, a description of the capacity in which each such director acted. The names of the directors do not have to be disclosed.

Employees and Contractors

The note must also include the remuneration paid by the society to all employees and contractors whose remuneration was at least $75,000, unless there are more than ten employees and contractors remunerated at over $75,000, in which case only the ten most highly remunerated persons must be included in the list.

The list must include

• In the case of employees, each employee’s position or title and, in the case of contractors, the nature of the contractual services provided by each contractor; and
• the amount of remuneration paid during the applicable period to each of those individuals

The list may, but is not required to include, the individuals’ names.

The second option is to provide the total number of individuals earning over $75,000 and the total amount of remuneration paid to them during the applicable period.

Conclusion

While, at first glance, these new requirements may seem overly invasive to societies, they are seen as important accountability and transparency measures, which are meant to promote both members’ and donors’ confidence and trust in publicly funded societies. [iii] Nonetheless, by not requiring the names of the individuals, the new legislation seeks to balance these lofty objectives with the protection of individual privacy.[iv]

[i] This requirement does not apply to member-funded societies

[ii] section 36(1) of the Societies Act and sections 8 and 9 of the Regulations

[iii] Societies Act White Paper: Draft Legislation with Annotations, August 2014, section 35, online: http://www.fin.gov.bc.ca/pld/fcsp/pdfs/SocietyActWhitePaper.pdf

[iv] Ibid.

The post Remuneration Disclosure Obligations of B.C.’s New Societies Act appeared first on CCCC Blogs.

Note: this requirement does not apply to charities incorporated under provincial legislation (e.g., Alberta’s Societies Act or Ontario’s Corporations Act) or to those that are not incorporated (e.g., those organized by declaration of trust). If your charity is unsure of its status, consult Corporations Canada’s online database of federal corporations as well as your own governing documents.

Although the deadline has passed, there is still time for federally incorporated charities to file their articles of continuance, but they must do so as soon as possible, and before they are dissolved by Industry Canada.

Industry Canada previously indicated that it would be sending out notices of dissolution to corporations in phases, based on their filing history. According to Industry Canada’s website, “corporations that have never filed an annual summary or that have not filed in several years are presumed to be inactive and will be among the first groups to be issued a Pending Dissolution Notice. Corporations that are up-to-date with their annual filings will be among the last groups.”

It has been confirmed that Industry Canada has begun sending out notices. For a sample of what the notice looks like, see the Notice of Pending Dissolution posted on the GlobalPhilanthropy.ca blog.

The notice is being sent to corporations at their address recorded with Corporations Canada. However, if a corporation has moved and/or has not updated its records, it may not receive the notice. Charities should take the opportunity to review Corporations Canada’s database and ensure their records are up to date, and confirm that nothing is outstanding with respect to their CNCA transition.

Corporations that have been issued the notice and do not complete the transition before the end of the 120-day period will be assumed to be inactive and will be dissolved. As such, federally incorporated charities that have not yet applied for continuance should seek legal counsel immediately to prepare and file the necessary continuance documents.

For more information on the CNCA, see Corporations Canada’s website as well as the resources available to CCCC members here.

The post CNCA Deadline Has Passed; Notices of Pending Dissolution Have Begun appeared first on CCCC Blogs.

Charities that are provincially incorporated in Ontario, under the current Ontario Corporations Act, should also be aware that new legislation (the Ontario Not-for-Profit Corporations Act, 2010, or “ONCA”) will soon be in force, which will also likely require some action steps. For more information about that process, see our article “Getting Ready for the ONCA: An Update”.

With these legislative developments, it is imperative that charities verify whether they are federally or provincially incorporated. The best way for them to confirm this is to review their constating documents (i.e. letters patent or articles of incorporation) which will contain this information.

As an added measure, they may be able to search an online database. Corporations Canada maintains a database of federal corporations here: https://www.ic.gc.ca/app/scr/cc/CorporationsCanada/fdrlCrpSrch.html?locale=en_CA

In addition, an Ontario law firm recently published a directory of Ontario not-for-profit corporations, available here: http://www.globalphilanthropy.ca/blog/list_of_ontario_non_profit_corporations_revealed_for_the_first_time

These databases should be used in conjunction with a charity’s own governing documentation to verify their status. If they are, in fact, federally incorporated, and have not yet begun the transition to the CNCA, they should review CCCC’s article and seek legal counsel as soon as possible.

The post Where Are You Incorporated? appeared first on CCCC Blogs.

When does the ONCA come into force?

The ONCA received Royal Assent on October 25, 2010, and was originally targeted to come into force on January 1, 2013, but for various reasons, has been delayed several times. The most recent update from the government states that the ONCA will not be proclaimed into force until at least six months after an enabling statute, Bill 85, is made law. Bill 85, also known as the Companies Statute Law Amendment Act, 2013, is expected to be debated in the Ontario legislature this Fall, so the ONCA will probably not come into force until mid-2014, at the earliest. 

What do charities need to do to get ready?

Once ONCA is proclaimed into force, it will automatically apply to most provincially incorporated charities in Ontario. Thus, unlike the Federal CNCA, no formal application for continuance will be necessary.¹ However, Ontario charities may need to amend their constating documents² to bring them into conformity with the new legislation. If they fail to do so within three years of the ONCA coming into force, any inconsistent provisions in their governing documents will be deemed to be “amended to the extent necessary” to bring them into conformity with the Act (s. 207(2)). In addition, under a new requirement proposed by Bill 85, charities may be required to move certain provisions from their by-laws to their articles during the three year transition period, otherwise those provisions will become “invalid”.[3. This proposed rule is found in s. 33 of Bill 85, and would apply to  “any provision that is required…to be contained in the corporation’s articles”. It appears that this would include provisions related to membership classes and the number of directors on the board, and possibly other provisions as well (the ONCA’s regulations have not yet been finalized).

Noteworthy is provided for general information purposes and does not constitute legal or professional advice. Every organization’s circumstances are unique. Before acting on the basis of information contained in this blog, readers should consult with a qualified lawyer for advice specific to their situation.

Since these “deeming” and “invalidating” provisions may cause gaps, confusion, and uncertainty in a charity’s governing documents, it is advisable to begin the process of reviewing the changes that will be introduced under the new ONCA and determine whether amendments or restructuring is necessary. Professional advice is recommended, but as an interim step, charities may wish to take advantage of the following resources:

1. CCCC has developed resources to assist charities in their review of their governing documents. For more information, see our recent article “The Importance of Bylaws for Charities – And What They Should Contain”. We will be developing additional resources in the future. In the meantime, consider attending our 2013 Annual Conference, where we will have a workshop specifically devoted to this topic.
2. The Ministry of Consumer Services has prepared tools to assist not-for-profit corporations with this transition. A general information page, transition checklist, and a draft default bylaw are now available on its website. The government has also released a plain language guide explaining the ONCA and its requirements.
   
3. The government has granted funding to Community Legal Education Ontario (CLEO) to provide a variety of supports to not-for-profit corporations regarding implementation of the new Act. These supports will include webinars, workshops, a website, development of tools, such as fact sheets and checklists, and customized support.
4. CCCC members may access a Q&A document recently prepared by the Ministry of Consumer Services, available here on our website.

Although the ONCA is not yet in force, Ontario charities should take advantage of the time now available to ensure that their transition is a smooth and successful one.

NOTES:

The post Getting Ready for the ONCA: An Update appeared first on CCCC Blogs.