After more than 11 years, the Ontario Not-for-Profit Corporations Act (“ONCA”) will finally come into force on October 19, 2021!
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.
Rules For Not-For-Profit & Charitable Corporations
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
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.