Moving to Ontario’s Not-for-Profit Corporations Act (ONCA): Practical considerations
Written by: Benjamin Miller, Staff Lawyer, Nonprofit Law Ontario, Community Legal Education Ontario (CLEO)
Disclaimer: The following is general legal information not legal advice tailored to your specific situation.
On Tuesday October 19, 2021, Ontario’s Not-for-Profit Corporations Act (ONCA) took effect. The ONCA sets out the basic governance rules for many non-profits incorporated under Ontario legislation, such as Ontario’s Corporations Act (OCA) and special Acts.
In this blog post, I explain some important things non-profits may need to know about the ONCA. Throughout, I link to resources on CLEO’s Nonprofit Law Ontario website.
Other laws that apply to non-profit housing providers
Non-profit housing providers often have to follow other laws like the Housing Services Act that may affect their governance.
ONCA says that when it conflicts with another law or regulation, the other law or regulation trumps the ONCA. So, if you think you’re facing such a conflict, you may want to get legal advice to see if it’s possible to comply with both laws.
Non-profits have three years to comply
If the ONCA applies to your non-profit, you have until October 18, 2024 to comply. In the meantime, your governing documents, such as your letters patent, bylaws, and policies, continue to be valid. This is true even if they conflict with ONCA, as long as they were valid before the ONCA took effect.
In practice, this means that most non-profits can keep relying on their bylaws and policies to know what their rules are. But if those documents are silent about something, the ONCA gives the answers, not the OCA.
Steps to comply with the ONCA
Once you’ve determined the ONCA applies to your non-profit, you’re probably wondering what your next steps are. Below, I’ll walk you through the steps non-profits may need to take to comply with the ONCA:
- Get key documents together
- Update your bylaws
- Update and file articles of amendment
- Follow the new rules
Step 1: Get key documents together
Non-profits may need a number of important documents to comply with the ONCA. There’s a list of which documents you may need and where you might find them on our website.
Step 2: Update your bylaws
The ONCA may mean a number of changes, big and small, for your bylaws. Some may be required. And others will be new opportunities you can take advantage of. Here are a few common examples.
Optional changes you might want to make:
- Corporate members: Corporations can now be members of non-profits. But the bylaws must explicitly allow this.
- Disciplinary powers: You can give a committee of directors, members, or both, the power to discipline or expel members. But to do this, you must give the reasons a member may be disciplined, how much notice they’ll get, and when and how they’ll have an opportunity to respond.
- Members’ power to call special members’ meetings: Under the OCA, members controlling 10% of the votes in the non-profit could ask for a special members’ meeting. Under the ONCA, your bylaws can lower the percentage of votes needed to require the Board to call a special members’ meeting.
CLEO has a number of resources to help update your bylaws:
- a highly customizable interactive bylaw builder that creates ONCA compliant bylaws from scratch
- a paper default set of bylaws with options to help you manually create ONCA-compliant bylaws
- a guide for how to adjust existing bylaws to make them comply with ONCA
These resources don’t replace legal advice because they don’t address the specific legal context of every type of non-profit, such as housing providers.
Registered charities must file updated bylaws with the Canada Revenue Agency. The Public Guardian and Trustee has said they will not get involved in the transition process unless a charity changes its purposes.
Step 3: Update and file articles of amendment
You may be required or want to change your articles of incorporation. Below is a list of examples of what you might want or need to change:
- Purposes: If this is the first time you’re looking at your articles in a while, you may find your official purposes no longer reflect the full scope of your activities. So, you may want to update your purposes. If you’re a registered charity, make sure that your purposes remain charitable. You may want to talk to a lawyer.
- Number of directors: Under the OCA, you could only have a fixed number of directors. Under the ONCA, you must list the number of directors in your articles and you can provide a range, for example, 8 to 10.
- Classes of members: Under the ONCA, if you have different classes of members, their names and voting rights must be set out in the articles.
To file changes to your articles, called “articles of amendment”, you must either file by mail, online through a third party provider, or online through the Ontario Business Registry.
If you file online, you’ll need all of the following:
- CompanyKey: To get your CompanyKey, follow the steps on the Ontario Business Registry website. You also need to make sure that the government has your non-profit’s correct address on file.
- ONe-Key: This is an account you create by signing up online.
- ServiceOntario account: This is an account you create by signing up online.
If you file by mail, you’ll need a CompanyKey. If you file through a third party provider, you do not need any of the above.
Step 4: Follow the new rules
There are some practical differences to keep in mind under the ONCA. One key difference is record keeping, which can be quite complex depending on the type of information you keep. And your records can interact with privacy, tax, and other laws, so the rules explained below may not be the only rules you need to follow.
Below is a list of records ONCA says non-profits must keep. You must keep them at your head office or a location in Ontario specified by a Board resolution. They may be digital and can be stored in the Cloud, but they must be in a readable format.
Non-profits must keep the following:
- adequate financial records
- register of land owned in Ontario
- financial statements
- statements by replacement auditors regarding the reason for replacement
- notices to creditors about any amalgamation
- members’, creditors’, and other debtholders’ consent to dissolve the non-profit
- governing documents
- minutes of members’, board, and committee meetings
- resolutions of members or directors
- list of directors, officers, and members and their contact info
- directors’ consent to serve
- resignation letters, including any reasons given by people such as directors and auditors
- directors’ reasons for opposing being removed
- disclosures of any conflict of interest by directors or officers
- dissents of directors given to the secretary to any resolution passed
- dissents of member to any resolution passed, including a resulting request for a refund of membership fees or waiver of the right to that refund
- authorization by a member that is a corporation appointing someone to represent them at meetings
- a notice from the Board explaining to a member why their proposal won’t be included in the agenda of a members’ meeting (only certain reasons are allowed under the ONCA)
- revocations by a member of someone’s proxyholder status
- permission of members for their information to be used in a way not specifically listed in the ONCA
- waivers or consents from persons entitled to receive notice who did not receive notice on time or at all
Join ONPHA for a new webinar! The Road to ONCA: What’s new and what’s next
Thursday, February 3, 2022 | 1:00 p.m. to 2:30 p.m.
Benjamin Miller will walk us through what’s new with the ONCA, steps non-profits need to take to transition, and provide FREE RESOURCES from CLEO to help you create compliant bylaws from scratch or adapt your current ones.