The Ontario Not-for-Profit Corporations Act: Preparing your organization for change
Keeping your organizational bylaws up-to-date is a crucial part of good governance. Most Ontario non-profit housing providers are currently governed by the requirements of The Corporations Act, 1990 (OCA), which was amended in 2017. The Ontario Not-for-Profit Corporations Act (ONCA), passed in 2010, is scheduled to come into effect later this year, to be followed by a three-year transition period in which organizations can make the necessary changes to their bylaws. Read on to learn about some of the changes you can expect to see when ONCA comes into force.
When organizational bylaws take effect
Under the OCA, a bylaw must be approved by a simple majority vote at a board of directors meeting that has a quorum of members but the bylaw will only take effect once it’s confirmed by the members at the next annual meeting or a general members’ meeting called for the purpose of confirming the bylaw.
Under ONCA, a “bylaw, amendment or repeal is effective from the date of the resolution of the directors. If the bylaw amendment or repeal is confirmed or confirmed as amended by the members, it remains effective in the form in which it was confirmed.” 2010, c. 15, s. 17 (3). The bylaws must then be passed at a member’s meeting in order to come into effect.
ONCA and the OCA have different requirements for when a two-thirds vote of the members is needed to confirm a bylaw. In many cases, a simple majority is enough and it could be interpreted that requiring a two-thirds majority is wrong, even if required by the bylaws.
Some bylaws require a special resolution and must be passed by a two-thirds majority vote. These are often bylaws that:
- add, change or remove a provision about the transfer of memberships;
- change who gets the Corporation’s property on dissolution; or
- change the method of voting by members who are not present at a meeting of the members.
Under ONCA, in the simple scenario only a simple majority will be required. Where special requirements are concerned, a two-thirds majority is required to confirm.
Number of directors
Both the OCA and ONCA require a minimum of three directors. The OCA requires a special resolution [a motion passed by the board and confirmed by a member vote] to change the number of directors. The procedure to change your board’s minimum will be different and more involved under ONCA, which will require boards to file Articles of Amendment with the government following a special resolution.
To simplify proceedings, boards can amend their articles once to state a minimum and maximum number of directors. Following this, the minimum number can be changed by special resolution or the board can be authorized to change the number as it sees fit.
The roles and titles of officers can be customized to fit your organization under both acts except:
- the OCA requires a president and secretary
- ONCA requires a chair of the board only
Quorum of directors
Currently under the OCA, two-fifths of the board is legally required to meet quorum.
When ONCA comes into force, a majority will be the standard for quorum unless your bylaws state otherwise, which may be preferable if you have a large membership.
Electronic or virtual meetings
Both the OCA and ONCA allow for participation by telephone or other electronic means (Zoom, Skype, etc.), provided that the technology allows participants to communicate adequately, in-real time, during the meeting. Anyone who joins a meeting is this manner will be considered present.
How ONPHA can help prepare your organization
As previously mentioned, ONCA has been passed but is not expected to come into effect until later this year (2021). Organizations will have three years from that time to adapt their bylaws to meet ONCA requirements.
ONPHA’s Model bylaws and Guide bundle of resources includes a set of comprehensive and customizable documents to help board members amend bylaws based on the requirements of the Ontario Not-for-Profit Corporations Act (OCA) and the Housing Services Act (HSA). This set of resources includes information on what sections of the bylaws will change once ONCA comes into effect and will help ease housing providers into the new requirements. ONPHA is carefully tracking ONCA’s status and will respond quickly to help members adapt, including releasing a new version of the Model bylaws and guide that meets ONCA requirements.
Do you have questions about governance? Check out our newly-released Governance essentials resources. Tailored specifically to non-profit and housing legislation in Ontario, these resources will guide you through governance best practices so that your current and future boards are set up for success. Have a specific inquiry? Contact us at email@example.com. We’re always happy to hear from you, and to help!
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