Recently, several of our clients, under the impression the
Ontario Not-for-Profit Corporations Act, 2010, Bill 65,
("the Act") is now in force, have asked when they must
comply with the new Act. This misunderstanding is likely caused in
part by the amount of time which has passed since the Act received
royal assent, on October 25, 2010, almost 2 years ago.
In fact, the Ontario Not-for-Profit Corporations Act,
2010 is not yet in force.
On September 26, 2012, the province updated its targeted date
for implementing the new Act to July 1, 2013. We had previously
reported that the province intended to have its default by-law
drafted and published, and provide a plain language guide and other
tools by the fall of this year. The province hoped that January 1,
2013 would be the date the Act comes into force. While the province
still hopes to have the default by-law and the guide for the
transition in place this fall, they now intend for the Act to come
into force on July 1, 2013.
This means that there is still plenty of time for organizations
to amend their by-laws and seek supplementary letters patent under
the existing regime. There are some advantages to doing that for
some organizations. For example, some not-for-profits may wish to
clearly do away with non-voting members to ensure that they do not
receive unintended rights when the new Act comes into force.
There continues to be some confusion about when conformity with
the Act is required. Unlike the new Canadian Not-for Profit
Corporations Act, the new Ontario Not-for-Profit
Corporations Act does not require an existing Ontario
Corporations Act corporation to take the steps to actively
transition to the new Act. An existing corporation will not be
automatically dissolved. Instead, its letters patents,
supplementary letters patent, bylaws and any special resolutions
will be deemed to have been amended to conform
with the Act if it does not actively do that within 3 years of the
Act coming into force. The Act's provisions will always
supersede existing letters patents, supplementary letters patent,
or by-laws of the corporation.
That does not mean not-for-profit corporations should do
nothing. Failure to update your organization's constating
documents can cause great confusion and significant problems even
if it is not fatal. There are likely to be inconsistencies between
the existing documentation and the Act's requirements. If the
directors, members and employees of that corporation continue to
look to their existing by-laws and letters patent for guidance,
they may assume that no changes to existing practices are required.
The corporation, its directors and members may act in ways that
contravene the Act, but appear to comply with the old documents.
Furthermore, the Act's new or additional requirements may go
unnoticed and unfulfilled without an update of the
corporation's by-laws and articles.
Assuming that the Act does go into force on July 1, 2013, an
existing Ontario not-forprofit corporation should restate its
articles and adopt new by-laws no later than June 30, 2016.
Concise explanatory notes on the new Ontario Not-for-Profit
Corporations Act, 2010 can be found here:
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