On June 5, 2013 the Ontario government introduced in the
legislature Bill 85, the Companies Statute Law Amendment Act, 2013.
Bill 85 seeks to amend various corporate statutes, including the
still-unproclaimed Not-for-profit Corporations Act, 2010 (the
The proposed amendments are largely technical in nature: changes
to defined terms; updating the mechanics of incorporation,
restructurings and filings; and updates in various legislation of
references to the existing Corporations Act.
We highlight two substantive changes of significance for Ontario
non-share capital corporations: CLARIFICATION OF TRANSITION
Bill 85, if passed, clarifies that to the extent any valid
provision in an existing non-share capital corporation's
letters patent, supplementary letters patent, by-laws or special
resolutions ("governance documents") do not conform with
the provisions of ONCA, those provisions continue to be valid and
in effect until: (i) the day the corporation amends its governance
documents to bring them into conformity with ONCA; or (ii) the
third anniversary of the date the transition section of ONCA is
proclaimed into force.
To summarize, the transition provisions clarified by Bill 85 are
ONCA applies immediately to all non-share capital corporations
incorporated by letters patent under the Corporations Act.
If there is a provision in your existing governance documents
that is in clear conflict with ONCA, the provision in your
governance documents will prevail for up to three years provided
that provision is currently in compliance with the Corporations
If ONCA prescribes a requirement that is not in clear conflict
with your governance documents, the new requirement will apply
immediately (for example, unless your organization's governance
documents expressly address the scope and process in which member
proposals may be put to meetings, member proposals as permitted by
ONCA will immediately apply).
Any amendment to the governance documents once ONCA is
proclaimed into force must include all changes required for the
corporation to be in conformity with ONCA.
If within three years after the ONCA is proclaimed in force an
organization does not voluntarily amend its governance documents to
conform with ONCA, it will be deemed to have done so to the extent
necessary to bring the governance documents into conformity with
ONCA requires certain provisions (for instance, multiple
classes of membership with different or no voting rights) to be set
out in the articles to be valid. If such a provision exists and is
set out in the by-laws, it must be restated in the articles to
conform with ONCA by the third anniversary, following which it
VOTING RIGHTS OF NON-VOTING MEMBERS ON FUNDAMENTAL
One significant change under ONCA is the creation of a statutory
right of non-voting members to vote, sometimes separately as a
class, on certain fundamental corporate changes, including
decisions to amalgamate, to continue out of ONCA, to approve the
sale or lease of all or substantially all of the property of the
corporation, and to make amendments to governance documents that
would adversely impact the rights of non-voting members.
Bill 85 clarifies that the voting rights of non-voting members
will be proclaimed into force no earlier than the third anniversary
of the date ONCA is proclaimed into force. Accordingly, non-share
capital corporations with non-voting members now have a period of
time to deal with this issue before these statutory rights become
available to non-voting members.
The text of the government's announcement and Bill 85 can be
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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