Yesterday my colleague Victoria Prince tweeted "Further
delays in ONCA implementation? Govt. site now states 6 month delay
after passing of the amending legislation." I decided to
ask her to provide an update on ONCA.
Question: When is ONCA expected to come into
With the recent advisory from the government, ONCA could come
into force as early as Spring 2014. However, more
realistically, it may not come into force until Summer 2014 or even
later, especially since it is expected that amendments to ONCA that
were introduced in June 2013 will likely be debated in Fall 2013.
If the Legislature passes the amendments, a 6-month
transition period is expected after the passage.
Question: Isn't there a 3-year
Victoria: ONCA will immediately apply, but there is a partial
3-year transition period that applies to existing not-for-profit
corporations. Assuming compliance with the existing
legislation, the incorporating documents of those corporations will
continue to be valid until the earlier of the end of the 3-year
transition period (which period begins when ONCA comes into force)
and the amendment of the incorporating documents to conform with
ONCA. There are some subtleties to how the
transitioning works and organizations currently governed by the
Corporations Act (Ontario) should consider how ONCA will impact on
Question: ONCA was passed in October 2010.
Why were changes proposed to ONCA in June
Victoria: The Bill introduced in June makes transitional changes
to dozens of other Ontario statutes that referred to the
Corporations Act and must be modified to refer to ONCA. In
addition, part of the intent of the Bill is to clarify the
provision in ONCA that grants rights to non-voting members in
certain circumstances. The Bill provides that the relevant
provisions will not come into force for the 3-year transition
period. Note, however, that the rights of voting members to
vote as a class in special circumstances are not part of the
amending provisions. There is thus still some uncertainty
around those provisions.
Question:What happens if a
not-for-profit corporation fails to amend itsincorporating documents within the 3-year transition
Victoria: To the extent that
the incorporating documents do not conform with ONCA, those
portions will be deemed to have been amended in order to conform
with ONCA.This could result in
some confusion so organizations are encouraged to be pro-active
about reviewing their own governing documents.
Question: How can
not-for-profits start getting ready for ONCA?
Victoria: If they haven't already started,
not-for-profits should review their incorporating documents in
light of ONCA.
Have you started to review your incorporating documents
against ONCA? Don't forget to also review the
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.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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