Many Ontario non-share corporations have been waiting on the
Not-for-Profit Corporations Act ("ONCA") to come
into force before updating their corporate documents. Should
these corporations continue to wait or should they update their
corporate documents now?
The ONCA was passed by the Ontario Legislature in 2010 and will
come into force on a day to be named by proclamation. In
April 2012, we wrote that non-share capital corporations
incorporated in Ontario under the Corporations Act
(Ontario), or under their own special legislation, will soon be
governed by the ONCA. But this did not occur. Instead, the
government has changed its projected "in force" date
incrementally over the last few years to January 2013, July 2013,
January 2014, and then six months after certain amending
legislation (Bill 85) was to be passed. Currently, the ONCA is not
expected to be in force until 2016.
As the ONCA has been imminent for several years, we have advised
some clients to wait until the ONCA is in place and its regulations
have been released before changing their governing documents. This
approach means that a corporation may avoid the need to make
further revisions to its documents once the ONCA is in force.
However, for some organizations it may be appropriate to consider
changes now, given that the "in force" date is at least a
year away and remains a moving target.
The ONCA will require some corporations to change their
corporate structure. For example, corporations with delegate
voting systems or multiple membership classes may need to change
their structure. These corporations may benefit from updating
their corporate documents before the ONCA comes into force.
Corporations that need to amend their governing documents for
reasons other than to comply with the ONCA should also consider
acting now. While these corporations will need to make further
revisions when the ONCA comes into force, the legislation provides
that corporations will have three years before compliance is
mandatory. Thus, a corporation that updates its by-law now could
wait at least 4 years before its by-law must comply with the
Corporations that do not need to update their corporate
documents, but are considering making changes to comply with the
ONCA, may want to hold off on making changes until the technical
amendments to the ONCA are passed and the regulations to the ONCA
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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