The effective date of the Ontario Not-for-Profit Corporations
Act ("ONCA") has yet again been postponed, this time
indefinitely. While no detailed explanation was given for the
delay, it is clear that the new electronic registration and
corporate management system that the Province has been developing
for the ONCA, as well as for all of its other corporate and
business registration statutes, has been delayed and there is no
firm date for its completion.
On September 17th the Ontario Ministry of Government &
Consumer Services announced on its website that the Ministry will
give at least 24 months' notice before proclamation, but
identified no projected date of proclamation. This means that the
ONCA will not come into effect before 2018 at the earliest.
When the ONCA finally comes into force, it will govern the
formation and operation of non-share capital corporations under
Ontario law. The ONCA will automatically apply to most non-share
capital corporations governed by the current Ontario Corporations
Act ("OCA"), as well as to entities formed under certain
special Ontario acts.
When it was passed in 2010, the ONCA was welcomed by the
non-profit and charity sectors as a much needed overhaul of the
statutory framework governing not-for-profit corporations in
Ontario. Improvements under the ONCA would include enhanced
corporate governance features, greater corporate accountability,
increased member rights, and more protection from personal
liability for directors and officers. Many of these changes will
require a rethinking of the current governance models of existing
OCA and special act corporations.
Once the ONCA is in force, corporations will have three years to
amend their charter documents and by-laws to bring them into
compliance. If a corporation fails to meet this deadline, its
documents will be deemed to have been amended to the extent
necessary to comply with the ONCA. For some corporations, it will
be more appropriate to make these amendments prior to the
implementation of the ONCA. However, until a definite date for
proclamation is given and certain necessary substantive and
technical amendments are made to the ONCA, we do not recommend that
changes be made in anticipation of the ONCA. If your organization
has a current reason to review its governance, you should consider
making any desirable changes now. If you would like to take
advantage of some of the major changes which the ONCA will bring to
OCA corporations without having to wait for its implementation, you
may wish to consider continuing under the Canada Not-for-Profit
Corporations Act, which has many of the same features.
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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