Background Information on the Ontario Not-for-Profit Corporations Act (2010) (ONCA) released

July 16, 2012 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News, Canadian Charity Law, New corporate non-profit acts

The Ontario government has released Background Information on the Ontario Not-for-Profit Corporations Act (2010).  In the background they note that the “ONCA is targeted to come into force on January 1st, 2013”.

Here is the information from the Ontario government:


“Background Information on the Not-for-Profit Corporations Act, 2010

In 2010, the government enacted legislation to provide a modern framework to govern not-for-profit corporations in Ontario.  The Not-for-Profit Corporations Act, 2010 received Royal Assent on October 25, 2010 and is targeted to come into force on January 1st, 2013.  When the Act comes into force, it will:

• Streamline the incorporation process
• Set out clear corporate governance and accountability rules (e.g., it will provide a statutory standard of care for directors and officers, which will require them to act honestly and in good faith with a view to the best interests of the corporation, and exercise the care, diligence and skill of a reasonably prudent person in comparable circumstances)
• Provide members with actions they can take if they believe directors are not acting in the best interests of the corporation
• Provide members with greater access to financial records
• Clarify that not-for-profit corporations can engage in commercial activities if the activities are in support of the corporation’s not-for-profit purposes
• Allow for a simpler financial review process called a review engagement in place of an audit in specified circumstances.  In some situations, neither an audit or review engagement will be required.

The Ministry of Consumer Services (MCS) will share responsibility for the administration of the Act with the Ministry of Government Services (MGS).  In order to implement the new Act, the supporting MCS and MGS Ministers’ regulations and computer upgrades overseen by MGS to accommodate the new incorporation system must be in place.

Who is Affected?

ONCA is targeted to come into force on January 1st, 2013.  Once in force, ONCA will automatically apply to every corporation without share capital incorporated under an Act of the Ontario Legislature, including the current Corporations Act (CA). 

Exceptions include:

• Companies with social purposes, referred to as “companies that have objects in whole or in part of a social nature”, such as share capital social clubs (e.g., golf, tennis or country clubs), will continue to be governed by the CA for five years.
• Insurance corporations under Part V of the CA will continue to be governed by that Act. 
• Corporations without share capital to which the Co-operative Corporations Act applies
• If a statute expressly provides otherwise

Some Ontario not-for-profit corporations are incorporated by special or private Acts or by other public Acts.  Depending on the circumstances, ONCA may apply or the specific governing statute may take priority.  These corporations are encouraged to consult a lawyer to find out which legislation applies. 

Existing corporations will not be required to file articles of continuance for ONCA to apply. “


Here is the link to the Word document: http://www.ontariocanada.com/registry/showAttachment.do?postingId=9922&attachmentId=15031

Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

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