Ontario Not-For-Profit Corporations Act (ONCA) Receives Royal Assent

October 25, 2010 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News, Canadian Charity Law, New corporate non-profit acts

The Ontario Not-For-Profit Corporations Act received Royal Assent on October 25, 2010.  Here is a copy of the Explanatory Notes and the Ontario Not-For-Profit Corporations Act.

Ministry News
Here is a press release from October 19, 2010:


Strengthening Ontario’s Not-For-Profit Sector
McGuinty Government Passes Not-For-Profit Corporations Act
NEWS
Ontario is making it easier for not-for-profit corporations to operate and do business in today’s marketplace while strengthening the economy and creating jobs.

The province’s Not-for-Profit Corporations Act passed third reading today in the Ontario Legislature. Upon Royal Assent the new legislation will provide Ontario’s 46,000 not-for-profit corporations with a modern, legal framework to:

enhance corporate governance and accountability
simplify the incorporation process
give more rights to members
better protect directors and officers from personal liability
allow not-for-profits to engage in commercial activities where revenues are used by the corporation in support of their not-for-profit purposes
The Act is based on extensive consultations across the province. This includes three consultation papers, a web advisory panel and regional workshops in Ottawa, London, Toronto and Thunder Bay attended by more than 200 organizations. 
The nonprofit sector employs more than 16 per cent of Ontario’s paid workforce. Supporting Ontario’s non-profit organizations is an important part of the government’s Open Ontario plan to grow key sectors of the economy and create a climate where business can thrive.

QUOTE
“Almost eight million Ontarians volunteer their time and effort to help not-for-profits relieve poverty, advance education, strengthen medical research, share faiths and build communities.  The Not-for-Profit Corporations Act will strengthen a sector that offers so much to so many.”
– John Gerretsen, Minister of Consumer Services

QUICK FACTS
The previous Corporations Act, which governed not-for-profit organizations was enacted in 1907 and last substantially updated in 1953.
Ontario’s volunteers contribute over 800 million hours a year.

For more information:

Christine Lall, Minister’s Office, 416-325-0238
Stephen Puddister, Communications, 416-326-7279

ontario.ca/consumerservices-news


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Backgrounder
Ontario’s Proposed Not-For-Profit Corporations Act
The proposed Not-for-Profit Corporations Act would provide a modern legal framework that addresses the needs of today’s not-for-profit corporations in Ontario.


Main highlights of Ontario’s proposed Not-for-Profit Corporations Act:
Simplifying the incorporation process. The current incorporation process is complex and lengthy, normally taking six to eight weeks to incorporate. Under the proposed new Act, incorporation could take only a few days.
Enhancing corporate governance and accountability by providing a statutory duty of care for directors; and, at the same time, providing specific protection from liability for directors.
Allowing not-for-profit corporations to engage in commercial activities where the revenues are used for the corporation’s not-for-profit purposes.
Providing for a less expensive review engagement or audit exemption in appropriate circumstances.
Harmonizing with other Canadian jurisdictions that have modern legislation, such as the Canada Not-for-Profit Corporations Act which received Royal Assent on June 23, 2009.
Enhancing member democracy by expanding member remedies to ensure directors are acting in the corporation’s best interests.
Increasing transparency for financial information and access to records.
Consultation
The Ministry of Consumer Services undertook extensive stakeholder consultations throughout the development of the proposed Act. Three consultation papers were developed to solicit opinions and regional workshops were held in Ottawa, London, Toronto and Thunder Bay attended by stakeholders from approximately 200 organizations. The Ministry also formed a web advisory panel to engage in online consultation with key stakeholders on preliminary policy recommendations. 

Government’s Commitment
The proposed Not-for-Profit Corporations Act meets the government’s commitment to business law modernization. It also supports:

Open for Business by streamlining operational and administrative requirements and improving the processing efficiency of applications.
Ontario’s Poverty Reduction Strategy by facilitating the operations of not-for-profit corporations focused on improving housing, education, food and employment assistance.
The Partnership Project: a consultative process to strengthen the relationship between the government and the not-for-profit sector, led by the Ministry of Citizenship and Immigration and the Ontario Trillium Foundation.
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Here is a copy of the act on the Ontario government website:
http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=2347&detailPage=bills_detail_the_bill&Intranet=

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.

mark@blumbergs.ca
416.361.1982
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