ONCA

Ontario Not-for-Profit Corporations Act, 2010

• Makes the incorporation process for new not-for-profit corporations more efficient
• Makes a new distinction between public benefit corporations and other not-for-profit corporations
• Allows a not-for-profit corporation to provide in its by-laws other means of voting (by mail, telephone or electronic means) in addition to, or in place of, voting by proxies
• Allows a member of a corporation to appoint a proxy holder, but only if the articles or the by-laws of the corporation permit it
• Clarifies that not-for-profit corporations can engage in commercial activities if the activities support the corporation’s not-for-profit purposes
  • a not-for-profit corporation may be subject to restrictions on its activities imposed by other legislation such as the Income Tax Act
• Allows for a simpler process for reviewing the corporation’s financial records
  • called a “review engagement,” the process can take the place of an audit in some circumstances and, in some situations, neither an audit nor review engagement will be required
• Requires a corporation that has two or more classes or groups of members to set this out in the articles (instead of in the by-laws)
  • the by-law must set out the conditions of membership
• Provides clearer rules for governing the corporation and increasing accountability
  • ONCA provides a statutory duty of care for directors, which requires them to act honestly and in good faith with a view to the best interests of the corporation, and to exercise reasonable care, diligence and skill
• Sets out a due diligence and good faith reliance defence for directors
  • a director will not be legally liable in certain circumstances if they acted with the care, diligence and skill a reasonably careful person would have acted in similar circumstances
• Lists specific requirements for directors and officers to report a conflict of interest in certain circumstances
• States that corporations do not always have to include a member’s proposal in meeting notices in certain circumstances
• Provides members with actions they can take if they believe directors are not acting in the best interests of the corporation
• Provides members with greater access to financial records
• Streamlines incorporation as a charitable corporation, which no longer requires Office of the Public Guardian and Trustee (OPGT) approval
  • all applications for articles of incorporation will be submitted directly to ServiceOntario
• Joins other jurisdictions in Canada that have modernized their not-for-profit corporations’ laws

Source: ontario.ca