The deadline for nonprofit corporations to bring their articles and bylaws into compliance with the Ontario Not-for-Profit Corporations Act (“ONCA”) has officially passed

First proclaimed on October 19^th, 2021, ONCA officially came into force on October 18^th of this year. The generous three-year timeframe caused many nonprofits to delay conducting compliance reviews, only to be left scrambling at the eleventh hour. Now that the deadline has passed, those who failed to meet it are left wondering what to do next.  

What is ONCA?

ONCA replaces the Corporations Act as the rulebook for the creation and governance of nonprofit corporations, including charities. It deals with everything from how directors are elected, to the conduct of meetings, to the distribution of assets upon dissolution and winding up.

What’s new?

ONCA contains many new provisions that require organizations to update their articles and bylaws. This often requires organizations—or provides them with the opportunity—to modify the way they do things. Amongst other things, changes include new notice requirements for meetings, added financial disclosure requirements, new restrictions on board composition, and modernized rules for conducting electronic meetings.

What does the deadline mean?

Non-profits had until October 18^th to bring their constating documents into line with ONCA. Fortunately, those who failed to meet the deadline will likely not face significant penalties. They will, however, be deemed to have adopted the standard organizational bylaw provided by the government. The danger here is that the government’s bylaw may be lacking in key areas or be inconsistent with current practices. It is very important to ensure the bylaw and articles accurately reflect the structure and goals of the organization, which is rarely achieved without some level of customization.

What to do?

We strongly recommend that any nonprofits who missed the deadline conduct a compliance review of their constating documents to ensure they are in line with the new legislation. More than strict compliance, this is opportunity to take advantage of the additional flexibility provided by ONCA. Many organizations are surprised to learn that some of the more onerous provisions of the previous legislation have been discarded in favour of more flexible ones.