What Are the rights and responsibilities of members in a Not-For-Profit Corporation under ONCA?

Understanding the rights and responsibilities of members in a not-for-profit corporation under the Ontario Not-for-Profit Corporations Act (ONCA) is essential for anyone involved in these organisations.

Members can participate in meetings, vote on key issues, access important documents, and hold directors accountable. They must also support the organisation’s integrity and pay any dues set by the board.

These rights let members influence the corporation’s direction and keep things transparent. Members must respect boundaries, such as not attending director meetings, and support good governance.

Knowing these points helps us engage effectively and protect the organisation’s mission and trust.

When we understand ONCA’s rules, we can take part in decision-making and set clear standards for ourselves and the board.

This knowledge empowers us to contribute meaningfully and safeguard the corporation’s future.

Understanding Not-For-Profit Corporations and ONCA

Not-for-profit corporations serve public or community benefits, not private profit. Ontario's Not-for-Profit Corporations Act (ONCA) sets rules for how these organisations are formed, governed, and held accountable.

ONCA affects members' rights and responsibilities and sets governance standards across the sector.

Definition of Not-For-Profit Corporations

A not-for-profit corporation is set up to pursue goals other than profit. These organisations focus on social, charitable, educational, or community activities.

They reinvest surplus funds into their mission instead of giving earnings to members or directors.

In Ontario, not-for-profit corporations do not have share capital and do not issue shares. Members may have voting rights but are not owners who receive dividends.

This structure supports the public interest and promotes transparency in managing resources.

Scope and Applicability of ONCA

ONCA applies to Ontario-based not-for-profit corporations incorporated under provincial law. It replaced the Ontario Corporations Act (OCA) for these entities on October 19, 2021.

The act covers incorporation, membership rules, directors’ powers, and financial reporting.

New corporations must follow ONCA, and existing corporations had to update their bylaws and governance to meet ONCA standards by specific deadlines.

ONCA’s rules promote accountability and modern governance by giving members clear rights to information and participation, while protecting directors and members from undue liability.

Comparison with Other Legislation

ONCA is different from the Canada Not-for-Profit Corporations Act (CNCA), which covers federally incorporated not-for-profits. ONCA focuses on Ontario corporations and offers regulations suited to the province.

Compared to the former Ontario Corporations Act, ONCA gives members stronger protections and clearer governance standards.

ONCA and CNCA both prohibit profit distribution to members, focusing on mission-driven governance. This helps maintain public trust in the not-for-profit sector.

Core Rights of Members under ONCA

Members have rights that shape how the organisation is run. These include voting on important matters, attending meetings, suggesting changes, and calling special meetings when needed.

Understanding these rights helps us influence our corporation’s direction.

Voting Entitlements and Resolutions

We can vote on key decisions affecting the corporation, such as by-law changes, electing directors, and approving major resolutions. ONCA requires at least one class of voting members in every corporation.

Votes happen at annual or special meetings, or sometimes by written resolution if allowed by the bylaws.

Voting rights and methods depend on the class of membership. Participating in votes is a main way we influence the organisation.

Meeting Attendance and Participation

We can attend general meetings and take part in discussions. Meetings let us hear reports, ask questions, and share our views.

Members cannot attend board meetings unless invited. This keeps director discussions private.

At meetings, we can speak and vote on motions. Staying informed about meeting schedules and materials helps us engage fully.

Proposing Amendments or Initiatives

We can propose amendments or new initiatives by submitting them to the board or membership. This ensures our ideas are heard.

ONCA provides a process for submitting proposals, which includes giving formal notice before meetings.

Proposals may involve by-law changes, membership rules, or strategic directions. By taking part, we help guide the corporation’s future.

Requesting Special Meetings

We can request a special meeting by submitting a formal written request to the board, supported by the required number of members.

Special meetings address urgent or important issues outside regular meetings.

ONCA sets rules for requesting and holding special meetings, including timing and notice. Using this right helps us keep governance strong.

Access to Information and Transparency

We have the right to access key documents that show how our corporation is run. This helps us hold the organization accountable.

Important records include corporate documents, financial reports, and lists of members or directors.

Right to Inspect Corporate Documents

We can inspect the corporation’s articles, by-laws, minutes, and resolutions during office hours. These documents show the rules and decisions of the corporation.

This right keeps us informed and ensures fair decision-making. We do not have access to directors’ meetings unless invited, and we must respect confidentiality.

We usually need to request documents in advance, following the corporation’s procedures. This keeps records managed properly while allowing member access.

Access to Financial Statements

We can view and get copies of the corporation’s annual financial statements. These reports show income, expenses, assets, and liabilities.

Access to financial statements is vital for transparency. It lets us see how funds are used and builds trust.

ONCA requires that these statements be available during regular office hours and provided promptly when requested. This helps us make informed decisions in meetings about finances.

Obtaining Member and Director Lists

We can request lists of current members and directors, but only for purposes related to the corporation’s affairs. We can use this information to influence voting, call meetings, or address concerns.

The corporation may set limits on how we use this information to protect privacy. We must use the lists only for proper activities.

This right helps us connect with other members and ensures leadership represents the membership. It also supports transparency by showing who is involved in running the corporation.

Key Responsibilities of Members

Members have duties that keep the organisation lawful and effective. We must follow the corporation’s rules, pay dues if required, and stay involved in governance.

These responsibilities protect both the organisation and its members.

Compliance with By-Laws and Articles

We must follow the corporation’s by-laws and articles, which set out how the organisation operates. Following them ensures fairness and legal compliance.

This means respecting processes like membership admission, voting, and meeting protocols. If we break these rules, we may face sanctions or lose membership.

Sticking to by-laws also prevents conflicts and misunderstandings. We need to stay informed about any changes to these documents.

Payment of Dues and Liabilities

We may need to pay annual dues or fees if the board requires it. Our financial contributions help the corporation operate.

Members are usually protected from personal liability for the corporation’s debts, but we must pay required dues to keep our membership.

These payments are not optional if the rules require them. Staying current with dues lets us keep our rights, such as voting and participating in meetings.

Participation in Corporate Governance

We have a responsibility to take part in governance. This includes attending meetings, voting, proposing ideas, and calling special meetings if needed.

Our participation shapes how the corporation is run and holds directors accountable.

By engaging, we help protect the organisation’s integrity and mission. We can also act if directors are not fulfilling their duties.

Members’ Influence on Fundamental Changes

Members play a direct role in big decisions that affect the not-for-profit corporation. These include approving changes to governing documents, taking part in reorganizations, and holding directors accountable.

Our rights let us shape the corporation’s future and protect its mission.

Approving Amendments to Articles or By-Laws

Members must approve key amendments to articles or by-laws. These changes can affect the corporation’s purpose, structure, or rules.

Approval needs a special resolution with at least two-thirds of voting members agreeing. This ensures major changes have broad support.

This process protects the corporation’s core principles and gives us a say in rule changes. We need access to meeting notices and documents to make informed choices.

Role in Major Restructuring or Winding Up

If the corporation faces major restructuring or winding up, members must approve the plan. These decisions can reshape or end the organisation.

We can vote on these issues and suggest alternatives. The board must provide full information before any steps are taken.

Initiating Removal of Directors

We can start the process to remove directors if needed. This begins by gathering support from other members and submitting a formal petition.

The right to remove a director keeps leadership accountable. ONCA outlines this process to make sure it stays fair and orderly.

Our roles and rights protect the corporation’s governance and identity. We take part in decisions that affect its direction and stability.

Enforcing Rights and Upholding Accountability

We must ensure our rights as members are respected and that the corporation acts honestly. There are ways to address problems and hold directors accountable when needed.

These steps help maintain trust and transparency in our organization.

Filing Complaints and Seeking Compliance

We can file complaints if the corporation does not follow ONCA or its own rules. This starts with a formal request for compliance, asking the board to fix the problem.

If the board ignores the complaint, we can gather support and propose a resolution at a meeting.

Complaints often focus on misuse of funds, failure to share financial statements, or breaking by-laws. Our goal is to keep directors responsible and the corporation accountable.

Court Applications and Investigations

When internal processes do not resolve issues, members can apply to the court under ONCA. This legal step allows members to request investigations into the corporation’s management or remove directors who do not fulfill their duties.

Court involvement is serious. Members can ask a judge to order compliance or even wind up the corporation.

We must prepare clear evidence to support the application. These tools protect our interests and help uphold the corporation’s integrity when other methods fail.

Conclusion

Contact B.I.G. Charity Law Group for guidance on your rights and responsibilities as a member of a not-for-profit corporation under ONCA. Our team can help answer your questions and ensure your organisation follows the right procedures.

Working with us gives you access to expert advice on member participation, transparency, and corporate integrity. Reach us by email at dov.goldberg@charitylawgroup.ca or phone at 416-488-5888.

You can also visit CharityLawGroup.ca for more information. Schedule a free consultation anytime through our calendar link.

Our experts are here to guide you every step of the way. Your peace of mind is our priority. Let us simplify your ONCA journey!

Frequently Asked Questions

Members in a not-for-profit corporation under ONCA have important rights and duties. They hold powers such as participating in meetings and accessing records, along with responsibilities to support corporate integrity.

Who are members of a not for profit?

Members are individuals or entities admitted to the corporation according to its bylaws or articles. The corporation formally recognizes their membership status.

What does it mean to be a member of a corporation?

Members have certain legal rights and duties within the corporation. They can influence decisions through voting and proposals, but cannot attend board meetings.

What rights do members of a not-for-profit corporation have under ONCA?

Members can attend and vote at meetings, propose ideas, request meetings, and use different voting methods. They also have rights to receive corporate documents and financial reports.

Can members call a meeting under ONCA?

Yes, members can ask the board to convene a meeting. This usually requires a formal request or petition as set by the corporation’s rules and ONCA provisions.

Do members have the right to inspect nonprofit financial records?

Members can access key documents like financial statements, minutes, and member lists during office hours. This promotes transparency and accountability.

What responsibilities do members have in a nonprofit corporation?

Members should participate actively and uphold the corporation’s integrity.

They may need to pay dues if the board sets them.

Members can act if they believe the corporation is not following its rules.