Charity Governance

What is ONCA?

The ONCA (Ontario Not-for-Profit Corporations Act) is new legislation which governs all Not-for-Profits incorporated in Ontario. The ONCA came into effect October 19, 2021 and makes significant changes to the previous legislation which governed Ontario Not-for-Profits.

5 ways the ONCA modernizes Not-for-Profit governance are:

1. enhances members’ rights;
2. instead of an full financial statement audit, some Ontario Not-for-Profits can suffice with a review engagement;
3. clear rules for governance;
4. clarify rules around Not-for-Profits earning a profit through commercial activities; and
5. simplifies the Not-for-Profit incorporation process.

Does ONCA apply to my Ontario Not-for-Profit & Charity?

The ONCA only applies if your Not-for-Profit or Charity is incorporated in Ontario.

If your Not-for-Profit or Charity is incorporated federally however, it is governed by the CNCA (Canada Not-for-Profit Corporations Act), and the ONCA is not relevant to your Non-profit/Charity. This is the case even if your Not-for-Profit’s head office address is in Ontario.

What changes were introduced under ONCA?

Changes introduced under ONCA include:

• Minimum and maximum notice dates for Members’ Annual General Meetings
• Articles must outline membership structures
• Electronic voting is allowed
• Proxy voting is allowed
• Member proposals at Annual and Special Meetings
• Directors need not be members
• Employees of the Non-profit can be directors
• Directors can hold multiple offices
• Default quorum rules for Members’ Annual General Meetings
• Directors must consent in writing to their appointment
• New eligibility criteria for directors
• Minimum number of directors and maximum terms for directors
• Special rules for Public Benefit Not-for-Profit Corporations
• Flexibility for financial reporting

What Are My Options Under the ONCA?

Your Ontario Not-for-Profit and Charity has three years from October 19, 2021 to update your Letters Patent and Bylaws to bring them into compliance with the ONCA.

Many Not-for-Profits and Charities currently governed by the ONCA are considering transitioning out of the provincial ONCA jurisdiction and “continuing” into the federal CNCA legislation. There are many benefits to the CNCA legislation, but you should speak with an lawyer with experience and expertise in charity and Not-for-Profit law before deciding on the best course of action for your Not-for-Profit.

What should We Do to Comply with the ONCA?

Your board of directors, ideally together with experienced legal guidance, should review your Letters Patent, bylaws, and minute book documents to ensure that they comply with the ONCA and reflect best governance practices.

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