How to comply with the Not-for-Profit Corporations Act
This article was originally published by The Hamilton Spectator.
Q: How can I get my not-for-profit corporation ready to transition to Ontario’s new Not-for-Profit Corporations Act?
A: In 2021, the Not-for-Profit Corporations Act (Ontario), or “ONCA”, came into force, affecting almost all corporations previously governed by the Ontario Corporations Act.
Most charitable and not-for-profit corporations have until October 2024 to achieve compliance with the new requirements of the ONCA.
What’s needed to comply?
The ONCA has implemented several new rules, which are either mandatory, optional, or apply by default. To comply, most corporations will need to amend their Letters Patent or Articles and update their bylaws to align with the mandatory rules, state their position on any optional items, and override any rules that otherwise apply by default.
What happens if the transition date is missed?
If your corporation does not transition to the ONCA by October 18, 2024, its corporate governance documents will be overridden with respect to any mandatory or default rules implemented by the ONCA. Having your governance documents overridden by this statute has the potential to cause confusion and disruption to the way the corporation operates. It’s prudent for corporations to avoid this uncertainty and disruption by completing the ONCA transition process in advance.
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