Warning: In November 2017 and January 2018, Bill 154, or the Cutting Unnecessary Red Tape Act, 2017, made many changes to the ONCA. The Bylaws section of the website does not yet include these changes.
What is the ONCA?
The Ontario Not-for-Profit Corporations Act, 2010 (ONCA) contains the rules for forming and running a nonprofit in Ontario. It covers areas like the rights and responsibilities of members and directors, and the requirements for meetings and financial statements. When it takes effect, nonprofits will no longer be governed under the old Ontario’s Corporations Act (OCA).
Does the ONCA apply to my nonprofit?
If you are incorporated as a nonprofit under OCA, this new Act will apply to you.
If you are incorporated federally, the ONCA does not apply to you. You are covered by the Canada Not-for-Profit Corporations Act.
Some nonprofits, like horticultural societies and conservation authorities, are incorporated under other Ontario laws and statutes. The ONCA will apply to these corporations “except where otherwise expressly provided.” If your organization is incorporated under one of these laws, visit the Ministry of Government and Consumer Services’ Guide to the Not-for-Profit Corporations Act for guidance.
What has changed in the new law?
The changes are set out in detail in the Ministry of Government and Consumer Services’ Guide to the Not-for-Profit Corporations Act. Below are some of the changes to be aware of.
When the ONCA comes into effect, it will:
- make it easier to incorporate because applications to incorporate will go to ServiceOntario and the Ministry can now approve certain documents online. The Ministry will need to change its regulations to allow for online approval.
- make a new distinction between public benefit corporations and other nonprofits
- allow a simpler process for reviewing financial records, especially for small organizations
- provide clearer rules on areas like directors’ responsibilities and conflicts of interest
- clarify that nonprofit organizations can engage in commercial activities if the activities support the organization’s nonprofit purposes (but registered charities still face restrictions)
- provide members with actions they can take if they believe directors are not acting in the best interests of the corporation
- give members greater access to financial records
What does the ONCA mean for my organization?
Many of the changes are designed to make it easier for nonprofits to operate:
- You can now use email and other online methods for communications and meetings.
- nonprofits that are incorporating for the first time should find the process easier. Documents can be filed electronically. Before, incorporation required more paperwork that had to go through two government departments.
- Corporations now have all the rights and powers of a “natural person.” Before, you had to specify in your bylaws each power that was permitted.
- The standard of care for directors is more clearly defined. They must act with reasonable care, honestly, in good faith, and in the best interests of the corporation. Before, the standard was not clear.
- The rules requiring audits have changed. For example, smaller nonprofits can have “financial review engagements,” which are cheaper than full audits. nonprofits with annual budgets under $100,000 can waive the requirement for an audit or financial review engagement entirely if over 80 percent of their members agree. The members must renew their agreement each year.
We have detailed key features of the ONCA that organizations should be aware of.
Reviewed: Oct 2015