On November 14, 2017, some parts of the Cutting Unnecessary Red Tape Act, 2017 came into effect. Other parts take effect on January 13, 2018. The Act, also known as Bill 154, makes changes to Ontario’s Corporations Act (OCA) and to a future law, Ontario’s Not-for-Profit Corporations Act, 2010 (ONCA).
The Current law section reflects these new changes. The Future law section does not currently reflect these new changes. We are working hard to update it as fast as possible. In the meantime, here is a quick overview of some of the most important points for existing nonprofits.
|Attention! Since Bill 154’s changes to the ONCA will not take effect until the ONCA takes effect, you do not need to worry about them now.|
What you can do now…
Because of changes to the OCA, you now have some new options. In some cases you will need to change your bylaws to take advantage of these new options.
These new options make it:
- Easier to hold meetings of members…
Unless your bylaws do not allow it, you can have meetings of members over the phone or electronically. You can also give notice of a meeting of members electronically.
- Easier to recruit directors outside the nonprofit…
If your bylaws allow it, you can have directors who are not members of your nonprofit.
- Easier to remove troublesome directors…
If your letters patent or bylaws currently require a two-thirds majority vote at a meeting of members to remove a director, you can take out that requirement and now remove a director with just over half of the votes at a meeting of members.
- Easier to waive an audit for small nonprofits…
If your nonprofit receives less than $100,000 in revenue in a year, you can now waive an audit for that year with 80 percent of the votes in favour at a meeting of members.
What you might like to know about now…
Some changes in Bill 154 don’t require any action on your part but they are still good to know about.
- What’s expected from directors…
Whether your director is a lawyer or a lumberjack, the same basic things are now expected of all directors.
- What can incorporated nonprofits legally do…
Before January 13, 2018, an incorporated nonprofit could only do what the OCA, its letters patent, and its bylaws said it could do. Now, an incorporated nonprofit can do everything an individual can do unless the law, its articles or its bylaws say it cannot. In all cases, nonprofits should only do things that help achieve the goals listed in its letters patent.
- What happens when the OCA conflicts with other laws…
If the OCA conflicts with other laws, for example, charity law, then those other laws should be followed.
Some important changes to the ONCA…
Bill 154 contains a number of important changes to the ONCA that nonprofits and charity lawyers requested. You do not need to worry about them now, since these changes will not take effect until the ONCA takes effect at the earliest.
Here are some highlights:
- The sections giving non-voting members certain important voting rights will be delayed to at least 3 years after the ONCA takes effect.
- The sections giving each class of voters a collective veto on important decisions will also be delayed to at least 3 years after the ONCA takes effect.
- Nonprofits no longer have to give their members proxy voting rights, unless your bylaws say so. Bylaws can say that only members are allowed to be proxies. Also, your bylaws can provide for mail-in or electronic voting if you wish.
For a more detailed summary of the law and some analysis, visit:
- Ontario Nonprofit Network
- Gray, Whitley LLP
- Carters Professional Corporation (OCA) (ONCA)
- Drache Aptowitzer (OCA) (ONCA)
Reviewed: December 2017