Changing your bylaws before ONCA takes effect
This page is for incorporated nonprofits that want to change their bylaws but don’t know if they should wait for Ontario’s Not-for-Profit Corporations Act (ONCA) to take effect before changing them.
Generally, you don’t need to wait until ONCA takes effect to change your bylaws. But when changing your bylaws, you can’t put anything in them that goes against Ontario’s Corporations Act (OCA). This is because the law says your bylaws must always comply with current law– which at this time is the OCA.
There are some things that ONCA allows you to put in your bylaws that the OCA doesn’t allow. So when changing your bylaws, don’t put anything in them that would go against what the OCA says, even if the change complies with ONCA.
Here are some bylaws that that would violate the OCA if you change them to comply with ONCA:
Member proposals: Under ONCA, a single member may ask for a proposal to be included in the agenda for a members’ meeting. Under the OCA, a minimum of 5% of members have to ask for a proposal to be included in the agenda for a members’ meeting if they want the board to add it.
Proxy rights: Under ONCA, your members have proxy rights only if your bylaws say that they do. Under the OCA you don’t have a choice. Your bylaws must give your members proxy rights. This means, if you change your bylaws now to say that members cannot vote by proxy, it will violate the OCA. You can, however, limit the number of proxies any individual member holds, under OCA.
Number of directors: Under ONCA, your bylaws can say your nonprofit can have a range of board directors, for example, from 5-7 directors. Under the OCA, your bylaws must say the exact number of board directors your nonprofit must have. Under the OCA, you must have a minimum of 3 directors. The ONCA also specifies the minimum number of board directors a nonprofit must have. For example, if you’re a public benefit nonprofit, the ONCA says you must have at least 3 directors, but if you’re not, you’re allowed to have only one director.
Board quorum: Under ONCA, you can decide what your board quorum will be and then you have to put that in your bylaws. If you don’t, a majority of the number of directors or of the minimum number of directors required by the articles constitutes a quorum. Under the OCA, your board quorum cannot be less than 40% of your board directors.
Financial review: Under ONCA, nonprofits with more than $100,000 in annual revenue may pass an extraordinary resolution to waive an audit or review engagement. Under the OCA, nonprofits with more than $100,000 in annual revenue cannot waive an audit.
Corporate members: Under ONCA, corporations can be members of your nonprofit. The OCA implies that only individuals and unincorporated associations may be members.
Special meeting: Under ONCA, members’ meetings outside of annual meetings are called “special meetings”. Under the OCA, they’re called “general meetings”.
Members’ meeting quorum: Under ONCA, if you lose quorum during a members’ meeting, you can continue the meeting. Under the OCA, you cannot.
Officer positions: Under ONCA, you can appoint any officers you would like. Under the OCA, you must appoint a president and secretary at minimum.
If you want to change your bylaws for reasons other than ONCA, you may first want to find out the impact ONCA will have on those bylaws once it takes effect.
A bylaw that’s allowed under the OCA may not be allowed under ONCA. Or the impact it has after ONCA takes effect may not be what you had wanted. If this is the case, you have to be prepared to change your bylaws again after ONCA takes effect.
Non-voting member classes: If you create a type of membership now that doesn’t have the power to vote, you should know that ONCA might give those members the right to vote on important decisions, such as:
- changes to membership, and
- mergers with other nonprofits.
Director terms: Under the OCA, your bylaws can allow directors to serve for a term of 5 years. Under the ONCA, a director can serve for a maximum of 4 years. If you change a director’s term to 5 years, you will have to change it again after ONCA takes effect. Most nonprofits have directors’ terms of 1, 2 or 3 years, so this is unlikely to impact most organizations. Unless the bylaws stipulate otherwise, there is nothing to prevent a director standing for election to a subsequent term.
Members’ meeting notice for charities: If your nonprofit is a charity, then you can let your members know about upcoming meetings by putting a notice in a local newspaper every week for 3 weeks before the meeting. ONCA doesn’t allow this, and relying on such notice would not be good practice in any event.