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Should we incorporate under ONCA or CNCA?

On this page you will learn some of the main differences between incorporating in Ontario under Ontario’s Not-for-Profit Corporations Act (ONCA) and incorporating in Canada under the Canada Not-for-profit Corporations Act (CNCA).

Should we incorporate under ONCA or CNCA?

The answer to that depends on your nonprofit’s situation. One is not better than the other. Each has its own benefits and drawbacks. Knowing the differences between them may help you select the one that works best for your nonprofit. The next question explains the key differences.

What are the main differences between ONCA and CNCA?

The chart below explains some of the main differences between ONCA and CNCA.

 

ONCA

CNCA

Minimum number of directors required

3

1 for non-soliciting corporations

3 for soliciting corporations

Allows directors to be employees

Public Benefit Corporations

Up to one-third of directors can be employees.

Non-public benefit corporations

Allowed unless articles or bylaws say otherwise.

Charities

If you’re a charity, Canada Revenue Agency does not allow any directors to be employees.

Soliciting corporations

Must have at least 2 directors who are not employees. The rest can be employees.

Non-soliciting corporations

Allowed unless articles or bylaws say otherwise.

Charities

If you’re a charity, Canada Revenue Agency does not allow any directors to be employees.

Non-voting members

Cannot vote unless articles or bylaws say otherwise.

No matter what the articles or bylaws say, non-voting members can vote on major decisions such as changes to purposes, membership structures, or mergers.

Financial review standards

Less strict than CNCA

You also need to file more financial information with the Government of Canada.

Ex-officio directors

Allowed

Not allowed

Level of online support and customer service

Lower

Higher

Where you must incorporate

Must have a registered physical address in Ontario

Must have a registered physical address anywhere in Canada

Need a certified public accountant to file financial statements

No

Yes

Where you must file financial information

Do not need to file.

Only soliciting corporations have to file annually with Corporations Canada.

Possible to delay an AGM

No

Yes, by sending an official request to the Government of Canada.

What happens to assets if you close down

A charity must give its assets to another registered charity with similar purposes, or to a federal, provincial, or municipal government in Canada.

A public benefit corporation that is not a charity must give its funds to another public benefit corporation with similar purposes, or to a federal, provincial, or municipal government in Canada.

A soliciting corporation or registered charity

Assets must go to a “qualified donee” under the Income Tax Act (Canada), which includes a registered Canadian charity or the federal, provincial, or municipal government.

Information that must be available to the public

  • the registered address of the nonprofit
  • the names and addresses of directors and officers
  • the registered address of the nonprofit
  • the names and addresses of directors and officers
  • annual return
  • articles of incorporation, amendment, continuance, amalgamation, dissolution, as applicable to the organization
  • bylaws

For soliciting corporations:

  • financial statements

Type of organization that faces additional rules

Public benefit corporation

Soliciting corporation

Can we incorporate under ONCA and CNCA?

You can incorporate either under provincial legislation or under federal legislation. And if you have already incorporated under one, you can decide to switch and continue under the other.

But you cannot be incorporated under both of these laws at the same time.

Can all organizations be incorporated under CNCA?

No. Provincial legislation requires some organizations to incorporate in Ontario. For example, the Ontario Public Hospitals Act says that Ontario hospitals must be incorporated in Ontario. Similarly, nonprofits that get funding from the Ontario government may have to incorporate in Ontario.

We’re already incorporated. Does ONCA or CNCA apply?

The law you are incorporated under determines which rules you must follow.

My nonprofit has activities and fundraises out of Ontario, do I need to change my incorporation to CNCA?

No. Your nonprofit can carry on its activities and fundraise outside of Ontario even if it’s governed by ONCA. But you must still comply with all the laws that apply in all the other provinces or territories that you operate in.

It’s best to find out the rules that apply in the provinces and territories you operate in. They may have rules that require nonprofits incorporated outside their province or territory to register with them.

Reviewed: 2024-02-05