The deadline to transition to the Not-for-Profit Corporations Act is rapidly approaching
Is your charitable or not-for-profit corporation prepared to comply?
On Oct. 19, 2021, the Not-for-Profit Corporations Act (Ontario) (“ONCA”) came into force, affecting almost all corporations previously governed by legislation called the Ontario Corporations Act.
Most Ontario charitable and not-for-profit corporations have until Oct. 18, 2024, to achieve compliance with the new requirements of the ONCA.
Q: What does my organization need to do to comply with the ONCA?
The ONCA has implemented a number of new rules, which are mandatory, optional or apply by default.
In order to achieve compliance, most corporations will need to amend their letters patent or articles and update their bylaws to comply with the mandatory rules, state their position on any optional items, and override any rules that otherwise apply by default.
Q: What happens if my organization does not comply by Oct. 18, 2024?
If your charitable or not-for-profit corporation does not transition to the ONCA by Oct. 18, 2024, as it should, its corporate governance documents will be overridden with respect to any mandatory or default rules implemented by the ONCA.
This has the potential to cause confusion and disruption to the way the corporation operates because the corporation’s governing documents may be overridden by the statute.
It is prudent for corporations to avoid this uncertainty and disruption by completing the ONCA transition process prior to this date.
We strongly recommend seeking legal advice well in advance of the transition deadline to help your charity or not-for-profit corporation achieve ONCA compliance before Oct. 18, 2024.
This article was originally published by The Hamilton Spectator.
