After an eleven-year wait, the Ontario government has announced the Not-for-profit Corporations Act, 2010 (ONCA) will come into force on October 19, 2021.
Currently, the Corporations Act (the OCA) governs Ontario's non-share capital corporations, except for certain corporations created by statute. The OCA dates back to 1907 and is badly in need of replacement. When in force, ONCA will automatically take over as the governing statute for Ontario's non-share capital corporations, subject to certain exceptions (such as corporations under Ontario's Co-operative Corporations Act).
Subject non-share capital corporations will have three years to amend their letters patent, any supplementary letters patent, by-laws and special resolutions to conform with ONCA. After the three-year transition period, any provisions in these documents that are inconsistent with ONCA will be deemed to be amended to comply with ONCA (with a few limited exceptions).
Corporations should not rely on the deemed amendment of their corporate documents after the three year period passes. This would result in a confusing gap between the corporation's governing documents, as written, and the actual rules that govern the corporation.
Further, ONCA makes certain new opportunities available to subject corporations in some circumstances. For example, ONCA provides a new opportunity for corporations to carry out ""review engagements"" instead of obtaining audited financial statements, where certain conditions apply.
Existing Ontario non-share capital corporations are encouraged to begin reviewing their letters patent, supplemental letters patent (if any), by-laws and special resolutions to identify the changes that will be required to bring their corporation in line with ONCA prior to the end of the three-year transition period, and to identify any new opportunities under ONCA that may benefit the corporation. Once complete, they should prepare a time line to obtain the necessary approvals and to put resulting changes into effect.