ONCA Changes To Ontario Not For Profit Organizations
With the launch of the new Ontario Business Registry on October 19, 2021 the Ministry of Government and Consumer Services, together with the Office of the Public Guardian and Trustee for Ontario initiated the long-awaited Ontario Not for Profits Corporation Act, 2010 (ONCA). With the intention of streamlining the Not for Profit incorporation process, this revision to the Ontario Act governing assists to modernize the Not for Profit and Charitable organizations in Ontario. These entities are also known as NonProfit or NGO, charity, and NFP. This brings the province of Ontario’s legislation in line with other jurisdictions across Canada that have already updated their acts.
Not For Profit Incorporation After October 19, 2021
If your Ontario Not for Profit or Charitable Organization was incorporated after October 19, 2021, or if you are currently in the process of incorporating your entity, you will automatically be registered under the new ONCA act. Your newly incorporated Ontario NFP or Charity would be issued Not-for-Profit Articles of Incorporation.
Not For Profit Incorporation Prior to October 19, 2021
For those who registered their Not For Profit or Charitable Organization prior to October 19, 2021, the incorporation took place under the old Not For Profit Act and would have been provided with ‘Letters Patent’ as their incorporation documentation. For those Ontario charities and not for profits that were in existence prior to the new ONCA act date, there are required updates that are mandatory to ensure the corporation is in compliance with the new act.
What Has Changed For Existing NFPs Registered in Ontario?
There are a number of updates to the new ONCA act that help simplify how a not for profit and charitable organization is established and how each operates. Many of these changes impact how decisions are made by board members internally and in providing more clarity for activities the not for profit can engage in.
- The new legislation gives clearer guidance for the governance of not for profits, increases the accountability of directors and mandates that they act in good faith with the best interest of the organization in mind.
- Charitable organizations no longer require approval from the Office of the Public Guardian and Trustee, unless their name includes one of the following:
- Charity, charitable, organisme de bienfaisance, caritative (or a variation of these)
- Foundation or Fondation, if used to suggest they are a charity
The Ministry of Government and Consumer Services provides in-depth literature in the Guide to the Not-for-Profit Corporations Act (ONCA), to assist those who wish to become much more familiar with the new legislation.
Not for Profit and Charitable organizations in Ontario incorporated prior to October 21, 2021 have been granted a three year timeframe to make the required changes or amendments to their original incorporation to comply with the new ONCA legislation. The deadline for completion of the documentation updates is October of 2024.
To conform with the new ONCA, Ontario Not for Profits and Charities are required to file Articles of Amendment, previously known as ‘Supplementary Letters Patent.’ The Articles of Amendment in general are the legal documents filed when corporations, whether profit or not for profit, wish to change the following changes
- Name of the Entity
- Change the Object Clauses
- Change the Special Provisions or share structure (in the case of a business corporation)
- Change the Minimum and Maximum Number of Directors
How Can I File Articles of Amendment To Comply With ONCA?
If you are seeking to file Articles of Amendment to comply with ONCA (Ontario Not-for-Profit Corporations Act) and do not intend to change the name or objects of your organization, there is still one important requirement that must be fulfilled. All existing not-for-profit entities in Ontario are now mandated to specify the number of directors for their corporation, whether it is a minimum, maximum, or fixed number.
Previously, it was not necessary to declare the minimum number of directors, but under the new ONCA legislation, it is now a prerequisite. Therefore, when submitting the Articles of Amendment to transition into the new act, it is imperative to include this change to ensure compliance with ONCA regulations.
What Has Changed For Ontario Charitable Organizations?
If the existing not for profit corporation also includes the charitable status, there is also a requirement to add wording under the existing special provisions section (section 5) article documents. The wording for the object of the existing corporation is not mandatory to change.
The corporation may continue with the object clauses as previously provided. A new paragraph is required to be added to the existing or if you wish new objects clauses including the following “After acquired” paragraphs:
“All funds and other property held by the corporation immediately before the articles become effective or that are received subsequently by the corporation pursuant to any will, deed or other instrument made before the articles become effective, together with any income or other accretions to the funds or other property, will be applied only to the purposes of the corporation as they were immediately before the articles become effective.”
The only exception to this would be those organizations who have already obtained consent previously from the Public Guardian and Trustee to not include this clause. In most cases, this clause would need to be added when the Articles of Amendment are filed for charitable organizations or those intending to now operate as a charity.
What Has Changed to the Information on File For an Ontario NFP/Charity?
With the introduction of the new Ontario Business Registry came sweeping changes to the details of all Ontario incorporated entities. All business and not for profit corporations in Ontario are now required to list an official email address to replace the mailing address requirement, as well as the introduction of the NAICS code which provides a specific listing for the business activity. The Naics code provides a numeric digit to the business activity of the corporation and is used by the Ministry for statistical purposes.
In addition to the minimum of three directors, NFP incorporations are also required to appoint a Chair from their board of directors. This title can be listed as Chair, Chairperson, Chairman or Chairwoman.
Under the previous Not-for-Profit Act, the requirement was to list a President and Secretary in order to comply with the act. The new legislation means that if a Chair is not already listed, a Notice of Change would be filed to make this appointment. The Chair may hold multiple officer positions within the organization; for example, a director can be appointed to the title of President and Chairperson.
Updates to the Not For Profit/Charitable Organization
A Notice of Change can be completed at any point to reflect any change or changes to the corporation including the typical updates including the corporate address, members/directors change including added or removing and/or members/directors address/es.
When filing a Notice of Change you can also update the email address, NAICS code and officer titles, including chair, within the same filing.
The new Ontario Not for Profit Corporations Act (ONCA) sets out to improve the overall operation and functionality of all Not For Profit and Charitable organizations in Ontario.
Ontario Business Central has assisted individuals to incorporate, amend or dissolve Ontario Not For Profit and Charitable organizations for over 30 years. Our team of experts is available to help transition organizations to the new ONCA legislation seamlessly.
If you have any questions about the process of filing your Articles of Amendment or updating the details of your Not for Profit through filing a Notice of Change, please feel free to reach out. Our staff are here to help answer your questions and make the process simple.
