Ontario Moves Forward with Significant Corporate Developments
Oct 2021 Charity & NFP Law Update
Published on October 28, 2021

By Theresa L.M. Man

   
 

ONCA Finally Proclaimed Into Force After Decade-Long Delay

As anticipated, the Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”) was proclaimed into force on October 19, 2021. While the ONCA received Royal Assent in 2010, its proclamation was delayed for over ten years. As explained in the Charity & NPF Law Bulletin No. 501, The ONCA Is Finally Coming! Preparing For Transition, the ONCA introduces sweeping changes for Ontario charities and not-for-profit corporations, including changes to corporate structure and governance, and applies automatically to all non-share capital corporations that were incorporated under Part III of the Ontario Corporations Act.

Charities and not-for-profit corporations have an optional three-year “transition process” to amend their governing documents and bring them into compliance with the ONCA. Although it is optional for corporations to undertake a transition process within three years to amend their governing documents to comply with the rules in the ONCA, it is generally prudent for corporations to undertake the transition process in order to avoid uncertainty of their documents.

Along with the proclamation, the government launched the new Ontario Business Registry on the same day, as discussed below. To provide further clarity on corporate applications under the ONCA, the Office of the Public Guardian and Trustee in Ontario has provided a Question and Answer document, also discussed below.

Ontario Launches New Ontario Business Registry

The Ontario Ministry of Government and Consumer Services (the “Ministry”) launched the long-anticipated Ontario Business Registry (the “Registry”) on October 19, 2021, at the same time as the proclamation of the ONCA. The new Registry provides business owners and not-for-profits direct access to online government services at all times. Through the Registry, registrations and filings previously submitted by mail or fax (which could take up to six weeks to complete) can now be done instantly online. Annual corporate returns can be completed electronically in the Registry, allowing corporations to keep all their important filings in one centralized location. Further, the Registry is integrated with the Canada Revenue Agency (the “CRA”), enabling the identification of a business or not-for-profit corporation by a single business number, further streamlining administrative processes.

Basic information about not-for-profit corporations is available for search through the Registry, including corporate names and numbers, incorporation date, corporation type, status, governing jurisdiction, and registered office address. For not-for-profit corporations that were incorporated prior to the launch of the Registry, this information has been automatically migrated to the Registry. Corporations can access their profiles through the Registry by logging in to ONe-key. The Registry also allows for new not-for-profit corporations to be incorporated online.

As indicated above, annual returns can now be filed online through the Registry. The CRA previously stopped accepting annual returns on behalf of the Ministry as of May 15, 2021, and corporations whose annual returns were due thereafter were exempt until the launch of the Registry. With the launch of the Registry, corporations whose annual returns were due between May 15 and October 18, 2021 did not have to file an annual return for 2021; those whose annual returns are due after October 19, 2021 will be required to file through the Registry.

For further details on services available under the Registry, a full list of services is available online.

Ontario PGT Clarifies Q&As Regarding Corporate Applications Under ONCA

With the proclamation of the ONCA on October 19, 2021, not-for-profits in Ontario need be aware of some new and amended processes. As discussed in the September 2021 Charity & NFP Law Update, the Ontario Public Guardian and Trustee (“PGT”) circulated a Question and Answer Sheet in response to questions it had received about the ONCA. Since its circulation, the Question and Answer Sheet was amended as of October 8, 2021 to clarify its response to certain questions.

The PGT clarified that it will not be involved in any corporation applications by charities, except when a charitable corporation under the ONCA wishes to change its purposes but does not want to use the after-acquired clause; when the applicant wishes to use the term “Foundation” if the word suggests the corporation is a charity, or the word ‘Charity’ in the corporate name. As well, the PGT will be involved if it has requested notification of any application for changes with respect to the corporation.

The PGT also clarified that for corporations that have registered as a charity and applied for a change in their articles, the after-acquired clause (i.e. a clause requiring that properties of a charity acquired after the updating of the charitable purposes be applied to the new purposes) will be automatically included in the electronic system. Applicants wishing to omit the clause must contact the PGT separately to request a letter allowing the charity to remove the clause.

All of the PGT’s review of requests will be paper-based (via mail, courier or email). It will then provide a PDF copy of a letter and, upon inquiry from ServiceOntario, will confirm PGT approval.

Ontario Extends Relief for Members’ and Directors’ Electronic Meetings to September 2022

Temporary relief to Corporations Act (“OCA”), Co-operative Corporations Act (“CCA”) and ONCA corporations in relation to holding electronic meetings of directors and members in response to the COVID-19 pandemic has been extended to September 30, 2022. In this regard, as reported in the October 2020 Charity & NFP Law Update, the Ontario government provided temporary relief to these corporations in relation to holding electronic meetings of directors and members in response to the COVID-19 pandemic. Similar relief was initially provided to ONCA corporations by way of Bill 276, Supporting Recovery and Competitiveness Act, 2021, explained in the April 2021 Charity & NFP Law Update. The rules in all three statutes were amended to permit electronic meetings of directors and members to be held during the “temporary suspension period”, regardless of contrary provisions in a corporation’s constating documents.

While the temporary suspension period was already extended to May 31, 2021 and subsequently extended to December 31, 2021, the Ontario government has again provided a further extension to the temporary suspension period until September 30, 2022, through the filing of O Reg 690/21, Extension of Temporary Suspension Period under the OCA, O Reg 691/21 Extension of Temporary Suspension Period under the CCA, and O Reg 693/21, Extension of Temporary Suspension Period under the ONCA. However, as with the previous extension, the timelines for annual general meetings are not extended.

   
 

Read the October 2021 Charity & NFP Law Update