Ontario Takes a Step Closer to Implementing the ONCA

Kate Lazier, Toronto

On July 16, 2012 the Ontario Ministry of Government Services (the “MGS”) and the Ontario Ministry of Consumer Services (the “MCS”) released outlines of proposed regulations for the Not-For-Profit Corporations Act, 2010 (the “ONCA”).  The public is invited to comment on the proposed regulations by August 31, 2012.  

The backgrounder to these documents confirms that the ONCA is targeted to come into force on January 1, 2013. The documents also clarify the role that the MGS and MCS will perform with respect to the ONCA.

MGS will be responsible for the filing, recording and searching requirements under the ONCA, including handling new applications for incorporation.  MGS is seeking comments on the following aspects of the proposed regulation:

• rules governing corporations' names, including prohibited, restricted and permitted words or expressions, and punctuation and other marks, as well as rules respecting the form and language of a name;
• rules respecting the content, form and filing (both paper and electronic) of articles, applications and other documents;
• the supporting documents required to accompany articles and applications filed under the Act;
• rules governing the endorsement of articles and applications and the issuance of certificates by the Director appointed under the Act in both paper and electronic format;
• signature requirements for both paper and electronic filings;
• the methods by which notices or other documents may be sent by the Director and deemed receipt rules; and
• the manner in which the Director shall make the standard organizational by-laws publicly available.

MCS will oversee other technical matters in the ONCA.  It proposes, in summary, the following regulations:

• prohibiting a not-for-profit corporation from having as a purpose stated in its articles an authorization permitting the corporation to engage in activities that are contrary to the law;
• establishing the Canadian Institute of Chartered Accountants Handbook Accounting, as amended from time to time, as the standard for audit and review engagement reports;
• prescribing information in corporate registers for directors, officers and members (i.e., their name, an address for service, an email address if the person has consented to receiving information or documents by this method, the date on which each person became a director, officer or member) and the names of every former director, officer and member who ceased to be the same within the last six years. The members' register would also include the class or group of membership of members, if there is more than one class or group;
• permitting a corporation to give internal corporate notices electronically in certain circumstances if its by-laws provide for giving notice in this manner (e.g. notice of meetings, notice of refusal to members for not including a proposal in a notice of meeting, notice to members regarding the right to dissent);
• prescribing that a member's proposal and supporting statement cannot exceed 500 words in keeping with other Ontario and federal corporate law statutes;
• prescribing information that is required to be included in the form of proxy as follows:
  • the meeting where the proxy is to be used;
  • whether the proxy is solicited by or on behalf of the management of the
    corporation;
  • the name of the person appointed as the proxyholder to attend and act on the member's behalf at a members' meeting (or an alternate if the first proxyholder is unable to act); and
  • means to allow a member to:
    • specify how the proxyholder shall vote on a specific matter;
    • give a proxyholder general authority to vote on all matters to be voted upon at the meeting at the discretion of the proxyholder; or
• requiring certain notices, statements (including consents, dissents, waivers and revocations) and other documents to be given in writing (either on paper or electronically) (e.g., a director's consent to hold office as a director must be in writing). This requirement would generally maintain the status quo between the current Corporations Act and ONCA, harmonize with similar requirements under other corporate law statutes and be useful for evidentiary purposes.

Miller Thomson LLP’s Charity and Not-for-Profit Group can assist corporations transitioning under the ONCA.

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