The Not-for-Profit Corporations Act, 2010 (“ONCA”) came into force on October 19, 2021. Not-for-profit corporations incorporated in Ontario will have a three year transition period to make changes to their governing documents to comply with the ONCA. During the transition period, the ONCA will apply where the not-for-profit corporation’s existing governing documents are silent. Our ONCA Fast Facts series explores what is new and different in the ONCA. This week we talk about proxies.
Proxy means an authorization by means of which a Member has appointed a proxyholder to attend and act on the Member’s behalf at a meeting of the Members to the extent and with the power conferred by the proxy. The ONCA changes some of the rules and practices for proxies.
Previously, under the Corporations Act (Ontario), Members of not-for-profit corporations had a right to vote by proxy, and organizations could not restrict this right and could not prescribe who could hold a proxy. The Corporations Act specified that proxy holders did not need to be Members of the corporation.
Now, under section 64 of the ONCA, a Member may appoint a proxyholder only if the articles or by-laws of the corporation permit it. The articles or by-laws can also require that a proxyholder must be a Member of the corporation. In preparing for upcoming annual meetings, not-for-profit corporations should consider if the by-laws address the use of proxies and reflect on whether or not it is a desired continued practice. For those not-for-profit corporations where Members may vote by proxy, the ONCA regulation 395/21 provides requirements for the form of proxy including:
- information that must be indicated in bold type;
- designated space for signature;
- the powers granted under the proxy; and
- providing a means for the members to specify that the membership registered in their name is to be voted for, against, or withheld from voting in respect of different matters.
Organizations are advised to review and revise their form of proxy to ensure compliance with the ONCA.
In addition to, or instead of voting by proxy, under the ONCA, a not-for-profit corporation’s by-laws may provide for voting by mail, telephone, or electronic means.
It is important to note that the Public Hospitals Act continues to prohibit proxy voting by Members of public hospitals. The ONCA provides that if there is a conflict between the ONCA and other legislation, the other act or regulation will prevail. For more information on the ONCA continue to follow our ONCA Fast Facts series.