The Ontario 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. Our ONCA Fast Facts series explores what is new and different in the ONCA. This week we discuss special resolutions.
Under the ONCA a special resolution means a resolution that, (a) is submitted to a special meeting of the members of a corporation duly called for the purpose of considering the resolution and passed at the meeting, with or without amendment, by at least two-thirds of the votes cast, or (b) consented to by each member of the corporation entitled to vote at a meeting of the members of the corporation or the member’s attorney. The requirements for a special resolution under the ONCA mark a significant change from those under the Corporations Act (Ontario) where previously a special resolution was required to be passed by the directors and confirmed by a two-thirds vote of the members at a meeting duly called for that purpose. Under the ONCA, board approval is not required for special resolutions.
The ONCA requires special resolutions for the following:
- to change the municipality or geographic township in which its registered office is located to another place in Ontario (ONCA 14(4));
- if a corporation’s articles provide for a maximum and minimum number of directors, the number of directors of the corporation must be the number determined from time to time by special resolution (ONCA 22(2));
- to make any amendment to the articles of a corporation to (ONCA 103(1)):
- change the corporation’s name;
- add, remove or change any restriction upon the activity or activities that the corporation may carry on or upon the powers that the corporation may exercise;
- create a new class or group of members;
- change a condition required for being a member;
- change the designation of any class or group of members or add, change or remove any rights or conditions of any such class or group;
- divide any class or group of members into two or more classes or groups and fix the rights and conditions of each class or group;
- add, change or remove a provision respecting the transfer of a membership;
- increase or decrease the number of, or the minimum or maximum number of, directors fixed by the articles;
- change the purposes of the corporation;
- change to whom the property remaining on liquidation, after the discharge of any liabilities of the corporation, is to be distributed;
- change the manner of giving notice to members entitled to vote at a meeting of members;
- change the method of voting by members not in attendance at a meeting of the members; or
- add, change or remove any other provision that is permitted by the ONCA to be set out in the articles;
- to adopt an amalgamation agreement (ONCA 111(5));
- for shareholders or members of a body corporate to authorize the directors of the body corporate to apply to the director for a certificate of continuance under the ONCA (ONCA 115(2));
- for a corporation incorporated under the ONCA or predecessor of the ONCA, other than a charitable corporation, to apply under the Co-operative Corporations Act to be continued as a co-operative corporation (ONCA 117(1));
- to authorize a sale, lease or exchange under section 118 of the ONCA (ONCA 118(6));
- to adopt an arrangement under section 120 of the ONCA (ONCA 120(3));
- to apply to court for an order approving an arrangement proposed by the corporation (ONCA 120(4));
- for voluntary winding up of the corporation by the members (ONCA 123(1));
- to authorize an application to be made to the court to wind up the corporation (ONCA 136(c)); and
- to dissolve a corporation (ONCA 166(a)).
Corporations are advised to review their by-laws and make appropriate amendments to reflect the new requirements for special resolutions.
For more information on the ONCA continue to follow our ONCA Fast Facts series.