Key Features of the Not-for-Profit Corporations Act
When it comes into force the Not-for-Profit Corporations Act, 2010 will:
- simplify the incorporation process
- the new Act will reduce the time it takes to incorporate and will allow for electronic incorporation
- improve corporate governance and accountability
- it will provide a statutory duty of care for directors, which holds them to a higher standard to act in good faith and in the best interests of the organization
- provide more rights for members
- members will have more remedies if they believe directors are not acting in the best interests of the corporation
- members will have greater access to financial records
- if disciplinary action is being considered against a member, the member will have the right to be given notice with reasons and the right to be heard
- clarify that not-for-profit corporations are allowed to engage in commercial activities where the profits are reinvested in support of the corporation’s not-for-profit purposes
- provide a simpler financial review process in place of an audit in specified circumstances
- align with modern legislation in other Canadian jurisdictions such as the Canada Not-for-Profit Corporations Act, which received Royal Assent on June 23, 2009.
It is anticipated the Not-for-Profit Corporations Act, 2010 will come into force in late 2012. Time is required to develop regulations and adjust for new processes (e.g., computer hardware and software upgrades are required to accommodate the new incorporation system).
