About the Not-for-Profit Corporations Act (ONCA)

Ontario’s Not-for-Profit Corporations Act (ONCA), 2010 will make it easier for not-for-profit corporations to operate in today’s economy.

The government is fully committed to bringing ONCA into force at the earliest opportunity and will provide the sector with at least 24 months’ notice before proclamation. Existing corporations will have a three-year transition period once ONCA is in force and assistance will be available to ensure a smooth transition to implementation.

Key Features

ONCA will make it simpler to incorporate and will ensure greater transparency and accountability in how not-for-profit corporations in Ontario are run. When ONCA comes into effect, it will:

  • Make the incorporation process more efficient
  • Provide clearer rules for governing a corporation and increase accountability
  • Clarify that not-for-profit corporations can engage in commercial activities if the activities support the corporation’s not-for-profit purposes
  • Allow corporations to use a review engagement in place of an audit in some situations. This is a simpler process for reviewing a corporation’s financial records
  • Enhance member’s rights and give them actions they can take if they believe directors and officers are not acting in the best interests of the corporation
  • Provide members with greater access to financial records

Review Engagement Process

ONCA will allow a review engagement process – a process for reviewing a corporation’s financial records that is simpler than an audit.

The ability to use a review engagement instead of an audit will depend on an organization’s annual revenue and whether the organization is a public benefit corporation.

ONCA makes a new distinction between public benefit corporations and other not-for-profit corporations. 

A public benefit corporation is a charitable corporation or a non-charitable corporation that receives more than $10,000 a financial year in:

  • donations or gifts from persons who are not members, directors, officers or employees of the corporation; or
  • grants or similar financial assistance from federal, provincial or municipal governments or a government agency.

Public Benefit Corporations

Members of a public benefit corporation with annual revenue of $100,000 or less can waive both an audit and a review engagement by an extraordinary resolution.

Members of a public benefit corporation with annual revenue of more than $100,000 but less than $500,000 can waive audit requirements and use the review engagement process by an extraordinary resolution.

If a public benefit corporation has annual revenue of $500,000 or more, an audit is still mandatory. 

An extraordinary resolution is an approval from at least 80 per cent of the votes cast at a special members’ meeting or where all voting members consent.

Other Not-for-Profit Corporations

If a corporation is not a public benefit corporation and has annual revenue of $500,000 or less, its members can waive both an audit and a review engagement by an extraordinary resolution.    

If this type of corporation has annual revenue of more than $500,000, its members can waive the audit requirement and use the review engagement process by an extraordinary resolution.

The chart below outlines the type of financial review required under ONCA.

Financial review required under ONCA
Type of Corporation Amount of Revenue Type of Financial Review
Public Benefit Corporation $ 100,000 or less Waive*
More than $100,000 but less than $500,000 Review engagement*
$500,000 or more Audit
Non-Public Benefit Corporation $500,000 or less Waive*
More than $500,000 Review engagement*

*Approval to waive an audit or to waive both an audit and review engagement requires an extraordinary resolution.

Enhanced Member’s Rights

ONCA will improve the rights of members of Ontario not-for-profit corporations.

Under ONCA, a corporation may have different types of members, including voting and non-voting members.   

A corporation must have at least one class of voting members. Each member has one vote at a member’s meeting, unless the organization’s articles say otherwise. If a corporation has two or more classes or groups of members, it must be set out in its articles (some existing corporations may currently have this in their by-laws). Corporations must set out the conditions for memberships in their by-laws.

Will ONCA affect your organization

When ONCA takes effect it will apply to every corporation without share capital incorporated under an act of the Ontario legislature, including the current Corporations Act (CA).

Existing not-for-profit corporations will not be required to file articles of continuance for ONCA to apply.

There are some exceptions, including:

  • Companies with social purposes, like share capital social clubs (golf, tennis or country clubs, for example). These companies will continue to be governed by the CA for a transition period of five years. After that, they must continue as:
    • A non-share capital corporation under ONCA; or
    • A co-operative corporation under the Co-operative Corporations Act, or
    • A share capital corporation under the Ontario Business Corporation Act
  • Insurance corporations under Part V of the CA. These organizations will continue to be governed by that Act
  • Corporations without share capital that fall under the Co-operative Corporations Act
  • When a statute clearly says otherwise.

Preparing for ONCA

Existing not-for-profit corporations will have a three-year transition period once ONCA is in effect to make any necessary changes to their incorporation and other documents to bring them into conformity with ONCA.

For example, corporations may need to make changes to their by-laws, letters patent, supplementary letters patent and special resolutions. After the transition period, these documents will automatically be considered amended to the extent necessary to bring them into conformity with ONCA.

Existing corporations are encouraged to review their documents before the end of the transition period.

Support Tools

The government is preparing a set of tools to help corporations transition to ONCA. Also, Community Legal Education Ontario (CLEO) will provide support to not-for-profit corporations as they make the transition to ONCA.

Guide to ONCA

A plain language guide will explain sections of ONCA that will likely have the most impact.

Transition Checklist

A transition checklist provides general information about the steps most existing not-for-profit corporations may need to take to conform with ONCA.

Draft Default Organizational By-law

A draft default organizational by-law will deal with organizational matters. Existing not-for-profit corporations may wish to refer to it for language and content when reviewing and amending their own by-laws.

Once ONCA takes effect, the default by-law will automatically apply to newly incorporated not-for-profit corporations if they do not pass an organizational by-law within 60 days after the date of incorporation. These organizations may amend or repeal and replace the default by-law at a later date if they wish.

Electronic Toolkit

We encourage corporations to request an electronic toolkit by emailing ONCAtools@ontario.ca. This kit can be used to explain ONCA to members and stakeholders. It includes:

  • Newsletter and bulletin articles of varying lengths
  • Web text of varying lengths
  • Facebook posts
  • Presentation slides
  • Speaking points
  • Presenter questions and answers

Corporations may change fonts and layouts to fit their own communication style. However, to ensure a consistent message, wording should not be altered in any way.

Learn more about Ontario's Not-for-Profit Corporations Act