By Jacqueline M. Demczur and Theresa L.M. Man

It is now just over four months since the deadline for Ontario not-for-profit (“NFP”) corporations to transition under the Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”) ended on October 18, 2024. Many corporations submitted their articles of amendment to the Province of Ontario on or before this transition deadline, although there have been considerable delays in the issuance of certificates of amendment by the Province in recent months. 

In speaking with various organizations in the charitable/NFP sector, we have found that there are still many Ontario corporations that have not started their ONCA transition process. We are also aware of some Ontario not-for-profit corporations which believe that they have completed the ONCA transition process but, in fact, have missed key aspects of the transition process, such as adopting a new ONCA-compliant by-law but omitting to address key compliance issues through the filing of articles of amendment.

The ONCA was proclaimed into force on October 19, 2021. As of its proclamation, the ONCA automatically applies to all non-share capital corporations under Part III of the Ontario Corporations Act (“OCA”). For the first three years after proclamation (i.e., until October 18, 2024), any provisions in their letters patent, supplementary letters patent, by-laws or special resolutions that are inconsistent with the ONCA would continue to apply and take precedence over any inconsistent ONCA requirements.  Many Ontario NFP corporations completed an optional transition process during this three-year period to amend their letters patent (by adopting articles of amendment) and to adopt ONCA-compliant by-laws to bring them intro compliance with the rules in the ONCA.

However, for those Ontario NFP corporations which have not completed the ONCA transition process during this three-year period, then as of October 19, 2024, any provisions in their letters patent, supplementary letters patent, by-laws, or special resolutions that are inconsistent with the ONCA will be deemed (subject to a few exceptions listed in subsection 207(3) of the ONCA) to be amended to comply with the ONCA. The problem with this deeming approach is that it will be difficult and confusing to determine which provisions are deemed to be amended and in what way they are to be deemed to have been amended to comply with ONCA.

While it is good news that failure to undertake or complete the transition process by the October 18, 2024 date does not result in the dissolution of these Ontario NFP corporations, it will likely be difficult to live with the automatic deeming mechanism going forward, particularly in the event of any governance challenges or other types of corporate disputes taking place. Consistent with our past commentary, it would be best for these corporations to speak with their legal counsel concerning the appropriate action to be taken to ensure compliance with the ONCA by completing the transition process as soon as possible, as well as obtaining advice on how best to operate under the ONCA during the intervening period.

It is also important to note that the October 18, 2024 deadline does not apply to share capital social club corporations under Part II of the OCA. These corporations have 5 years (i.e., until October 18, 2026) to continue out of the OCA and be continued under 3 options: (i) a non-share capital corporation under the ONCA, (ii) a co-operative under the Ontario Co-operative Corporations Act, or (iii) a share capital corporation under the Ontario Business Corporations Act. Although some social clubs have already completed their continuance, there are still many that have yet to do so. This continuance process is much more complicated than the transition process for Ontario NFP corporations explained above. With less than two years left, it would be prudent for these share capital social club corporations to seek legal assistance to commence this process in the near future.

​Read the February 2025 Charity & NFP Law Update