By Tracey Rynard, Associate
Thank-you to all the stand-up folks who volunteer their time to charities and not-for-profits in our local communities.
If you are a director and/or member of a not-for-profit corporation (or know someone who is and want to wow them with your acquired legal knowledge) then this blog’s for you. Ontario and Canada have both seen fit recently to update sorely out of date not-for-profit legislation.
The Canada Not-for-profit Corporations Act has been in force since last October 2011. If you are a director and/or member of a Canadian not-for-profit corporation and did not know this – don’t panic – yet. Your board of directors has until October of 2014 to file articles of continuance and update your by-laws. Make note of that date though because if you have not taken any action by then the old legislation will become inactive and your not-for-profit corporation will be dissolved. Poof. Gone.
The new Ontario Not-for-profit Corporations Act, 2010 received Royal Assent in 2010 (the clue is in the title) but is not yet in force. At first, the government declared the fall of 2012 to be the timing for an in-force date. They have since reneged on that (hey, they probably have better things to do this summer than draft boring old regulations). The expected in force date is now January 1st of next year. After the legislation is in force, not-for-profit corporations incorporated under Ontario legislation will have three years to amend their governing documents to conform to the new legislation. After three years, the corporation won’t be dissolved but any non-conforming provisions will be deemed to have been amended to conform. This isn’t as onerous as the Canadian legislation’s countdown to cancellation but I will tell you, and I could be alone in this opinion but I’m pretty sure I’m not, that relying on non-conforming governing documents = bad.
Both federal and provincial legislation heavily rely on the influence of for-profit corporate provisions which means the new rules are (meant to be) better organized and more comprehensive than both their previous renderings. (Stay tuned for my future blog “How the new not-for-profit legislation did and didn’t make things better”). Please note that I said “better organized” and “more comprehensive”; I didn’t say “easier”. Corporations may undertake the task of continuing under their respective legislation themselves, however, if you are a director and your plans this summer don’t include learning the difference between a “soliciting” and “non-soliciting” corporation or a “public benefit” and “non-public benefit” corporation (and are therefore by default more interesting than mine) I am available to answer all questions and assist you in this process.