ONCA: The Transition Period is Over – Are you Compliant?

By: Steve Indig and Kevin Lawrie

On October 18, 2024, the three-year transition period under Ontario’s Not-for-Profit Corporations Act, 2010 (ONCA) officially came to an end and all Ontario not-for-profit corporations are deemed to be in compliance with ONCA.  Failure to transition appropriately can mean several consequences for sport organizations. In this post, we will explore the key ramifications and risks of not transitioning.

Background

The ONCA has been on our radar for over 15 years and we have written extensively on the subject. Here are some of our articles:

• The Ontario Not-for-Profit Corporations Act (“ONCA”) to become law on October 19, 2021 (September 2021)
• ONCA Update – What’s New for Ontario Sport Organizations (January 2018)
• ONCA updates and current duties for Ontario-based organizations (June 2014)

Already Transitioned?

Have you already worked with Sport Law on your by-laws or articles of amendment? Maybe you are already compliant and you can ignore this post? Many organizations have had changes in the composition of the Board of Directors in the past decade-and-a-half so you might not be sure if your by-laws, articles and Ontario Business Registry (OBR) filings are up to date. Review your by-laws, articles, and the Ontario Business Registry to see if you are compliant – here are some key indicators that you have already transitioned:

• “Extraordinary Resolution” is defined
• By-laws include a section on “Director Consent and Resolution”
• Directors may only be removed by the Members by Ordinary Resolution at a Special Meeting
• Director vacancies are filled for the remainder of the term
• Members may decline, by Extraordinary Resolution, to appoint an Auditor
• By-laws may be amended by Ordinary Resolution
• Articles include:
  • A fixed number of Directors or a minimum and maximum number of Directors
  • If there is more than one voting class, a definition of Members and voting rights
  • A dissolution clause
  • The municipality in which your registered office is located
• The OBR is updated to include:
  • Primary Activity
  • Official email address
  • Official registered office
  • Accurate Directors and Officers (including a Chairperson)
  • Updated Annual Returns

If your by-laws, articles, or the OBR do not include the above-mentioned clauses or correct filings – or if your by-laws say something different (e.g., that the by-laws may be amended by Special Resolution) – then your by-laws are not compliant and it is possible you have not transitioned. We recommend contacting us as soon as possible.

The ONCA itself has undergone several changes in the past decade. If we worked with your organization on your by-laws prior to 2018 – but not since – we recommended reaching out again for a quick check-up to ensure that you are up-to-date.

One indicator of outdated by-laws is the use of the phrase “upon becoming law” in the definition of “Act” in the first Article of the by-laws. This means that we worked with your organization before several changes to the legislation came into effect – and additional updates need to be made.

Consequences of Inaction and Risks of Non-Compliance

Failing to amend your governing documents before the deadline did not trigger immediate dissolution or penalties from the government, but it does create a host of practical headaches. Under the ONCA, any clause that conflicts with the Act is automatically deemed amended to conform with the ONCA. This “deemed amendment” can lead to a confusing patchwork of rules, where your original documents no longer fully align with the law, making it difficult for Directors, staff, and Members to interpret and apply them consistently.

The risks of not transitioning can also be seen in day-to-day operations. For instance, improperly held meetings or invalid decision-making processes could arise, which could open the door to procedural challenges from Members or stakeholders. Organizations with multiple membership categories face an added layer of exposure, as these details must now be embedded in your articles rather than just by-laws—failure to file amendments here could spark governance chaos. Registered charities might even jeopardize their charitable status if outdated purposes or structures do not align with ONCA’s requirements, leading to complications with the Canada Revenue Agency. In summary, inaction heightens the potential for disputes, operational inefficiencies, and unintended legal vulnerabilities, all of which can strain resources and cause problems in the future.

We can help. We are happy to give Ontario-based organizations a complimentary scan of their by-laws to check for compliance issues. If we find any, we can work with your organization to plan a path to compliance – and also help you transition (if you have not done so already).

You can contact Steve Indig at sindig@sportlaw.ca or Kevin Lawrie at klawrie@sportlaw.ca.