The long-awaited Ontario Not-for-Profit Corporations Act, 2010 (the "ONCA") came into force on October 19, 2021. Under the ONCA, Ontario not-for-profit corporations that were previously governed under Ontario's Corporations Act (the "OCA") were given a three-year transition period, until October 2024, to amend their governing documents to comply with the ONCA.
Bill 91, Less Red Tape, Stronger Economy Act, 2023 (which received Royal Asset in June 2023) introduced amendments to the ONCA (the "Amendments") which came into force on October 1, 2023.
Below we have summarized six (6) key changes introduced by the Amendments. These changes fill gaps in the ONCA, allow members and directors to participate and vote more easily in electronic and hybrid meetings, and permit corporate records to be stored and shared digitally.
1. VIRTUAL MEETINGS OF DIRECTORS AND MEMBERS
The Amendments introduce new rules governing meetings held by telephonic or electronic means.
As a result of the Amendments, "telephonic or electronic means" is defined as "any means that uses the telephone or any other electronic or other technological means to transmit information or data, including telephone calls, voice mail, fax, email, an automated touch-tone telephone system, computer or computer networks."
Meetings of directors or members may now be held entirely by one or more telephonic or electronic means, or by any combination of in-person attendance and telephonic or electronic means, unless the by-laws provide otherwise. Any director or member attending a virtual meeting will be considered to be present at such a meeting.
When a meeting will be held by telephonic or electronic means, a meeting notice is not required to specify the place of the meeting. However, the meeting notice must include instructions for attending and participating by telephonic and electronic means.
Further, a members' meeting held by telephonic or electronic means must be held in a manner that allows all persons entitled to attend the meeting to participate reasonably and communicate adequately with each other throughout the meeting. A virtual meeting of members is deemed to have been held at the location of the corporation's registered office.
All persons attending a directors' meeting held by telephonic or electronic means must be able to communicate with each other simultaneously and instantaneously.
2. VOTING AT MEETINGS OF MEMBERS
In addition, the Amendments also change how members vote at meetings.
Unless the organization's articles or by-laws expressly provide otherwise, a vote may now be conducted entirely by one or more telephonic or electronic means or by a combination of one or more telephonic or electronic means and voting in person.
3. ADJOURNED MEETINGS
The Amendments change the notice requirements for adjourned meetings.
For a meeting of directors that continues an adjourned meeting, there is no required notice of a meeting if the following items are announced at the time of adjournment: (1) the time of the continued meeting, (2) if applicable, the place of the continued meeting, and (3) instructions for attending and participating by telephonic or electronic means.
If a meeting of the members is adjourned for a total of fewer than 30 days, no notice is necessary, unless the by-laws provide otherwise, if an announcement at the time of an adjournment states: (1) the time of the continued meeting, (2) if applicable, the place of the continued meeting, and (3) instructions for attending and participating by telephonic or electronic means.
4. CORPORATE RECORDS
The Amendments also help facilitate access to corporate records.
A corporation may, but is not required to, allow its corporate records to be inspected or examined remotely at any time by means of any technology and to permit copies or extracts to be made or taken by such means.
Additionally, the Amendments allow all required registers and other records to be in any form, provided that they are capable of being reproduced in an accurate and intelligible form within a reasonable time.
5. PROXIES
Any member's proxyholder may now demand a ballot at a meeting of members.
6. AUDIT COMMITTEE
A corporation may have an audit committee, and, if it does, one or more directors must now serve on the audit committee.
Despite this change, one rule remains in force: a majority of the committee must not be officers or employees of the corporation or of any of its affiliates.
CLOSING REMARKS
Corporations governed by the ONCA or the OCA should review their existing governing documents to ensure they comply with the Amendments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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