Category: Northfield News

What Are the rights and responsibilities of members in a Not-For-Profit Corporation under ONCA?

Understanding the rights and responsibilities of members in a not-for-profit corporation under the Ontario Not-for-Profit Corporations Act (ONCA) is essential for anyone involved in these organisations.

Members can participate in meetings, vote on key issues, access important documents, and hold directors accountable. They must also support the organisation’s integrity and pay any dues set by the board.

These rights let members influence the corporation’s direction and keep things transparent. Members must respect boundaries, such as not attending director meetings, and support good governance.

Knowing these points helps us engage effectively and protect the organisation’s mission and trust.

When we understand ONCA’s rules, we can take part in decision-making and set clear standards for ourselves and the board.

This knowledge empowers us to contribute meaningfully and safeguard the corporation’s future.

Understanding Not-For-Profit Corporations and ONCA

Not-for-profit corporations serve public or community benefits, not private profit. Ontario’s Not-for-Profit Corporations Act (ONCA) sets rules for how these organisations are formed, governed, and held accountable.

ONCA affects members’ rights and responsibilities and sets governance standards across the sector.

Definition of Not-For-Profit Corporations

A not-for-profit corporation is set up to pursue goals other than profit. These organisations focus on social, charitable, educational, or community activities.

They reinvest surplus funds into their mission instead of giving earnings to members or directors.

In Ontario, not-for-profit corporations do not have share capital and do not issue shares. Members may have voting rights but are not owners who receive dividends.

This structure supports the public interest and promotes transparency in managing resources.

Scope and Applicability of ONCA

ONCA applies to Ontario-based not-for-profit corporations incorporated under provincial law. It replaced the Ontario Corporations Act (OCA) for these entities on October 19, 2021.

The act covers incorporation, membership rules, directors’ powers, and financial reporting.

New corporations must follow ONCA, and existing corporations had to update their bylaws and governance to meet ONCA standards by specific deadlines.

ONCA’s rules promote accountability and modern governance by giving members clear rights to information and participation, while protecting directors and members from undue liability.

Comparison with Other Legislation

ONCA is different from the Canada Not-for-Profit Corporations Act (CNCA), which covers federally incorporated not-for-profits. ONCA focuses on Ontario corporations and offers regulations suited to the province.

Compared to the former Ontario Corporations Act, ONCA gives members stronger protections and clearer governance standards.

ONCA and CNCA both prohibit profit distribution to members, focusing on mission-driven governance. This helps maintain public trust in the not-for-profit sector.

Core Rights of Members under ONCA

Members have rights that shape how the organisation is run. These include voting on important matters, attending meetings, suggesting changes, and calling special meetings when needed.

Understanding these rights helps us influence our corporation’s direction.

Voting Entitlements and Resolutions

We can vote on key decisions affecting the corporation, such as by-law changes, electing directors, and approving major resolutions. ONCA requires at least one class of voting members in every corporation.

Votes happen at annual or special meetings, or sometimes by written resolution if allowed by the bylaws.

Voting rights and methods depend on the class of membership. Participating in votes is a main way we influence the organisation.

Meeting Attendance and Participation

We can attend general meetings and take part in discussions. Meetings let us hear reports, ask questions, and share our views.

Members cannot attend board meetings unless invited. This keeps director discussions private.

At meetings, we can speak and vote on motions. Staying informed about meeting schedules and materials helps us engage fully.

Proposing Amendments or Initiatives

We can propose amendments or new initiatives by submitting them to the board or membership. This ensures our ideas are heard.

ONCA provides a process for submitting proposals, which includes giving formal notice before meetings.

Proposals may involve by-law changes, membership rules, or strategic directions. By taking part, we help guide the corporation’s future.

Requesting Special Meetings

We can request a special meeting by submitting a formal written request to the board, supported by the required number of members.

Special meetings address urgent or important issues outside regular meetings.

ONCA sets rules for requesting and holding special meetings, including timing and notice. Using this right helps us keep governance strong.

Access to Information and Transparency

We have the right to access key documents that show how our corporation is run. This helps us hold the organization accountable.

Important records include corporate documents, financial reports, and lists of members or directors.

Right to Inspect Corporate Documents

We can inspect the corporation’s articles, by-laws, minutes, and resolutions during office hours. These documents show the rules and decisions of the corporation.

This right keeps us informed and ensures fair decision-making. We do not have access to directors’ meetings unless invited, and we must respect confidentiality.

We usually need to request documents in advance, following the corporation’s procedures. This keeps records managed properly while allowing member access.

Access to Financial Statements

We can view and get copies of the corporation’s annual financial statements. These reports show income, expenses, assets, and liabilities.

Access to financial statements is vital for transparency. It lets us see how funds are used and builds trust.

ONCA requires that these statements be available during regular office hours and provided promptly when requested. This helps us make informed decisions in meetings about finances.

Obtaining Member and Director Lists

We can request lists of current members and directors, but only for purposes related to the corporation’s affairs. We can use this information to influence voting, call meetings, or address concerns.

The corporation may set limits on how we use this information to protect privacy. We must use the lists only for proper activities.

This right helps us connect with other members and ensures leadership represents the membership. It also supports transparency by showing who is involved in running the corporation.

Key Responsibilities of Members

Members have duties that keep the organisation lawful and effective. We must follow the corporation’s rules, pay dues if required, and stay involved in governance.

These responsibilities protect both the organisation and its members.

Compliance with By-Laws and Articles

We must follow the corporation’s by-laws and articles, which set out how the organisation operates. Following them ensures fairness and legal compliance.

This means respecting processes like membership admission, voting, and meeting protocols. If we break these rules, we may face sanctions or lose membership.

Sticking to by-laws also prevents conflicts and misunderstandings. We need to stay informed about any changes to these documents.

Payment of Dues and Liabilities

We may need to pay annual dues or fees if the board requires it. Our financial contributions help the corporation operate.

Members are usually protected from personal liability for the corporation’s debts, but we must pay required dues to keep our membership.

These payments are not optional if the rules require them. Staying current with dues lets us keep our rights, such as voting and participating in meetings.

Participation in Corporate Governance

We have a responsibility to take part in governance. This includes attending meetings, voting, proposing ideas, and calling special meetings if needed.

Our participation shapes how the corporation is run and holds directors accountable.

By engaging, we help protect the organisation’s integrity and mission. We can also act if directors are not fulfilling their duties.

Members’ Influence on Fundamental Changes

Members play a direct role in big decisions that affect the not-for-profit corporation. These include approving changes to governing documents, taking part in reorganizations, and holding directors accountable.

Our rights let us shape the corporation’s future and protect its mission.

Approving Amendments to Articles or By-Laws

Members must approve key amendments to articles or by-laws. These changes can affect the corporation’s purpose, structure, or rules.

Approval needs a special resolution with at least two-thirds of voting members agreeing. This ensures major changes have broad support.

This process protects the corporation’s core principles and gives us a say in rule changes. We need access to meeting notices and documents to make informed choices.

Role in Major Restructuring or Winding Up

If the corporation faces major restructuring or winding up, members must approve the plan. These decisions can reshape or end the organisation.

We can vote on these issues and suggest alternatives. The board must provide full information before any steps are taken.

Initiating Removal of Directors

We can start the process to remove directors if needed. This begins by gathering support from other members and submitting a formal petition.

The right to remove a director keeps leadership accountable. ONCA outlines this process to make sure it stays fair and orderly.

Our roles and rights protect the corporation’s governance and identity. We take part in decisions that affect its direction and stability.

Enforcing Rights and Upholding Accountability

We must ensure our rights as members are respected and that the corporation acts honestly. There are ways to address problems and hold directors accountable when needed.

These steps help maintain trust and transparency in our organization.

Filing Complaints and Seeking Compliance

We can file complaints if the corporation does not follow ONCA or its own rules. This starts with a formal request for compliance, asking the board to fix the problem.

If the board ignores the complaint, we can gather support and propose a resolution at a meeting.

Complaints often focus on misuse of funds, failure to share financial statements, or breaking by-laws. Our goal is to keep directors responsible and the corporation accountable.

Court Applications and Investigations

When internal processes do not resolve issues, members can apply to the court under ONCA. This legal step allows members to request investigations into the corporation’s management or remove directors who do not fulfill their duties.

Court involvement is serious. Members can ask a judge to order compliance or even wind up the corporation.

We must prepare clear evidence to support the application. These tools protect our interests and help uphold the corporation’s integrity when other methods fail.

Conclusion

Contact Northfield & Associates for guidance on your rights and responsibilities as a member of a not-for-profit corporation under ONCA. Our team can help answer your questions and ensure your organisation follows the right procedures.

Working with us gives you access to expert advice on member participation, transparency, and corporate integrity.

At Northfield & Associates our expert teams guidance on compliance requirements. Our team understands Canadian charity law and can help ensure your organisation follows proper procedures.

Get professional support today by email at info@northfield.biz, by phone at (416) 317-6806, or visit us or Schedule your free consultation to discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

Our experts are here to guide you every step of the way. Your peace of mind is our priority. Let us simplify your ONCA journey!

Frequently Asked Questions

Members in a not-for-profit corporation under ONCA have important rights and duties. They hold powers such as participating in meetings and accessing records, along with responsibilities to support corporate integrity.

Who are members of a not for profit?

Members are individuals or entities admitted to the corporation according to its bylaws or articles. The corporation formally recognizes their membership status.

What does it mean to be a member of a corporation?

Members have certain legal rights and duties within the corporation. They can influence decisions through voting and proposals, but cannot attend board meetings.

What rights do members of a not-for-profit corporation have under ONCA?

Members can attend and vote at meetings, propose ideas, request meetings, and use different voting methods. They also have rights to receive corporate documents and financial reports.

Can members call a meeting under ONCA?

Yes, members can ask the board to convene a meeting. This usually requires a formal request or petition as set by the corporation’s rules and ONCA provisions.

Do members have the right to inspect nonprofit financial records?

Members can access key documents like financial statements, minutes, and member lists during office hours. This promotes transparency and accountability.

What responsibilities do members have in a nonprofit corporation?

Members should participate actively and uphold the corporation’s integrity.

They may need to pay dues if the board sets them.

Members can act if they believe the corporation is not following its rules.

How Can Members Remove Directors Under ONCA?

In Ontario, nonprofit organizations are governed by the Ontario Nonprofit Corporations Act (ONCA). Recently, ONCA introduced significant changes to how directors can be removed by members. This shift has important implications for how nonprofits operate in the province. Let’s explore these changes in detail and understand their significance.

The Change: Simpler Majority to Remove Directors

Old Rule: Previously, under ONCA, if members of a nonprofit wanted to remove a sitting director, they often needed a two-thirds majority vote. This high threshold was set by the organization’s bylaws or articles of incorporation.
New Rule: Now, under ONCA, members can remove a director with just a simple majority (51 percent) vote during a members’ meeting. This change means that it’s easier for members to hold directors accountable and make changes to the board.

Why This Change Matters

Accountability to Members: Directors of a nonprofit are accountable to the members. They make crucial decisions that affect the direction and success of the organization. By lowering the voting threshold to a simple majority, members now have a stronger voice in who represents them on the board.
Updating Governing Documents: Nonprofits must ensure their governing documents, such as bylaws and articles of incorporation, reflect this change. If these documents still require a two-thirds majority to remove a director, they are outdated and could wrongly prevent members from exercising their rights.
Empowering Stakeholders: This shift empowers stakeholders, giving them more control and ensuring that the board represents the current will of the members. It also encourages directors to remain accountable and responsive to the needs and concerns of the membership.

Steps Nonprofits Should Take

1. Review and Update Governing Documents: Nonprofits should immediately review their bylaws and articles of incorporation. Any provisions requiring more than a simple majority to remove a director should be updated to comply with the new rule under ONCA.

2. Educate Members: It’s essential to inform members about their rights and the new process for removing directors. Clear communication ensures that all members understand how they can participate in governance.

3. Regularly Schedule Member Meetings: Frequent and regular member meetings provide opportunities for members to discuss and vote on important issues, including the removal of directors if necessary.

4. Encourage Active Participation: Nonprofits should encourage active participation from their members. When members are engaged and informed, they can better exercise their rights and contribute to the organization’s success.‍

The ability to remove directors with a 51 percent vote is a significant change in nonprofit governance under ONCA. It simplifies the process, enhances accountability, and ensures that the board remains responsive to the members’ needs. Nonprofits must update their governing documents and educate their members to align with this new rule. By doing so, they can strengthen their governance practices and ensure that their organization operates effectively and democratically.

Legal Framework for Member Removal of Directors Under ONCA

ONCA sets specific rules for how members can remove directors from nonprofit boards. The Act creates different requirements for various types of organizations and defines clear roles for members, directors, and officers in the process.

Overview of the Ontario Not-for-Profit Corporations Act

ONCA replaced the previous Corporations Act in Ontario. It provides clear rules for how nonprofits must operate.

The Act applies to all not-for-profit corporations in Ontario, including charities and other nonprofit organizations. Members have specific rights to remove directors, and the Act sets minimum standards organizations must follow.

Key ONCA provisions include:

• Simple majority voting for director removal
• Mandatory member meeting procedures
• Protection for certain types of directors
• Requirements for proper notice

Organizations cannot create bylaws that make director removal harder than ONCA requires. They can, however, add extra protections for members during the process.

ONCA also sets different rules for ex officio directors. These directors often cannot be removed through the standard member vote process.

Key Definitions: Members, Directors, and Officers

Members are individuals with voting rights in the organization. They elect directors and can vote on important matters like director removal.

Only voting members can participate in director removal votes. Non-voting members cannot cast ballots in these decisions.

Directors serve on the board and make governance decisions. Members elect them, and directors are accountable to the members.

ONCA distinguishes between regular directors and ex officio directors. Ex officio directors hold their position because of another role they have.

Officers are appointed by directors to handle specific duties. Common officer positions include president, secretary, and treasurer.

Role	Selection Method	Can Be Removed By Members
Voting Members	Membership process	N/A
Regular Directors	Member election	Yes (simple majority)
Ex Officio Directors	Automatic by position	Usually no
Officers	Board appointment	No (removed by board)

Differences Between Nonprofit and Charity Requirements

All organizations under ONCA follow the same basic director removal rules. Both charities and other nonprofits must allow simple majority voting.

Charities have additional considerations:

• Must maintain charitable purposes
• Subject to Canada Revenue Agency oversight
• May have specific director qualifications

Some charities receive extra government funding and might have additional accountability requirements in their funding agreements.

Registered charities must also follow federal charity law. This can create extra steps when removing directors who have signing authority with CRA.

Both charity and nonprofit bylaws must align with ONCA requirements. Organizations cannot create bylaws that prevent members from exercising their removal rights.

The voting threshold remains the same regardless of organization type. Members need 50% plus one vote to remove a director at a properly called meeting.

Membership Rights and the Role in Director Removal

Under ONCA, different member classes hold specific voting rights that directly affect director removal procedures. The membership structure and quorum requirements determine how effectively members can exercise their removal powers.

Member Classes and Voting Rights

Only voting members can participate in director removal under ONCA. Non-voting members cannot vote on these matters, even if they attend meetings.

Different membership classes may have specific rights to elect certain directors. Only that class can remove the directors they elected.

For example, if Class A members elect three directors, only Class A members can vote to remove those specific directors. Class B members cannot participate in removing Class A’s elected directors.

Ex officio directors are exempt from member removal procedures. These directors serve because of their position or role, not through member election.

The bylaws must clearly define which member classes exist and their specific voting rights. This prevents confusion during removal procedures.

Quorum and Voting Requirements

Members need a simple majority vote (51%) to remove a director at a properly called meeting. This is called an ordinary resolution under ONCA.

A valid quorum must be present before any voting can occur. The bylaws typically set the quorum requirements for member meetings.

Members must convene a special meeting specifically for director removal. Regular annual meetings can also address removal if properly noticed.

The meeting notice must clearly state that director removal will be discussed. Members need adequate time to prepare and attend.

Voting can happen in person, by proxy, or through other methods allowed in the bylaws.

How Membership Structure Impacts Removal Procedures

Large membership organizations face different challenges than smaller ones. Getting enough members to attend and reach quorum becomes more difficult as organizations grow.

Organizations with multiple member classes must track which members can vote on specific director removals. This requires clear record-keeping and proper meeting procedures.

Single-class membership structures simplify the removal process. All voting members participate equally in director removal decisions.

The geographic spread of members affects meeting logistics. Organizations may need to use electronic voting or proxy arrangements.

Membership fees and engagement levels influence participation rates. Active, engaged members are more likely to participate in governance decisions like director removal.

Procedural Steps for Removing Directors Under ONCA

The removal process requires careful attention to bylaw requirements and proper notice procedures. Members must follow specific steps to ensure the removal vote is valid and legally binding.

Reviewing and Applying Bylaw Provisions

We must first examine our organization’s bylaws to understand the specific procedures for director removal. Under ONCA, members can remove directors with a simple majority vote through an ordinary resolution.

Our bylaws may contain additional requirements beyond ONCA’s basic rules. These could include specific notice periods or meeting procedures we need to follow.

If our bylaws still require a two-thirds majority for removal, they conflict with ONCA’s current provisions. We should update these outdated clauses to reflect the new simple majority standard.

Key bylaw elements to review:

• Notice requirements for special meetings
• Quorum requirements for member votes
• Voting procedures and eligibility rules
• Any specific removal provisions

Tools like CLEO’s Bylaw Builder can help us create compliant bylaws that align with ONCA requirements.

Initiating a Removal Process

We can start the removal process through a member proposal or by calling a special meeting. Any voting member typically has the right to propose director removal.

The proposal must clearly identify which director we want to remove. We cannot remove ex officio directors through this process since their positions depend on holding other offices.

Only members from classes that elected specific directors can vote to remove those directors. This rule protects the voting rights of different member groups.

We should document our reasons for removal, though ONCA doesn’t require us to prove cause. The simple majority vote is enough for removal.

Notice of Meeting and Proposal Requirements

We must provide proper written notice to all voting members before the meeting. The notice period depends on our bylaws but typically ranges from 10 to 21 days.

The notice must include:

• Meeting date, time, and location
• Clear statement about the director removal proposal
• Name of the director facing removal
• How members can participate or vote

We should send notices by methods specified in our bylaws, such as mail, email, or posting on our website.

The notice gives members time to consider the proposal and attend the meeting. Proper notice protects the democratic process and ensures validity.

Conducting the Member Vote for Removal

We must ensure quorum is present before conducting the removal vote. Our bylaws specify the minimum number of members needed for valid decisions.

The vote requires a simple majority of voting members present. We can conduct voting by show of hands, written ballot, or electronic means as permitted by our bylaws.

We should record the vote results in our meeting minutes. This creates an official record of the decision and the voting outcome.

After a successful removal vote, we must file updated director information with the Ontario Business Registry within 60 days. We also need to update our internal corporate records immediately.

The removed director’s term ends immediately after the successful vote. We can then appoint or elect a replacement director according to our bylaws.

Special Considerations for Charities and Public Benefit Corporations

Registered charities and public benefit corporations face additional rules when removing directors. These organizations must follow extra steps and may need approval from government bodies.

Unique Rules for Registered Charities

Registered charities must notify the Canada Revenue Agency (CRA) when directors change. We need to update our charity information return within six months of any director removal.

The CRA requires that charity directors meet specific qualifications. All directors must be eligible under the Income Tax Act.

• Under 18 years old
• Convicted of certain criminal offences
• Previously involved with charities that lost their status

We must also ensure our charity maintains the minimum number of directors required by our governing documents. Most charities need at least three directors to operate legally.

Important: If we remove too many directors at once, our charity might not have enough people to make decisions. This could harm our charitable status with the CRA.

Employee Directors and Public Benefit Corporation Limits

Public benefit corporations have strict rules about employee directors. No more than one-third of our directors can be employees of the corporation.

This rule affects director removal in important ways:

• We cannot remove non-employee directors if it would make employee directors exceed the one-third limit
• We might need to remove employee directors first before removing other directors
• We must plan director changes carefully to stay within the legal limits

Employee directors include anyone who receives regular pay from our organization. This covers full-time staff, part-time workers, and contractors with ongoing relationships.

Engaging with the Public Guardian and Trustee

Some charities must involve the Public Guardian and Trustee (PGT) when removing directors. This applies mainly to charities that receive government funding or hold public trust property.

We must notify the PGT before removing directors if:

• Our charity manages funds for vulnerable people
• We hold property in trust for the public
• Our governing documents require PGT approval

The PGT may review our reasons for director removal. They want to ensure we protect charitable assets and serve the public interest properly.

Timeline matters: PGT reviews can take several weeks. We should contact them early in the removal process to avoid delays.

Corporate Governance and Director Removal Best Practices

When removing directors under ONCA, organizations must address conflicts of interest, maintain proper documentation, and complete required government filings. These practices protect the organization and ensure compliance with Ontario regulations.

Conflicts of Interest and Compliance Obligations

Directors facing removal cannot vote on their own removal. This creates an automatic conflict of interest under ONCA governance rules.

We must ensure the director steps away from all board discussions about their removal. They cannot participate in any votes or decisions related to the removal process.

Officers who are also directors face additional considerations. If we remove a director who holds an officer position, we need to address both roles separately.

The organization must follow its conflict of interest policy during removal proceedings. We should document that proper conflict procedures were followed.

Board members must act in good faith when considering director removal. Personal disputes cannot be the primary reason for removal under corporate governance standards.

We need to review our bylaws for specific conflict requirements. Some organizations have stricter rules than the basic ONCA requirements.

Documenting and Reporting Director Removal

Meeting minutes must record the removal resolution clearly. We need to include the exact vote count and the specific reasons for removal.

The minutes should show that proper notice was given to members. We must document that the meeting followed ONCA procedures.

We need to record which members voted and verify their voting rights. Not all members may have the right to remove specific directors.

The organization should keep copies of all removal notices and communications. This documentation protects us if someone later challenges the removal.

Financial records may need updates if the removed director had signing authority. We must change bank signatures and other financial controls immediately.

Board resolutions should formally accept the director’s removal. This creates a clear corporate record of the governance change.

Government Filings and Registry Updates

We must file director changes with the Ontario government within 15 days of the removal. The corporate registry needs current director information.

Form 1 (Initial Return/Notice of Change) reports director changes to Corporations Canada. We need to submit this form with the required fees.

The organization’s registered office must update its records. Corporate books need to reflect the new board composition accurately.

We should update all public directories and websites that list directors. This includes charity databases and professional associations.

Banking relationships require immediate attention. Financial institutions need updated director information and new signing authorities.

Professional advisors like lawyers and accountants should receive notice of director changes. This ensures they communicate with the correct board members going forward.

After Removal: Board Reconstitution and Membership Impacts

When members remove directors under ONCA, organizations must address immediate vacancy concerns. The removal may also affect board composition and member relationships.

Vacancy and Appointment of New Directors

The removal of a director creates an immediate vacancy on the board. Organizations must first determine if the remaining directors still meet quorum requirements.

Quorum Assessment

Most governing documents specify the minimum number of directors needed for a quorum. If the removal drops the board below this threshold, normal board operations cannot continue.

When quorum is lost, the organization must call a members’ meeting. This meeting serves to elect new directors and restore proper board function.

Appointment Process

Organizations have several options for filling vacancies:

• Members’ meeting election – The most common approach
• Board appointment – If permitted by bylaws and quorum exists
• Emergency provisions – Some bylaws allow temporary appointments

The bylaws typically outline procedures for each method. Organizations should review these requirements before filling vacancies.

Timeline Considerations

We recommend acting quickly to fill vacancies. Long periods without proper board composition can affect decision-making and compliance.

• Decision-making authority
• Legal compliance obligations
• Operational continuity

Effect on Board of Directors and Membership

Director removal impacts both board dynamics and member relationships. These changes require careful management to maintain stability.

Board Composition Changes

Removing directors can shift the balance of expertise and perspectives on the board. Organizations may lose valuable skills or institutional knowledge.

The remaining directors might need to redistribute responsibilities. Committee assignments and leadership roles may require adjustment.

Member Relations

The removal process can create divisions within the membership. Some members may support the decision while others oppose it.

Organizations should focus on rebuilding unity after contentious removals. Clear communication about reasons for removal helps maintain member confidence.

Governance Continuity

New directors require orientation and training. They need to understand:

• Organizational history and culture
• Current strategic priorities
• Legal and fiduciary responsibilities
• Board policies and procedures

Considerations in Case of Dissolution

Although not directly caused by director removal, organizations facing governance challenges may consider dissolution.

Dissolution Triggers

Several factors might lead to dissolution discussions:

• Inability to maintain minimum director requirements
• Loss of member confidence in governance
• Ongoing conflicts that prevent effective operations

Legal Requirements

ONCA sets specific requirements for dissolution. Members must pass a special resolution with detailed procedures for:

• Asset distribution
• Creditor notification
• Regulatory compliance

Alternative Solutions

Before considering dissolution, organizations can explore other options:

• Restructuring board composition
• Revising governance documents
• Implementing conflict resolution processes
• Seeking external mediation

These alternatives may address underlying issues without ending the organization.

Transitioning and Updating Bylaws for ONCA Compliance

Nonprofits must review their current governing documents and update them to meet ONCA’s new requirements. The new rules include the simple majority rule for director removal.

Organizations can use CLEO’s Bylaw Builder to make these changes. Nonprofits must complete their transition within the required timeline.

Reviewing Existing Governing Documents

We need to examine our current bylaws and articles of incorporation to find sections that conflict with ONCA. Many older documents require a two-thirds majority vote to remove directors. Under ONCA, this must change to a simple majority.

Our bylaws cannot override ONCA’s requirement for a 50% + 1 vote. Any provision stating a higher threshold is invalid and must be updated.

We should also check for other outdated sections. These might include membership definitions, meeting procedures, and director appointment processes.

Key areas to review:

• Director removal procedures
• Voting thresholds for member decisions
• Membership class definitions
• Meeting notice requirements
• Officer appointment rules

Document all needed changes before starting the amendment process. This helps us avoid multiple rounds of government filings.

Making Amendments and Using CLEO’s Bylaw Builder

CLEO’s Bylaw Builder provides templates and guidance for ONCA-compliant bylaws. This free online tool helps us draft proper language that meets legal requirements.

We can use the Bylaw Builder to create new bylaws or modify existing ones. The tool includes standard clauses for director removal that comply with ONCA’s simple majority rule.

Steps for using the Bylaw Builder:

1. Access the tool through CLEO’s website
2. Select our organization type
3. Complete each section with our information
4. Review the generated bylaws carefully
5. Make any necessary customizations

Once we approve new bylaws, our board of directors must pass a resolution adopting them. The bylaws take effect immediately upon this board vote.

We must then present the new bylaws to our members at the next meeting for confirmation.

Timeline for Compliance with ONCA

Existing nonprofits have specific deadlines for ONCA compliance based on when they were incorporated. Organizations incorporated before October 2021 typically have until October 2024 to transition.

We must file our updated articles or letters patent with the government before our deadline. Late compliance can result in dissolution of our organization.

Timeline requirements:

• File updated governing documents before deadline
• Hold member meetings to confirm bylaw changes
• Update corporate records with new information
• Ensure all government filings are complete

Bylaw amendments become effective when our directors approve them. However, members can reject these changes at the next meeting if they disagree.

We should start the transition process early to avoid rushing important decisions. This gives us time to educate our members about the changes and address any concerns.

Conclusion

ONCA’s new director removal rules give nonprofit members real power to hold boards accountable. The simple majority vote requirement makes it easier for members to take action when needed.

Organizations must update their bylaws to reflect these changes. Members can now remove directors with just 51% support at a special meeting. This creates stronger democratic governance for Ontario nonprofits.

Ready to ensure your nonprofit complies with ONCA? 

Contact Northfield & Associates today for expert guidance on updating your governing documents. We help Ontario nonprofits navigate these important legal changes with confidence.

Get started now:

• Email us at info@northfield/contact/.biz
• Call (416) 317-6806
• Visit https://www.northfield.biz/
• Schedule a FREE consultation

Frequently Asked Questions

Under ONCA, members can remove directors with a simple majority vote at a special meeting. The process requires proper notice and follows specific rules that nonprofits must understand.

How can members remove a director?

Members can remove directors by passing an ordinary resolution at a special meeting. This requires a simple majority vote of 50% plus one.

Only voting members can participate in director removal. The bylaws cannot change this voting percentage requirement.

Ex officio directors cannot be removed through this process. Their positions are not subject to member removal under ONCA rules.

What are the grounds for the removal of a director?

ONCA does not specify particular grounds for removing a director. Members can vote to remove any director for any reason they see fit.

The decision belongs entirely to the voting members. They do not need to prove wrongdoing or provide specific justification.

This gives members broad power to ensure directors remain accountable. It allows them to make changes when they feel it serves the organization’s best interests.

How do you remove a director under the Corporation Act?

Under ONCA, members must call a special meeting for the purpose of removing a director. Proper notice must be given to all voting members.

The meeting notice should clearly state the intention to remove the specific director. This ensures members understand the meeting’s purpose.

During the meeting, members vote on an ordinary resolution to remove the director. The resolution passes with a simple majority of votes cast.

What is the procedure for removing a director?

First, identify which members have the right to vote on director removal. Only members who can elect specific directors can remove those same directors.

Next, call a special meeting according to your organization’s bylaws. Provide proper notice that includes the removal resolution.

Hold the meeting and vote on the ordinary resolution. Count the votes and announce the result based on a simple majority.

How can directors be removed from their positions?

Members can remove directors by voting at special meetings. This is the main method under ONCA for member-driven removal.

Directors can also resign by giving written notice. Some organizations allow removal through other rules in their governing documents.

The board or members choose when to fill the vacancy after removal. This timing depends on the organization’s needs and bylaws.

What is the step to remove a director?

The key step is to convene a special meeting of voting members.

This meeting must follow the notice requirements in your bylaws.

Members vote on an ordinary resolution to remove the director.

The resolution needs support from more than half of the votes cast.

After the vote, update your corporate records to show the director’s removal.

Notify relevant parties and start the process of filling the vacancy if needed.

Membership dues are a crucial aspect of not-for-profit corporations. According to Ontario’s Not-for-Profit Corporations Act (ONCA), Section 86 allows directors to establish and manage annual contributions or dues, subject to the company’s articles and by-laws. It means that directors have the flexibility to determine the amount of contributions and how they are collected.

In addition, aligning membership dues with an organization’s articles and by-laws is essential as it guides directors in establishing fair and reasonable dues. ONCA allows directors to decide the annual contribution amount and how it will be paid. This will enable organizations to tailor dues structures to their unique needs and members’ preferences. Clear communication about the rationale behind the dues, the benefits members receive, and the impact on the organization’s objectives fosters trust and understanding among members.

To stay in line with ONCA regulations, organizations should meticulously create and routinely assess their articles and by-laws, taking a proactive stance to avoid conflicts and guaranteeing that the legal structure oversees membership dues as outlined in ONCA’s Section 86; these dues serve as a means for financial sustainability for not-for-profit corporations.

At Northfield & Associates our expert teams guidance on compliance requirements. Our team understands Canadian charity law and can help ensure your organisation follows proper procedures.

Get professional support today by email at info@northfield.biz, by phone at (416) 317-6806, or visit us or Schedule your free consultation to discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

Ready for better nonprofit reporting?

At Northfield & Associates, we have a team of professional bookkeepers and accountants to help your organization manage the books so that you can breeze through tax season.

GET IN TOUCH

What We Do!

We’re often asked by prospective clients what our Bookkeeping Service covers?  People want to know what specific tasks we do, and what their responsibility is.  This brief explainer page will answer that question.  This is by no means an exhaustive list, but covers the most frequently asked questions.

Getting Started

• Review your existing books for needed corrections or back-work
• Chart of accounts setup or amendment
• Assistance with setting up bank feeds
• Limited assistance* with setting up payroll (QBO or Gusto only)
• Your books brought current and reconciled if needed

Ongoing Monthly Bookkeeping

• After-the-fact transaction recording
• Post to general ledger
• Post to other ledgers (as needed)
• Bank account reconciliation
• Monthly financial statements
• Other bookkeeping services, as required
• Best-practice bookkeeping advice and counsel

Year End

• Assistance with 1099-NEC preparation*
• Assistance with 1099-MISC preparation*
• Year-end financial statements and period-end closing

What We Don’t Do

Pay bills

We do not offer bill-pay services at this time, nor do we manage Accounts Payable (AP) or Accounts Receivable (AR).

Payroll tax responsibility

Our bookkeepers can assist you in setting up your initial payroll service in QBO or Gusto. We are not responsible for entering payroll hours/salary, accruing payroll taxes, nor the transmittal of payroll taxes to the IRS or the state.  Your full-service payroll provider (QBO, Gusto, or whatever other service a client uses) will be the responsible party for payroll and payroll tax compliance.

*Payroll deductions and benefits

We provide assistance with setting up a payroll account in either Quickbooks Online or Gusto, including entry of employee data.  We do not assist in state registrations, benefits, or advise on deductions.  Those service areas are provided directly by either QBO or Gusto.

Preparation of W2s

Similar to the last item, your full-service payroll provider (QBO/Gusto) is responsible for preparation of Form W2 for employees.

Sales tax reporting

For those nonprofits that sell taxable goods and/or services, your bookkeeper will assist in accounting for sales taxes collected and transmitted, but we do not prepare state sales tax reports.

Donation recording

We do not provide individual donation data entry into your neither your donor CRM nor Quickbooks Online, nor do we prepare year-end donor acknowledgements.

Administrative tasks

We cannot provide administrative services unrelated to our bookkeeping function.

Attend board meetings

Due to the constraints of time and distance, we are unable to be present, physically nor virtually, at a meeting of a client’s board of directors.*May incur additional fee per 1099-NEC or 1099-MISC.

Let’s Collaborate & Make a Difference!

Partner with us to amplify your mission. Whether it’s Charity accounting, financial transparency, or strategic growth—we’re here to help you create meaningful impact. Let’s work together to build a better future!

Book a Call

Contact us today to schedule your consultation.

Working with Our Firm

In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.

By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.

Book a Consultation with Northfield & Associates

Your Trusted Partner in International Bilateral Relations

At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.

Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.

Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.

Northfield & Associates

Advancing Global Partnerships, Together.

Take the First Step Today

If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.

Disclaimer: The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.

We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.

• If you or anybody that you know, think that you meet the requirements and wish to receive further information.
• We can help you start the application process and confirm eligibility requirements to participate.
• We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.

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About Northfield

Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.

Forward-Looking Information

This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.

This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.

Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.

Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

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NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.