On October 19, 2021, Ontario introduced two significant changes to modernize Ontario business: the coming into force of the Not-for-Profit Corporations Act, 2010 and the launch of the Ontario Business Registry.
Ontario’s Not-for-Profit Corporations Act, 2010 Now In Force
Ontario’s Not-for-Profit Corporations Act, 2010, has come into force despite receiving royal assent ten years ago. This Act finalizes a significant transition to a new statutory framework for not-for-profit entities in Ontario, which were previously governed by the province’s Corporations Act. The Not-for-Profit Corporations Act, 2010 includes:
- a more straightforward incorporation process
- clarified rules for governing a corporation with increased accountability
- a clarification that not-for-profit corporations can earn a “profit” through commercial activities (for example, selling T-shirts) so long as these profits are reinvested to support the corporation’s stated not-for-profit purposes
- provisions to allow certain corporations to use an alternative process known as a “review engagement” in place of an audit
- enhanced members’ rights and proposed actions they can take if they believe directors and officers are not acting in the corporation’s best interests
- greater access to financial records for corporation members
Notably, under the Not-for-Profit Corporations Act, 2010, a non-profit’s letters patent will become its articles; however, it will be required to update its by-law and articles to comply with the new regime. The Act includes a transition period of three years to 2024 to allow non-profits to make the necessary changes.
The Act’s template organizational by-law sets out the rules for how a corporation should be managing its affairs, including those governing such activities as board meetings and elections. These default by-laws apply automatically to any Ontario not-for-profit that does not opt to pass its own by-law within 60 days following its incorporation.
Ontario Business Registry Launched
Last month also marked the launch of the new Ontario Business Registry. The Registry makes an array of government services available online to businesses and aims to streamline red tape and lower costs for businesses.
Many business services now available online
As an online system, the Ontario Business Registry allows businesses (including not-for-profit corporations) to file forms and notices through the Registry’s website 24 hours a day, 365 days a year. This replaces the need to visit a Service Ontario location in person or send documents via regular mail. All businesses and not-for-profits that are incorporated, registered, licensed or declared in Ontario will have an online profile in the new Registry system.
Users can access the Ontario Business Registry to complete over 90 transactions that previously required paper or fax filing and took between four to six weeks to complete, including:
- information updates for Ontario corporations on record with the Ministry of Government and Consumer Services
- incorporation of a new Ontario business corporation
- conversion of a corporation from another jurisdiction into an Ontario business corporation
- incorporation of an Ontario not-for-profit corporation
- dissolution of an existing business
- registration of a business name for a sole proprietorship
- registration of a business name for a partnership
Filings are instantaneous, and transaction receipts are sent via email. Businesses may also use the Ontario Business Registry to receive automatic email reminders of upcoming filing deadlines.
Additionally, the Registry allows anyone to do a free search to obtain basic information about a business or not-for-profit corporation, including a corporation’s full name, corporation number, incorporation date, type of corporation, status, governing jurisdiction and registered or head office address.
Changes To Corporations Information Act Annual Return Process
Previously, Ontario corporations were required to file a Corporations Information Act Annual Return (“CIA Return”) and their T2 Tax Returns with the Canada Revenue Agency. CIA Returns were generally filed by accountants but could also be filed in a paper format directly with the Ministry of Government and Consumer Services or electronically through an authorized third-party service provider. With the launch of the Ontario Business Registry, Ontario corporations will no longer file CIA Returns through the Canada Revenue Agency and is now required to file annual returns directly with Ministry through the Registry or an authorized third-party service provider.
Note that every Ontario corporation (with few exceptions through regulations) must file an Annual Return each year. Corporations with share capital are required to file Annual Returns within six months of their tax year-end. Corporations without share capital are required to file Annual Returns within 60 days of their anniversary date of incorporation, amalgamation, or continuance.
As always, in addition to updating information and annual filing requirements, most corporations have certain additional compliance obligations, including holding an annual general meeting, preparing and approving certain financial statements, and electing company directors and officers.
Under the new Ontario Business Registry, each business or not-for-profit corporation is assigned a unique number called a “company key.” The company key is required to make changes to the business’s records with the Ministry.
The keyholder should keep it confidential and only share it with an authorized service provider or an intermediary, such as a law or accounting firm. The company key will be sent to the official e-mail address of the business at the time a new business is registered, while owners of existing businesses are encouraged to sign up on the Ontario Business Registry website to obtain a company key.
Although the Ontario Business Registry is not yet available to intermediaries such as law and accounting firms, the Ontario government has stated it will be working with these intermediaries to integrate them into the system in the future. In the interim, businesses may choose to grant such intermediaries access to file documents on their behalf by sharing their company key.
Contact Tierney Stauffer LLP in Ottawa, Eastern Ontario and North Bay for Corporate Law Services
At Tierney Stauffer LLP, we are committed to providing comprehensive, forward-thinking and practical advice to our corporate clients, no matter the size of the operation. Our lawyers have extensive experience in all business law matters, from real estate to licensing and business succession. Call us at 1-888-799-8057 or contact us online to arrange a consultation with an experienced business lawyer.