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The Act has targeted on July 1, 2013 as the effective date to help make Ontario Not-For-Profit Corporations (NPO) more efficient and effective in their operations and governance.
NPOs can engage in profit-oriented activities if the revenue is clearly re-invested to advance one or more of the not-for-profit organization’s purposes.
Certain exemptions from audit or review engagement requirement are available to Public Benefit Corporations defined as an charities receiving more than $10,000 in a fiscal year from donations and gifts from non-members, non-directors/officers/employees OR not-for-profit organizations that receive more than $10,000 from grants (either federal, provincial or municipal) in a fiscal year.
Conditions for audit and review exemptions for Public Benefit Corporations if:
• Annual revenue is less than or equal to 100K, the NFP can waive both audit/review with an extraordinary resolution
• Annual revenue is between 100K and 500K can waive audit and have a review engagement by extraordinary resolution
• Revenue in excess of 500K, an audit is still mandatory.
An extraordinary resolution is an approval from at least 80% of member votes.
Other not for profits (non-public benefit corporations) if:
• Annual revenue is greater than 500K, an audit can be waived and a review engagement by extraordinary resolution
• Annual revenue is less than 500K the association can waive both audit/review with an extraordinary resolution;
Non-voting members will now have limited voting rights on a few issues including:
• Making certain changes that affect a class of member
• Joining or amalgamating corporations
• Selling, leasing or exchanging all or most of the corporation’s property
• Continuing to operate in another jurisdiction
There is a minimum of 3 directors that are required under the Ontario Not-For-Profit Corporations Act. For Public Benefit Corporations, 2/3 of the directors must not be employees of the corporation or any of its affiliates.