The Not-for-Profit Corporations Act is now in force, which introduces new guidelines for financial reporting as applicable to a not-for-profit corporation.
As of October 19, 2021, Ontario has updated the rules for not-for-profit corporations under the Not-for-Profit Corporations Act, 2010 (ONCA) which include a variety of changes to the incorporation process, increases accountability, provides members greater access to financial records and more.
In addition to the changes listed above, all Not-for-Profit and Charitable Corporations new financial reporting requirements which may necessitate a review or audit engagement for financial statements, depending on the type of corporation and its annual revenues. The ONCA now makes a distinction between public benefit corporations and other not-for-profit corporations. A public benefit corporation is a charitable corporation or non-charitable corporation that receives more than $10,000 per financial year in either:
After determining if a corporation is a public benefit corporation or a non-public benefit corporation, the amount of revenue per financial year determines what type of financial statement is required.
|Corporation Type||Amount of Revenue per financial year||Type of Financial Statement|
|Public Benefit Corporation||$100,00 or less||Waive*|
|Public Benefit Corporation||More than$100,000 but less than $500,000||Review engagement*|
|Public Benefit Corporation||$500,000 or more||Audit|
|Non-Public Benefit Corporation||$500,000 or less||Waive*|
|Non-Public Benefit Corporation||More than $500,000||Review engagement*|
*Approval to waive an audit or review engagement requires an extraordinary resolution, (approval from at least 80% of votes cast at a special members meeting where there are enough members to take a vote or if all voting members consent in writing.)
Previously, non-soliciting corporations with greater than $1 million in gross annual revenue and soliciting corporations with greater than $250,000 required an audit. Not-for-profit corporations with lower revenues could default to a review.
For additional information, visit this Ontario Government website.
Bateman MacKay LLP is here to help!
If you are unsure if these new changes impact your Not-for-Profit or Charitable Corporation and wish to review your financial reporting needs, please reach out to a Bateman MacKay Business Advisor.
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