New Rules for Ontario Registered Not-for-Profit and Charitable Corporations

Posted
December 6, 2021
in

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.  

Public Benefit Corporation Distinction and Review/Audit Engagements

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:

  • Donations or gifts from people who are not members, directors, officers or employees of the corporation
  • Grants or similar financial assistance from federal, provincial, or municipal governments or government agencies

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 TypeAmount of Revenue per financial yearType of Financial Statement
Public Benefit Corporation$100,00 or lessWaive*
Public Benefit CorporationMore than$100,000 but less than $500,000Review engagement*
Public Benefit Corporation$500,000 or moreAudit
Non-Public Benefit Corporation$500,000 or lessWaive*
Non-Public Benefit CorporationMore than $500,000Review 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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