How does an Ontario not-for-profit corporation amalgamate with another nonprofit?
ONCA lets two or more Ontario not-for-profit corporations amalgamate and continue on as a single corporation, similar in structure to how business corporations amalgamate under the Business Corporations Act. Each corporation's directors must approve the amalgamation, and members of each corporation must then approve it by special resolution, typically requiring a two-thirds majority rather than a simple majority, reflecting how fundamental the change is.
Once approved, the corporations file articles of amalgamation, and the resulting corporation automatically takes on all the assets, liabilities, rights, and obligations of the two predecessor corporations — there is no need to separately transfer every contract or asset one by one. Members should be given a clear amalgamation agreement to review before voting, setting out how the combined corporation's name, purposes, membership structure, and board will work going forward.
If either corporation is a registered charity, the corporate amalgamation is only part of the picture — charitable registration does not automatically transfer to the new entity, and the organizations will need to coordinate the timing of the corporate amalgamation with the separate process for the resulting entity's charitable status so there is no gap in registration.
Key takeaways
- Amalgamation requires director approval from each corporation, then member approval by special resolution.
- The combined corporation automatically inherits both predecessors' assets, liabilities, and obligations.
- Members should see a clear amalgamation agreement before voting on it.
- Charitable registration doesn't transfer automatically and must be coordinated separately.