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Not-for-Profit Info-GuideLast Verified:
2006-05-05
The following document was prepared by the Canada-Ontario Business Service Centre (COBSC), a single point of access to information on federal and provincial government programs, services and regulations. It is designed to assist in navigating through federal and provincial government programs, services and resources that may be of interest to those involved, or wishing to become involved, in Ontario's social economy. Although many questions will be answered in this guide, the list of resources given here is not exhaustive. Need more information? Click: Canada-Ontario Business Service Centre Some of the organizations listed below are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages. TABLE OF CONTENTS1. Definition of a Not-for-Profit OrganizationNot-for-profit organizations are created to benefit the community. Activities of a not-for-profit organization may be of a patriotic, national, charitable, philanthropic, religious, professional, or athletic nature without monetary gain. Directors, officers and/or members of a not-for-profit corporation do not own the corporation or its assets. The organization may not be operated for financial gain for its members, officers or directors. In certain circumstances a not-for-profit organization may engage in revenue producing activities and earn a profit, however these activities are to be conducted solely to further the principal objectives of the organization. For example, a not-for-profit theatre club may hold a bake sale to raise money, which would then be used to buy costumes for the club. 2. Choosing a Legal StructureLegal Professional ServicesAs there are a number of legal issues involved in selecting a legal structure for a not-for-profit organization, it may be important to contact a lawyer. The Law Society of Upper Canada offers a Lawyer Referral Service. For a nominal fee, one can receive a referral to a lawyer, and a free legal consultation of up to a half hour. For further information: Possible Structures for a Not-for-Profit OrganizationNot-for-profit groups can organize in a variety of methods. It is important to contact legal professional services when deciding on the structure most suited to the organizations' planned activities. Generally, the three main methods of creating a not-for-profit organization include:
More information regarding these structures can be found in sections 3 and 4 of this document. It is possible for a not-for-profit organization to operate under a name without any form of registration. Such an organization may, however, have difficulty entering a number of common business transactions including banking services, signing leases and entering into other types of contracts. Questions regarding this type of not-for-profit structure and any legal documentation that may be required when creating this type of organization, should be addressed to legal counsel. 3. Incorporating a Not-for-Profit IncorporationA not-for-profit organization can be incorporated at either the federal or provincial level. There must be a fixed number of directors, not fewer than 3, and each director must be at least 18 years of age. Ontario Not-for-Profit IncorporationUnder the Ontario Corporations Act (CA), individuals who wish to incorporate a not-for-profit corporation at the Ontario level must submit a number of documents to the Companies and Personal Property Security Branch of the Ontario Ministry of Government Services (MGS). For further information: Ontario Reporting Requirements For further information: Federal Not-for-Profit IncorporationFederal incorporation affords corporations heightened name protection, second only to trademark protection. This means they can carry out their activities across Canada under their name. Not-for-profit organizations are incorporated at the federal level under the Canada Corporations Act- Part II. This includes both charitable corporations and membership corporations, such as social, professional or fraternal organizations. For further information: Annual SummaryOnce incorporated, a not-for-profit corporation must file an Annual Summary with the Corporations Canada, on or before June 1st of each year, containing information relating to the year ending March 31st. For further information: 4. CooperativesA co-operative is owned by an association of persons seeking to satisfy common needs (access to products or services, sale of their products or services, employment, etc.). This association includes one or more kinds of users or stakeholders in the enterprise, such as:
Co-operatives operate democratically (one person, one vote) through two bodies: general meetings of the members or delegates, and the board of directors, at least two-thirds of whom are members elected at a general meeting. The delegate structure may reflect the size of the organization or the distance covered by the co-operative and include more than one delegate for each organization or territory represented. The co-operative's start-up capital usually comes from co-operative shares purchased by members. Federal co-operatives, however, can raise capital by issuing investment shares to members or non-members. For further information: 5. Charitable StatusCanadians may receive tax relief for contributing to organizations that have charitable status. Generally, organizations with the primary purpose of benefiting the community as a whole (for example, the relief of poverty, advancement of religious instruction for the public good, advancement of education, animal welfare, etc.) may apply for charitable status. The Charities Directorate of the Canada Revenue Agency (CRA) is responsible for charities under the Income Tax Act . It reviews applications for charitable registration, processes charities annual financial returns, provides technical advice to registered charities and the public, and monitors charities to ensure ongoing compliance with the law. The Canada Revenue Agency (CRA) registers qualifying organizations as charities, gives technical advice on operating a charity and handles audit and compliance activities. Registered charities are required to file an annual return with the CRA, a portion of which is available to the public, and must meet certain requirements of the Income Tax Act concerning their expenditures and activities. More than 80 000 registered charities operate in Canada, in areas such as welfare, health, education and religion. For further information: 6. FundingWhile the options listed below do not cover all possible sources, they may assist in searching for possible funding: The Trillium Foundation For further information:
Canada Foundation for Innovation For further information:
Northern Ontario Development Program For further information:
Museums Assistance Program For further information:
Moving on Sustainable Transportation Program - MOST For further information:
Endangered Species Recovery Fund (ESRF) For further information: Municipal Governments For further information: Foundation Directories and other publications Other Not-for-profit Agencies 7. TaxationIn this section, you will find information and links to a variety of tax-related topics of interest to those involved in the not-for-profit sector. Non-profit Organization - NPO - Information ReturnNon-profit Organization - NPO - Information ReturnAs required by subsection 149(12) of the Income Tax Act, a Not-for-Profit Organization may have to file an Information Return. Once an organization has filed this information return, it has to keep filing, for as long as it remains an NPO, regardless of the dollar value of its revenues or the book value of its assets. For further information: GST/HST Rebates for Public Service BodiesMany goods and services provided by public service bodies are exempt from GST. These bodies can get back some of the GST they paid on items they used either to make the goods or to provide the services. For further information: 8. Personal Information ProtectionPersonal Information Protection - Privacy Commissioner of Canada For further information: 9. Other resources
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