Summary Policy

Date
September 3, 2003 (Revised September 13, 2005)

Reference Number
CSP - D15

Key Words
Dissolution clause

Policy Statement

Under the Income Tax Act, a registered charity can only transfer funds to an eligible donee (e.g., a registered charity) upon its dissolution. Therefore, a registered charity's governing documents should include a clause to the effect that upon winding up or dissolution, all its remaining assets after payment of its debts will be distributed to one or more eligible donees.

References

• Eligible Donee, CSP-E09.
• Governing Document, CSP - G06.
• Qualified Donee, CSP - Q01.
• Revocation, CSP - R12.
• Registering a Charity for Income Tax Purposes, T4063.
• Income Tax Act, R.S.C. 1985 (5^th supp.) c. 1, ss. 149.1(1) to (4), 188(1.1) and (1.3).