A not-for-profit corporation is a legal entity that is created under Canadian or Provincial laws. The not-for-profit corporation is formed for the purposes other than generating a profit to be distributed to its members, directors or officers. This makes not-for-profit corporations distinct from business corporations which are formed with the purpose of making a profit and distributing the profit to its shareholders.

Examples of a not-for-profit corporation can be a church, mosque, synagogue, school, charity, medical provider, activity club, volunteer organization, professional association, research institute, museum…etc.

Incorporation will provide the not-for-profit with a separate legal status from its members. This means that the not-for-profit will be able to enter into contracts, buy land, borrow money and have bank accounts in its own name.

Additionally, since the not-for-profit will be a separate legal entity from its members, it will be subject to limited liability, which means that the members will not be held personally liable for the debts of the corporation. Also, the organization will have a perpetual existence regardless of any membership changes. Finally, having a incorporate not-for-profit will prove advantageous when applying or receiving government grants in order to prove stability of the organization.

In order to determine the proper jurisdiction for your corporation, federal or provincial, ask yourself the following questions:

1. Where will my not-for-profit be conducting its activities? Will the activities be across Canada or provincial?
2. How important it is that the name and brand of my not-for-profit be protected across Canada?
3. What are the fees associated with incorporation and provincial registration of your not-for-profit?
4. Will the Corporate directors be Canadian residents?

By doing this analysis, we will be able to better assess which jurisdiction is best suited for your corporation.

No. A not-for-profit corporation and a charity are two different types of entities by law.

In order to obtain charity status and be able to emit tax receipts, your corporation has to apply to obtain a charity status at the Charities Directorate of Canada Revenue Agency.

Registered charities are charitable organizations, public or private foundations that are created in Canada. All charities in Canada have to have a charitable purposes that fall into one or more of the following categories:

• The relief of proverty
• The advancement of education
• The advancement of religion
• Other purposes that benefit the community

Not-for-Profit organizations are associations, clubs or societies that are not charities but rather are organized and operated exclusively for:

• Social welfare
• Civic improvement
• Pleasure
• Recreation, or
• Any other purpose except profit

Yes, under certain conditions, not-for-profit organizations can be eligible for a municipal tax exemption. For more information, please visit our municipal tax exemption page.