Nonprofit Corporation Registration in Canada

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What are Nonprofit Corporations?

A nonprofit corporation is something separate from its business members, directors, and shareholders. It is a legal unit formed to generate a profit that will be distributed to its members, directors, or dividends. Nonprofit corporation registration in Canada does earn a profit, but instead of paying dividend membership, they have to use the profit to further the goals of the corporation. Under federal or provincial law, Nonprofit corporations are formed.

Nonprofit organisations include a church association, school, charity, activity clubs, volunteer service organization, etc. All nonprofit corporations should apply for charitable status to benefit from tax exemption and issue tax deduction receipts.

Why you should Incorporate a Nonprofit Corporation?

Before the Nonprofit corporation registration in Canada does not need to incorporate, although incorporating will give your corporation legal status. It depends on the Nonprofit corporation to incorporate or not depending on their activities, type of organization, or nature.

The legal system will recognize an incorporated association as having the rights and responsibilities of a legal entity. By incorporating an organization, you will be able to enter into contracts, buy land, borrow money, have bank accounts, etc, in its name.

There are many other advantages of incorporation

  • Limited liability of the members
  • If membership changes, then the continuity of the organization is also assured.
  • A corporation will own the property regardless of membership change
  • To bring legal action in one's own name
  • Your chance to receive a government grant will also increase

In the unincorporated association, members can be personally liable to the creditors for the full amount as it is an agreement between individuals and usually does not have legal status.

How can you start a Nonprofit Corporation registration in Canada?

If you want to do Nonprofit corporation registration in Canada, then you have to get a board of directors together to plan your company operations, fundraising, and other activities. Once you plan everything and are ready to start your business, incorporate your organization at the Federal or Provincial level.

Decide what services you want to offer

Check the group of people for whom you want to provide your services and find a way to provide your goods and services to a nonprofit corporation registered in Canada and benefit them. You will have to see what kinds of needs there are and what the best ways to fulfil those needs are.

Check other nonprofit corporations and see what services they provide and how they meet all the unmet needs. If you have already decided what you want to do and are sure about it, figure out the best way to provide your goods and services and what resources you will need to provide services from your corporation.

Form a mission statement

Your mission statement summarizes your organization's goals and objectives for the donors and also for the general public. You need to provide all the basic details about your corporation, such as how it will benefit people. It should not be vague.

Make a Plan to put your mission statement into action

You have to make a plan of how you will make your mission real. For that, you require your structural and internal hierarchy to be exactly in sync with what your mission is. You have to be specific about the services or goods you are offering people, their price, and how much it will cost to operate a nonprofit.

Select Board members

Your board members should be based on what your organization's goals are as well as your purpose. You should prefer to have an attorney and some sort of financial expert like an accountant. For example, if you choose to start your Nonprofit corporation registration in Canada to access clean water, you will want to ask a water expert or scientist to be on your board.

Fiscal sponsorship

If your resources are insufficient to start getting a nonprofit corporation off the ground, you should consider getting a sponsorship from the already established nonprofit organization. You can also get sponsorship from for-profit businesses that are aligned with your cause, or you can ask from educational institutions.

Incorporate your organization

Follow the process of the incorporation of your organization given below for the Nonprofit registration process.

Choose a Business name for your Nonprofit corporation registration in Canada

You can either have a numbered name or a word name. If you choose a word name, it should be unique to your organization. To get a word name, you should order Nuans Corporate name search, and if you choose to keep a numbered name, then a number will be assigned to you when you incorporate it.

You do not need a NUANS report in British Columbia, Quebec, Newfoundland, and Labrador to incorporate your organisation. However, the best and safest thing is to go ahead and get it anyway.

NUANS report certificate, which shows that your name is unique, does not mean that it's a trademark, as these two are different things. If you trademark your organization, it means that you have just protected your organization against other businesses using a similar name. Your organization name Can be both English or French or a combination of both or two separate English and French names. Whatever you choose, it should be unique in both languages.

Choose whether you want to incorporate provincially or federally

For nonprofit corporation registration in Canada, you have the option to incorporate either as a Federal or at the provincial level. If you operate as a federal corporation, then you will have the option to operate all over Canada, and if you choose to operate provincially, then you will be operating locally. However, it may be better if you operate provincially where your headquarters are located.

Draft your Article of Incorporatio

Your organization documents that list the name and address of your corporation, the name and address of board members, and other information about your organisation's founding are called the Articles of Incorporation.

If you intend to remain local, then incorporate provincially

You must pay incorporation fees, which vary among provinces and territories. You will be paying anywhere from $40 in Nova Scotia to $245 in the Yukon Territory as of 2019. Also, this amount is less expensive than a federal corporation. Usually, you will get an incorporation certificate in 30 days, although it may vary among provinces and territories.

File and Draft by-laws

After you have incorporated, you have to do your first board of directors meeting. In this Board meeting, you will have to draft the bylaws for your corporation. These bylaws have to be filed within 12 months with the corporate registrar after your Board of Directors will confirm it.

Nonprofit Corporation Registration in Canada

The steps for the registration of a nonprofit corporation are mentioned below.

all the documents

If you want to do Nonprofit corporation registration in Canada, then You need all your supporting documents for nonprofit corporation registration in Canada application in the Canada Revenue Agency (CRA). While you apply for nonprofit corporation registration in Canada, you will have to upload these documents

  • If you want to do Nonprofit corporation registration in Canada, then Your unique 9-digit identifier is BN, followed by a 2-letter program identifier and a 4-digit reference number. The" RR" for registered charity will be your program identifier; however, your registration will be pending. You will find this number in your certificate of incorporation.
  • In Nonprofit corporation registration in Canada, all the documents you will need to include are all formation documents related to your incorporation, financial records and documents for the association, documentation of your company's income and expenses, and other documents related to your activities.

Admittance of your CRA account

You can register a new account for your organization using the BN. You must go to the Canada Revenue Agency website and select "My Business Account."

After you have set up your account, click on the link that says "Apply to be a registered charity or RCAAA" Then it will take you to the online form.

Finish your online form to register your nonprofit corporation as a charity

When you start filling out the form, then it will ask you some yes or no questions. After you answer these questions, it will determine what other information you will be asked to provide. You have the option to go back to your application at any time.

Keep checking your “progress and status of your application” to know how far along you are on every section of the application. You can also go back and modify the details or information you have given in any section before your submission.

After you have finalized your application, you will be asked to upload all digital copies of the required documents.

Track application status through the CRA account

You will receive an acknowledgement letter from CRA after your application is complete. Your estimated time before your application will be assigned to an officer for review will be included in a letter. After your application is assigned, you will be able to follow its progress through your CRA account.

If CRA need any other information or documents, they will mail them to you. However, you will have 60 days to respond to this mail.

Notice of Registration

When your registration is approved, CRA will send you a registration notice. This registration will include your organization's registration number and the effective date of registration. You have to keep the notice of registration in your organization records along with incorporation documents.

If somehow your Nonprofit corporation registration in Canada is denied, then you will get to know the reason in the letter. You will be able to appeal by sending a written notice 90 days to the Assistant Commissioner.

Do Nonprofit corporations have to disclose Financials to the Public?

Yes, nonprofit corporations have to disclose their financials to the public in Canada, which the Canada Nonprofit Corporation Act mandates. Your corporation must also file tax returns, being one of the regulated entities in the country.

The not-for-profit Act requires to comply with the following

  • Income Tax Return: It is filed every year, which is 60 days after the not-for-profit's anniversary. The Corporation Canada Website will make it public; the tax return must also include a written resolution instead of such meetings.
  • The Public Accountant report – It is specifically required to solicit Nonprofit corporations. Each report is filed 21 days before a yearly meeting of the company members or after a written resolution is signed.

In the Act, a soliciting nonprofit corporation receives the following, whose amount is more than C$10,000 in a Single Financial year

  • Donations, legacies of money, directors, officers, etc

How long will it take nonprofit corporation registration in Canada to be completed?

Usually, the registration process can take 4 to 8 months, which may include both the registrations with Corporations Canada and CRA.

How much will it cost to do a Nonprofit corporation registration in Canada?

Incorporation of your Nonprofit corporation registration in Canada will cost approximately C$200, which is going to take one day. If you want the process completed in just four hours, you can add another C$100 for an express service.

How many types of Nonprofit corporations are there?

There are two types, which are

  • Public
  • Private

If you don't know which one to choose or which type of company will be better for you, then you should get legal advice; we at Enterslice will guide you thoroughly

In a private company, you will at least need two people to form a Nonprofit corporation registration in Canada. In a private nonprofit corporation, there will be the following restrictions

  • You can’t have more than fifty shareholders
  • You can’t sell memberships or shares to the public
  • You have to restrict or forbid the transfer of shares or membership

In a Public company, you will need at least 3 people, and also the public company does not have any restrictions like the private company.

What is the Charitable Status of Nonprofit Corporations?

The government department that is responsible for granting organizations charitable tax status is the Canada Customs and Revenue Agency (CCRA) (formerly Revenue Canada). This process will take at least 6 to 18 months and require applicants to fulfil several necessities. One of the main benefits of obtaining charitable status is that the organization will be able to issue receipts to donors for income tax purposes, which will be a major benefit when soliciting donations. Also, charities receive some tax exemptions. If any organization formed in Canada is a nonprofit corporation and is charitable on purpose, it will then qualify within the Income Tax Act as a charity. A nonprofit corporation does not have the power to issue the deductible receipt simply because it is a nonprofit corporation. It has to first apply, and after being accepted as having charitable status, then only they will be eligible.

If you want to apply for charitable registration, we suggest you first contact CCRA to confirm the use of your corporation. However, whatever your organization uses for proper objects is part of Revenue Canada's charitable registration requirement. Revenue Canada must consider other factors, including the programs your company undertakes to achieve its objectives.

CCRA grants charitable status to organizations

  • Where the activities fall in the legal concept of charity, which the court recognizes
  • Where the organization will meet other requirements of the Income Tax Act

What service does Enterslice provide?

  • At Enterslice, we offer expert guidance on the registration process for nonprofit corporations in Canada. Our team of experts will make sure that you have a smooth and hassle-free registration process.
  • Enterslice makes sure that your nonprofit corporation registration in Canada complies with all legal requirements and regulations set forth by the Canadian government. This will include assistance with documentation, filings, and compliance with nonprofit corporations in Canada
  • We provide you with consultation services to understand your specific needs and objectives. We work closely with clients to develop customized strategies for nonprofit registration that align with the goals.
  • Enterslice will assist you with reserving your nonprofit corporation’s name and will handle nonprofit corporation registration in Canada. We will rationalize all the paperwork and procedures to save you time and effort.
  • Enterslice will help you with charitable status applications whoever is seeking charitable status. We will provide you with administration on eligibility criteria and help prepare and submit the essential documents to obtain charitable status from the Canada Revenue Agency (CRA).

Frequently Asked Questions

You must file a T2 return for every tax year, even if no tax is payable.

It cannot be organized to make a profit.

The national average salary for a nonprofit corporation in Canada is $51,664.

The founder of the nonprofit corporation is hired as the executive director, and in this way, the founder is paid.

The Reporting necessities, which the Canada Revenue Agency sets, have to be maintained by the nonprofit corporation.

Each nonprofit corporation's structure is different, but they have core elements: governance, administration, and programs.

Nonprofit corporation registration with the Ontario government will cost you $155

A nonprofit corporation is a legal entity

Rolex, being a nonprofit corporation, is committed to making a positive impact on the world.

Yes, a nonprofit corporation can own a for-profit entity; also, you can be part of both businesses.

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