Whether you are operating a non-profit organization by yourself, or through a partnership with a group of people, and you or your group wants to officially register your non-profit organization, here’s a general rundown of the process of registering a non-profit organization in Canada.
The legal requirements and the process in registering a non-profit organization in Canada is primarily governed by the Canada Not-for-profit Corporations Act, which is complemented by the Charities Registration (Security Information) Act and the Income Tax Act.
Generally, the process of registration of a non-profit organization is:
- Incorporation
- Filing of By-Laws
- Tax Registration
Although, the 2nd and the 3rd step may be done simultaneously to be more time efficient.
1: Incorporation
The process of incorporation may be done at the federal level, or provincial or territorial level. When incorporated federally, your non-profit organization may operate at the federal level, and within any Canadian province or territory, subject to any additional provincial or territorial requirements.
For provincially or territorially incorporated non-profit organizations, your organization may only operate under its incorporated name in the respective province or territory it was incorporated. For federal incorporation, you may do it online through the website of Corporations Canada.
During this stage in the process, we recommend that you reach out to a Canadian charities and not-for-profit lawyer in your province
Corporate Name
The first step in the incorporation is to choose (or finalize, if you already have one) your non-profit organization’s name. Once you or your partners have chosen or finalized a name for your non-profit, you must then obtain a NUANS report.
The NUANS report does not approve the name itself but will only certify that your chosen name is reserved for your non-profit’s incorporation process. As such, after obtaining the NUANS report, the procedure of incorporation must then be followed.
However, non-profit organizations which are provincially incorporating in Quebec, British Columbia, Newfoundland and Labrador, or Nunavut would not need a NUANS report. We recommend looking for a charities lawyer in Quebec for help with their local laws.
Incorporation Proper
The Canada Not-for-profit Corporations Act (or NFP Act) is the federal law governing not-for-profit corporations. For the purposes of registering a non-profit organization or corporation, Part 2 of the NFP Act provides for the process and considerations for incorporation. It states that any person, who is of legal age, is not incapable, and is not bankrupt, may incorporate a non-profit organization in Canada, provided that the following requirements are met:
- Submission of the Articles of Incorporation signed by its incorporators
- Submission of a notice of the non-profit's Registered Office
- Submission of a Notice of Directors
In Section 7 (1) of the NFP Act further provides for the minimum requirements of what should be included in the Articles of Incorporation, such as your non-profit's name, the location of your registered office, the number of directors, any organizational activities you would want to restrict, your non-profit's statement of purpose, and the distribution of its remaining properties in case of liquidation.
Generally, any language can be used in the Articles of Incorporation and there are no current restrictions whether it’s in English, in French, or a combination of both.
2: Filing of By-Laws
After the Incorporation, you now have to create your non-profit's By-Laws and its filing with Corporations Canada. The By-Laws govern the internal operations of your non-profit and may expound the provisions in your Articles of Incorporation. Although the NFP Act does not require that the By-Laws be submitted together with the Articles of Incorporation, it mandates that the By-Laws must be submitted to Corporations Canada within 12 months after it has been confirmed by the other members.
The By-Laws are usually drafted by the non-profit's directors during their first directors’ meeting, and would then be approved by the general membership after its completion, if your organization is a large one.
Aside from that, the first directors’ meeting must also tackle all internal setting-ups and the adoption of resolutions that will allow your non-profit to conduct its activities. Specifically, Section 127 (1) of the NFP Act states that the first organizational meeting must:
- make the By-Laws;
- adopt forms of debt obligation certificates;
- adopt rules in maintaining corporate records;
- authorize the issuance of debt obligations;
- appoint officers;
- appoint an interim public accountant who will hold office until the first annual meeting;
- issue memberships;
- make banking arrangements; and
- transact other business, such as adopting corporate policies, employment of staff, among others.
Although, you may amend these provisions after your submission of the By-Laws according to its method/s of amendment.
The NFP Act also provides for the provisions which must be included in your non-profit's By-Laws. However, the directors may also derogate from what was provided in the NFA Act, as long as it’s now entirely different from its “default rules”.
After the adoption of the By-Laws and the first directors’ meeting, the non-profit may now proceed with the first members’ meeting.
3. Tax Registration
When your non-profit organization is registered under the NFP Act, it would have to be registered (again) under the Income Tax Act so that you may be able to issue official donation receipts, when receiving donations, and be exempt from Canadian taxation laws. Here, the registration must be done with the Canada Revenue Agency (CRA) and it’s highly specific that your non-profit organization is created and is operated exclusively for “charitable purposes”.
To fall within the meaning of a “charitable purpose” according to CRA, your non-profit organization should fall within one of four broad categories of charity:
- relief of poverty
- advancement of education
- advancement of religion
- other purposes beneficial to the community (e.g., promotion of health and protection of the environment)
When your organization do fall within any of these categories, its “charitable purpose” must have the means of providing the charitable benefit, and must be able to describe your organization’s eligible beneficiary group.
How much does it cost to register a non-profit organization in Canada?
Incorporating your non-profit organization will typically cost C$200, which will only take 1 day. You may add another C$100 for an express service which will complete the incorporation in just 4 hours.
How long does it take to register a non-profit organization in Canada?
Generally, registering your non-profit organization in Canada may take up to 4 to 8 months, which may include both the registrations with the Corporations Canada and the CRA.
Learn more about other laws and regulations governing non-profit organizations in Canada by consulting with the best charities or not-for-profit lawyers in Canada to guide you with your legal needs.