Not-for-profit guide

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Not-for-profit guide

Table of contents

Introduction
Not-for-profit incorporation
Managing the books
Charitable status
Taxation
Financing
Other resources

Introduction

Not-for-profit corporations are organizations that provide products or services to improve or benefit a community. These organizations are usually concerned with generating enough revenue to provide support to their chosen community. Any money made by a not-for-profit is not for the personal gain of its directors, members or officers, but goes back into the organization to further its aims and projects. For example, a social club may hold an art sale or craft fair in order to generate revenue for the services it provides to the community.

There are several kinds of not-for-profit organizations such as:

• Professional or community organizations
• Sport or athletic
• Social clubs
• Service clubs (for example Kiwanis or Lions)
• Charities

This guide provides information on not-for-profit corporations. To set up an informal not-for-profit, you may wish to speak with a lawyer. The Law Society of Ontario's lawyer referral service may be able to assist you in finding a lawyer, based on your needs.

Use online:
Law Society of Ontario's Lawyer Referral Service

If you are interested in information on setting up a cooperative, please refer to our Starting a co-operative guide.

Not-for-profit incorporation

You can structure your not-for-profit organization as a federal or provincial corporation. The process and requirements for setting up your corporation will vary based on the option you choose. Federal incorporation may be a good option if you need nation-wide business name protection or if you will be operating internationally. If you plan to be located in only one province, you may wish to incorporate provincially. You may wish to consult a lawyer when choosing the best option for your organization. 

Federal incorporation

For information on creating a federal not-for-profit corporation, you can contact Corporations Canada or refer to their website.

Read online:
Creating a not-for-profit corporation
Naming a corporation – How to get a name

To set up a federal not-for-profit corporation, you can file online or, if you cannot, you will need to make a request for the paper forms, obtain a corporation key (required for all paper transactions) and then submit the following documents to Corporations Canada. Note that the NUANS report is now also available as part of the online filing process.

• Articles of Incorporation- Form 4001
• Initial Registered Office Address and First Board of Directors – Form 4002
• A Canada-wide NUANS name search report that is not older than 90 days
• The filing fee

Contact Corporations Canada:
1-866-333-5556

You can also learn more about the specific rules for operating a federal not-for-profit corporation on the Corporations Canada website.

Read online:
Not-for-profit corporations

Provincial incorporation

If you would like more information about the requirements for setting up and operating a provincial not-for-profit corporation in Ontario, refer to the not-for-profit incorporator's handbook.

Read online:
Not-for-profit incorporator's handbook

To set up a provincial not-for-profit corporation, you will need to submit the following to the Ministry of Public and Business Service Delivery:

• Your completed and signed Articles of Incorporation under the Ontario Not-for-Profit Corporations Act, 2010 (ONCA)
• The North American Industry Classification System (NAICS) primary activity code that best fits your activities
• An Ontario-biased NUANS Name Search Report
• A fee of $155
• Supporting documents, if required
• A contact name, address and telephone number

Contact the Ministry of Public and Business Service Delivery:
1-844-286-8404
Create a new business entity or not-for-profit corporation

There are specific rules for incorporating and operating Ontario not-for-profits. Find out how your not-for-profit corporation may be affected by these laws.

Read online:
Rules for not-for-profit and charitable corporations

Managing the books

Once you’ve incorporated your not-for-profit, you will have ongoing responsibilities that are specific to not-for-profit corporations, including:

• Maintaining records and making them available to directors
• Proper filing and income reporting
• Making sure that any changes to the structure of the corporation conform to the articles of incorporation

Federal

You can find out more about the financial record-keeping and reporting obligations of a federal not-for-profit from Corporations Canada.

Contact Corporations Canada:
1-866-333-5556
Financial Statements and review

Provincial

You can find out more about the financial record-keeping and reporting obligations of a provincial not-for-profit from the Ministry of the Attorney General.

Read online:
Guide to the Not-for-Profit Corporations Act, 2010

Charitable status

You may want charitable status for your not-for-profit corporation in order to issue tax receipts or be eligible for specific tax incentives. Although many not-for-profit corporations are registered as charities, charitable status is not automatically obtained when you set up a not-for-profit. Refer to our document on charitable status for more information.

Taxation

If you sell goods and services in Ontario and make $50 000 or more within any 12-month period, you must register for a business number to charge, collect and remit the Harmonized Sales Tax (HST).

Read online:
GST/HST Information for Non-Profit Organizations
GST/HST Information for Charities

As a not-for-profit organization, you are generally exempt from paying income tax but may be required to file a T1044 - Non-Profit Organization (NPO) Information Return with the Canada Revenue Agency (CRA). The information return is filed annually and, depending on your organization’s activities, you may also need to file additional forms. Speak with CRA for more information.

Contact CRA:
1-800-959-5525

Financing

Grants, contributions, subsidies and loan guarantees are available from various government sources. Use Innovation Canada’s online search tool to look for programs and services that may apply to your business.

Search online:
Business Benefits Finder

The following financing program also applies specifically to not-for-profit organizations:

The Trillium Foundation

The Trillium Foundation offers a variety of funding programs in support of organizations that give back to the community. Charitable or not-for-profit businesses are eligible for funding.

Contact the Trillium Foundation:
1-800-263-2887
Ontario Trillium Foundation

Other resourcesAssociations

Industry-specific links

• Imagine Canada - Sector Source
• Best Practice Guidelines for Screening Volunteers
• Supporting the sharing economy
• Start, build, and grow a social enterprise: Start your social enterprise