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A non-profit corporation is a legal entity separate from its members and directors formed for purposes other than generating a profit to be distributed to its members, directors or officers. While a non-profit corporation can earn a profit, the profit must be used to further the goals of the corporation rather than to pay dividends to its membership. Non-profit corporations are formed pursuant to federal or provincial law. A non-profit corporation can be a church or church association, school, charity, medical provider, activity clubs, volunteer services organization, professional association, research institute, museum, or in some cases a sports association. Non-profit corporations must apply for charitable status to benefit from tax-exempt status and to issue tax-deductible receipts to donors.

Non-profit corporations are distinct from business corporations which are formed to make a profit and to distribute the profit to its shareholders. Business corporations are regulated by either federal or provincial laws. For more information on business incorporations, click here.

Incorporating gives an organization legal status. It is not essential for a non-profit corporation to incorporate. Whether an organization decides to incorporate or not depends upon its activities, nature, or type of organization.
As a legal entity, an incorporated association is recognized by the legal system as having rights and responsibilities. An incorporated organization can enter into contracts, buy land, borrow money, have bank accounts, etc., in its own name. Other advantages to incorporating may include:

• The liability of the members is limited (for example, members are not personally liable for debts of the corporation);
• Continuity of the organization is assured while the membership changes;
• A corporation can own property in its name regardless of membership change;
• The ability to bring a legal action in its own name (an unincorporated body cannot); and
• The chances of receiving government grants may increase because of the stability the organization appears to have.

An unincorporated association is an agreement between individuals, and generally has no legal status. The members may be personally liable to the creditors for the full amount of any debts. An unincorporated body cannot generally sue or be sued; members must sue or be sued personally. Title to property has to be in all the members’ names if the group is not incorporated. This can make selling the property difficult.

Following the selection and reservation of a corporate name, the next step is to file non-profit articles of incorporation (sometimes memorandum) with the proper government department. If you intend on applying for charitable status, it is important that the articles contain the required clauses to make sure your articles will qualify for charitable status (see below).

The corporation must comply with corporate formalities and hold annual meetings of directors and members. Bylaws must be adopted for the corporation. Documents that help you comply with these corporate formalities are contained in our packages.

One of the most important factors for any non-profit corporation when deciding to incorporate is the cost of incorporation. The jurisdiction of incorporation will automatically become criteria for decision because government fees are not the same.
Below are the current government incorporation fees for non-profit corporations in Canadian jurisdictions:

Moreover, if you are incorporating a federal corporation, you must also register extra-provincially. Currently, the extra-provincial registration fees for a federal corporation which has its registered office in that province are (these are in addition to the federal incorporation fee of $250 indicated above):