Registering A Charitable Organization In Ontario
Originally Published: June 5, 2015
What is a Charitable Corporation?
A charitable organization is a specific type of Not For Profit entity. The primary difference between a regular Not For Profit incorporation and a Charitable corporation is the charitable component allows the organization to obtain charitable status from the Canada Revenue Agency (CRA), giving the organization the ability to accept donations and provide tax receipts to those individuals and corporations who contribute to the organization financially.
What is the Difference Between a Not For Profit and Charitable Corporation?
There are two types of not for profit entities – charitable and non-charitable. Depending on what the organization is doing and what object clauses and special provisions are used, it would determine whether the organization is considered charitable or non-charitable.
Typically, non-charitable not for profits are groups of people with similar interests, such as a Literary Society, Athletic Club, or Professional Association. On the other hand, a charitable not for profit is created with the intention of giving back to the community in some way, for example Animal Welfare, Relief of Poverty or Religious Organizations.
In general the corporation must fall into the category of benefiting the community either within Canada or abroad.
A charitable not for profit, using charitable object clauses and special provisions, can apply to the CRA for charitable status.
What Types of Businesses Are Considered Charitable?
In general the corporation must fall into the category of benefiting the community either within Canada or abroad.
Here are some examples of commonly incorporated charitable businesses.
| Religious Organizations | Religious Schools | Foundations |
| Services for Seniors | International Development | Abuse support |
| Relief of Poverty | Disabled Support | Health |
| Substance Abuse | Preservation of Environment | The Arts |
| Community Centres | Low Cost Housing |
What is Required to Complete a Non-Profit or Charitable Incorporation?
The name of the business should include both a distinctive and descriptive element. The distinctive part of the name is the unique part that helps differentiate your organization from other organizations or businesses. The descriptive part would help give an idea of what your organization is doing. The name itself should imply that the organization is a not for profit or charitable, and should reflect the objectives listed. For example, the name ‘Main Street Ministry’ uses the distinctive element ‘Main Street’, and the descriptive element ‘Ministry’. From the name, you can deduce that this is a religious organization and should expect to find objectives that reflect this listed.
A legal ending can be included in the name, if you wish, but is not required. If you do wish to include a legal ending, those that can be included are:
INC.
INCORPORATED
CORP.
CORPORATION
The legal endings Limited and LTD. cannot be used in the name of a not for profit or charity.
If you wish to use the word ‘Foundation’ or ‘Charity’ within the name, the Office of the Public Guardian and Trustee will first need to review the name to ensure it is acceptable and in line with the object clause wording.
Requirements For the Directors/Members of a Non Profit or Charitable Organization
A minimum of 3 directors or members is required to incorporate the business and must be maintained at all times. Whereas previously original signatures were required on the documents to be submitted in original ink, the Ministry now asks for one authorising person to confirm that the document has been signed. If you are setting up a business bank account for the entity, most financial institutions will want to have all directors present to set up the account. The directors may also need to see the directors with photo ID.
Business Address
If you have a separate business address, you may provide. If not, you can use the home address of one of the directors.
Objects of Corporation
This listing provides what your business activities are. If your organization’s activities are listed within the examples listed above, under the section ‘What types of businesses are considered charitable?’ the Province provides pre-approved object clauses for you to use. The Government of Canada also provides wording for charitable purposes that can be included for your Ontario charity. If none of these pre-approved purposes fit with what you are doing, you can provide your own. Typically 2-6 paragraphs listing what you are providing to the community.
There are both charitable and non-charitable pre-approved object clauses available to choose from, if there is one that first with what you are doing. If you plan on applying to the CRA for charitable status, you will want to ensure you are using charitable objects.
Special Provisions
The Special Provisions is only required for a charitable organization. This is a standard template regarding taxation that is required to be within the Article documents. Charitable organizations looking to obtain status from the CRA will also want to ensure the charitable special provisions are included.
What Are the Benefits of Being a Charitable Organization?
Not For Profit and Charitable Tax Benefits
Not For Profit and Charitable organizations enjoy some tax privileges, such as exemption or reduction liability for some Municipal, Provincial and Federal Taxes.
Once you have gained acceptance to be a registered charity under the federal Income Tax Act, you may issue tax donation receipts to donors and those donors can obtain a tax credit for the donations. A Charitable Tax receipt number will be assigned to the organization and available for tax receipts to individual or corporate donors or philanthropists.
Limited Liability for Directors/Members
Legal protection where the corporation is a separate entity from its directors or members and is available to protect the charitable property.
Name Protection for Business
Name protection for the business when it is an incorporated entity is available within the jurisdiction the organization is established. There is strict government oversight to ensure the corporate name cannot be confused with either another entity in a different jurisdiction or a for profit business.
What Are the Costs to Establish a NFP or Charitable Organization?
The Province of Ontario now only offers one option for turnaround processing time for not for profit registrations. Where previously, they offered expedited processing, the Ministry now only has one standard turnaround option. The government fee for this is $155.00.
Agent Fees
There are a few businesses in Ontario who offer the services to assist you in incorporating a charitable organization.
Our fee schedule and additional information is listed on our non-profit/charitable incorporation page.
Revenue Canada
The first step in the process is getting the Charitable Incorporation approved and registered. Once this is done, you will receive your completed Articles of Incorporation from the Province of Ontario. With the completed Articles in hand, you can now move to step two of applying for charitable status required to fully acquire the charitable identity.
The secondary step is to contact Revenue Canada charitable division and provide a copy of the application along with a copy of the Articles of Incorporation for review and acceptance.
>>Download a form that is required to be completed by Revenue Canada
This processing, from our understanding, takes 2 to 4 months until completion. Once you have obtained the charitable tax number from Revenue Canada you will be able to begin providing receipts for donations. In the meantime, once the incorporation has been completed with the Province of Ontario, you may open a bank account and begin all processing of your business exclusive of the tax receipts until this has been completed.
We also offer the ability to easily incorporate your company if you wish to use our services here:
