Frequently asked questions - Not-for-profit incorporation

What is the Canada Not-for-profit Corporations Act (NFP Act)?

The Canada Not-for-profit Corporations Act (NFP Act) is the law that governs the internal affairs of federal not-for-profit corporations. When it came into force on October 17, 2011, it replaced the Canada Corporations Act (CCA Part II) that previously governed federal not-for-profit corporations.

What are the benefits of incorporating?

The following are some of the benefits of incorporating:

  • Separate legal entity: a corporation has the same rights and obligations as a natural person meaning, among other things, it can acquire assets; go into debt; enter into contracts; sue or be sued; and even be found guilty of committing a crime.
  • Limited liability: this means that, as a general rule, the members of a corporation are not responsible for its debt.
  • Continuous existence: a corporation continues on after the death of an individual.
  • Possible tax advantages: you may wish to contact the Canada Revenue Agency to enquire about tax advantages specific to your situation.
What are the benefits of incorporating federally?

The following are some of the benefits of incorporating federally:

  • The NFP Act: it offers new rules that are modern, flexible and better suited to the needs of today's not-for-profit sector.
  • Heightened name protection: an approved federal name allows a corporation to operate across Canada under that name.
  • Location flexibility: you have a degree of flexibility regarding the province or territory where your registered office can be located, where corporate records are maintained and where annual meetings are held.
  • Recognition: federal corporations are easily recognized around the world as Canadian corporations.
  • High-quality client service: Corporations Canada processes applications and all other service requests with minimal delay.
  • Resources for not-for-profit corporations: Corporations Canada has created a variety of materials to help start and operate a corporation.
Where can I find the incorporation forms?

Incorporation forms are available by simply clicking on Form 4001 - Articles of Incorporation and Form 4002 - Initial Registered Office and First Board of Directors. These can be completed on screen, printed, signed and then sent to Corporations Canada. Incorporation forms are also available by contacting us.

How do I choose a name for my not-for-profit corporation?

Information on choosing a corporate name can be found in the Choosing a Name section.

What is a Nuans Name Search Report?

A Nuans Name Search Report is a document that contains business names and trade marks registered in Canada that sound or look similar to a proposed name.

Where can I obtain a Nuans Name Search Report for my proposed corporate name?

You can order your own Nuans Name Search Report by visiting Nuans.com to access the Nuans Real-Time System (RTS). You can also obtain a Nuans Name Search Report by using the services of a search house, which is a private sector business that may be found in the telephone directory under 'Searches of Records'.

How do I send my application to incorporate a not-for-profit corporation?

The application to incorporate a not-for-profit corporation (i.e., the completed forms, the filing fee and any other required documents) should be sent to Corporations Canada by mail, fax or e-mail (see our Contact Us information for more details).

What does Corporations Canada do with my application?

Corporations Canada reviews applications for incorporation to verify that the documents comply with the NFP Act. If the application meets all of the requirements, Corporations Canada will issue a Certificate of Incorporation within five business days. Your corporation is created as of the date indicated on the Certificate of Incorporation. This is usually the date that Corporations Canada receives your 'complete application'. For further information consult the document entitled Creating a Not-for-profit Corporation.

Who can incorporate a not-for-profit corporation?

One or more individuals who are 18 years of age or older, who have not been declared incapable by a court and who do not have the status of bankrupt can incorporate a not-for-profit corporation.

A company or an incorporated body can also incorporate a not-for-profit corporation.

Must by-laws be filed with Corporations Canada under the NFP Act?

Yes, by-laws must be filed with Corporations Canada within one year after the members have approved them. Corporations Canada does not review or approve by-laws but does make them available to the public. You may want to consult the By-law Builder and the Model By-laws to help you with the creation of by-laws.

Do I need to send by-laws to Corporations Canada for approval before they can be effective?

No. The by-laws are to be filed with Corporations Canada but not for approval. The by-laws come into effect when they are made, either by the board of directors or the members. If they are made by the directors, they must be submitted to the members at the next meeting of members. The members can vote to confirm, reject or amend the by-laws. The by-laws are to be filed with Corporations Canada within 12 months of being confirmed by members.

When do by-laws take effect?

Most by-laws take effect on the date that the board of directors makes them through a resolution of the directors. However, if a corporation prefers to have by-laws come into effect only when they are approved by members, that provision can be included in the by-laws or articles. Note that there are certain by-law provisions that can only be made by members, not directors. Refer to the Operating a Federal Not-for-profit Corporation section for more information.

How long does it take for Corporations Canada to process an application to incorporate under the NFP Act?

Corporations Canada's service standard for processing applications to incorporate under the NFP Act is five working days.

What tools or documentation does Corporations Canada provide to assist in the creation of a not-for-profit corporation?

Corporations Canada provides the following to assist you in creating a not-for-profit corporation:

Corporations Canada does not give legal advice. A not-for-profit corporation may wish to consult a lawyer or other professionals when developing its documents.

What tools or documentation does Corporations Canada provide to assist in the operation of a not-for-profit corporation?

Corporations Canada provides the following to assist you in operating a not-for-profit corporation:

Corporations Canada does not give legal advice. A not-for-profit corporation may wish to consult a lawyer or other professionals when developing its documents.

Where can I find a copy of the NFP Act and its regulations?

You can find a copy of the NFP Act and its regulations on the Department of Justice website.

Once incorporated, does my corporation need a corporate seal?

A corporation under the NFP Act is not required to have a seal. If you wish to have a corporate seal for your corporation, you may purchase one from a legal stationary store or a commercial supplier.

When a not-for-profit organization incorporates at the federal level, does it need to register with the provinces and territories?

Yes. Whether a corporation is incorporated federally, or in one of the provinces or territories, it will likely be required to register in any of the provinces or territories where it carries on its activities.

What do I need to do once the corporation has been created?

Once the corporation has been created, a number of other items (e.g., the need for an organizational meeting of directors; a first meeting of members; and provincial and territorial registration) will need your attention. The Operating a Federal Not-for-profit Corporation section of our website provides basic general information on how to operate a not-for-profit corporation under the NFP Act.

Is an NFP Act corporation automatically considered a non-profit organization under the Income Tax Act?

No. Incorporation under the NFP Act does not automatically mean that the corporation will be exempt from tax under the Income Tax Act. More information on non-profit organizations under the Income Tax Act can be found at the Canada Revenue Agency website.

Where can I find information on registering as a charity under the Income Tax Act?

The Income Tax Act requires corporations that are created and operated exclusively for charitable purposes to register with the Canada Revenue Agency (CRA) as charities. Registration with the CRA allows a corporation to issue official tax donation receipts. For further information, consult the Canada Revenue Agency charities website.

My corporation intends to become a registered charity, how should I proceed?

If your corporation intends to become a registered charity, CRA recommends that you submit a draft copy of Form 4001 – Articles of Incorporation with your application to register as a charity and that your application to CRA be submitted prior to the time you file your application for incorporation. Otherwise, if CRA requires changes, the corporation may have to incur additional costs by applying to Corporations Canada for articles of amendment. For further information consult the Canada Revenue Agency charities website.

What is the minimum number of directors a corporation can have?

Every corporation must have at least one director, except a soliciting corporation (i.e., one that receives public donations and/or government grants in excess of $10,000 in a single financial year). A soliciting corporation must have no fewer than three directors, at least two of whom are not officers or employees of the corporation or its affiliates.

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