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A not-for-profit corporation is a legal entity established under Canadian or provincial legislation. It is created for purposes other than making a profit for its members, directors, or officers, distinguishing it from business corporations, which aim to generate profits for their shareholders. Examples of not-for-profit corporations include religious organizations, schools, charities, medical providers, activity clubs, volunteer groups, professional associations, research institutes, and museums, among others.
Incorporating a not-for-profit organization grants it a distinct legal status separate from its members. This allows the organization to enter contracts, purchase property, borrow funds, and maintain bank accounts in its own name. Moreover, as a separate legal entity, the not-for-profit enjoys limited liability, meaning its members are not personally responsible for the organization’s debts. It also has perpetual existence, remaining intact despite changes in membership. Lastly, incorporation can be beneficial when applying for government grants, as it demonstrates the organization’s stability.
To identify the appropriate jurisdiction for your corporation—federal or provincial—consider these questions:
By evaluating these factors, you can more effectively determine the most suitable jurisdiction for your corporation.
No, a not-for-profit corporation and a charity are legally distinct. To qualify for charity status and issue tax receipts, your corporation must apply for charity status through the Charities Directorate of the Canada Revenue Agency.
Registered charities in Canada encompass charitable organizations and public or private foundations. To qualify as a charity, they must have a charitable purpose that fits into one or more of these categories:
In contrast, not-for-profit organizations include associations, clubs, or societies that are not classified as charities. They are organized and operated solely for purposes such as:
Yes, the incorporation process involves creating several legal documents, so it’s advisable to have a lawyer prepare them for you.
We provide expert corporate and business law services, delivered by top Quebec lawyers with a focus on precision and detail. Our meticulous approach ensures every case is handled with care, achieving successful outcomes for clients. Accessible online from anywhere, we offer competitive rates and transparency with no hidden fees. We proudly serve businesses across Quebec, including in:
