Incorporation of a Non-Profit Organization in Quebec

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.

• What are the benefits of incorporating a not-for-profit organization?
• What factors should I consider when deciding whether to incorporate my not-for-profit federally or provincially?
• Are not-for-profit corporations and charities the same?
• What is the difference between registered charities and not-for-profit organizations in Canada?

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:

1. Where will my not-for-profit be operating? Will its activities span Canada or remain within a single province?
2. How crucial is it for the name and brand of my not-for-profit to be protected nationwide?
3. What are the costs involved in incorporating and registering my not-for-profit at the provincial level?
4. Will the corporate directors be residents of Canada?

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:

1. Relief of poverty
2. Advancement of education
3. Advancement of religion
4. Other community-benefiting purposes

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:

1. Social welfare
2. Civic improvement
3. Recreation
4. Pleasure
5. Any non-profit purpose

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