How Long Does It Take To Register a Charity?

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According to the Charities Directorate, a straightforward application for Charity Registration takes 2 months (see here). In reality, this turnaround time is seen in only about 1% of charity applications.

For the vast majority of Charity applications, where the CRA (Charities Directorate) has follow up questions, the stated turn-around time is 6 months, though in reality it is closer to 8-10 months.

If you are hiring a lawyer to file your charity application, it is critical to ask him/her how long it will take, from the date he/she is retained, to file the application with the CRA. We have heard from clients, who originally retained other law firms, how their application took many months until being filed, despite much importuning to hurry and submit the application for review. 

This is very unfortunate, as Charities who are not registered may not issue tax receipts, thereby limiting their fundraising options and limiting their opportunity to provide assistance to others.

If you want your Charity Application submitted super fast, generally within 1-3 weeks of being retained, call us today at 416.900.0379 or email: charity.advice@biglaw.ca 

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How to Best Structure your Charity?

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Charities are generally structured in one of two ways. Below are some of the pros and cons of each structure:

The form of a charity will generally be:

1. an unincorporated association;

2. a Not-for-Profit corporation incorporated under either federal or provincial legislation.

Considerations in determining which structure to use

Formality: Corporations are more commonly recognizable entities, where directors and potential donors are more comfortable with their structure.

Dissolution: It is easier, quicker, and less costly to dissolve an Association than it is to dissolve a NFP corporation.

Liability: Directors of a NFP corporation are generally protected from liability (they should nonetheless purchase director’s insurance), whereas Directors of an Association are exposed to being sued.

Contracts: Contracts with a NFP corporation are entered into in the name of the corporation, whereas contracts entered into with an Association, must bear the names of the members of the Association.

Real Estate – Generally, a charity which holds real estate must be incorporated. Further, an Association cannot hold real estate in its own name, but in the name of it’s Trustees. At the passing of the Trustees or when they resign, the property would have to be re-registered.

Procedures: There are established administrative procedures for Not-for-Profit corporations in connection with their creation and ongoing administration whereas Associations do not have established guidelines in relation to their creation and administration.

Governance: The law governing corporations is established and legislated, whereas the laws related to Associations are a lot less established and most lawyer are unfamiliar with the relevant laws.

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A By-laws Checklist

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Q. At minimum, what should a comprehensive Not-for-Profit bylaws look like?

A. Non-Profit By-laws should cover the following:

  • The organization’s purpose

  •  A description of the membership

  •  A description of the board composition and governance structure

  •  Location of head office

  •  Terms of office for board members

  •  Number of meetings held by the board, including Annual General Meetings

  •  Special meetings and in-camera meetings

  •  The number and a brief description of any standing committees and the process for appointing a committee chairperson

  •  Description, title and responsibilities of Executive Directors (if applicable)

  •  The election and voting process

  •  Details about quorum

  •  Filling board vacancies

  • Removal of directors

  •  Senior staff positions

  •  Making amendments to bylaws

  •  Required reports and legal filings

  •  Charitable status

  •  Details about fiscal year

  •  Bank accounts, financial obligations, funders

  •  Conflict of interest

  •  Indemnification

  •  Disbanding the organization and disbursement of funds and capital assets

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Charity Registration when Providing a Public Amenity

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Organizations established to provide public amenities can qualify for registration.

However, they must generally restrict their activities to providing and maintaining the facility.

Although it may organize some of the activities taking place therein, if the applicant is mainly involved in planning the activities, it becomes a provider and promoter of those activities. In that case, for the organization to qualify for registration as a charity, all of the activities it offers must be furthering a charitable purpose.

When receiving such an application, the CRA will require clarification regarding:

·         the programs the applicant intends to carry out itself;

·         their frequency (in comparison to the frequency of renting out space to third party organizations);

·         a detailed breakdown of the associated expenses (and corresponding revenue where applicable);

·         a sample schedule of programs/events.

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ONCA is Coming! What Should We Do?

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Not-for-Profit Corporations in Ontario facing the prospect of ONCA coming into law in the next couple of years have 3 options at the Present:

  • Wait for ONCA to come into force and then make the necessary changes. This is what most Ontario Non-Profits will do;

  • Make changes now and update the governance documents. The problem with going this route is that further changes will likely be required once further details of ONCA are released and the legislation comes in force.

  • Move from the Ontario corporate jurisdiction to the Federal corporate jurisdiction.

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Will an Organization offering Career Counseling be Registered as a Charity?

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Activities which

  1. relieve unemployment of individuals who are unemployed or facing a real prospect of imminent unemployment; and

  2. are shown to need assistance

may be charitable if they directly further one or more of the charitable purposes. Examples of activities that relieve unemployment include:

  • providing employment-related training;

  • providing career counseling

  • providing assistance with resumes;

  • preparing for job interviews establishing lists of available jobs.

Providing employment-related training can also be charitable.

Generally, employment related training must not be limited to a specific employer, because this could result in an unacceptable private benefit to the employer.

However, exceptions may be possible in areas of social and economic deprivation. Examples of employment related training activities for eligible beneficiaries include:

  • employability training;

  • entrepreneurial training;

  • and on-the­ job training.

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Qualify as a religious Charity

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To qualify as a religious charity, an organization must advance religion in the charitable sense.

This is understood by the Charities Directorate to mean that the charity is involved in advancing religion in the following three ways:

1. a doctrice that there is a god(s), or supreme being(s) (a theistic doctrine);

2. a doctrine that adherents must worship or revere that god or supreme being (a worship doctrine);

3. a particular and comprehensive system of faith and worship;

Not all activities conducted in the name of religion advance religion in the charitable sense. 

Activities that directly further an advancement of religion purpose must be:

1. clearly and materially connected to the religion's teachings, doctrines, or observances; and

2. constitute a targeted attempt to manifest, promote, sustain, or increase belief in the religion to or by adherents or the public.

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T3010 Filing Reminder

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The CRA sent out the following email last week to tens of thousands of charities with filing deadlines of June 30th:

The deadline for filing your charity’s information return is fast approaching! It is due at the latest on June 30, 2018. If you have already sent your return, disregard this email.

The Income Tax Act requires that registered charities file a complete Form T3010, Registered Charity Information Return, and financial statements within six months of its fiscal period end. This requirement applies whether your charity was active or not during this fiscal year.

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In the last two years, over 1,200 charities lost their registration status because they did not file their information return. If your charity’s return is not filed on time, its registration could also be revoked.

For more information about the information return and the filing obligations, go to cra.gc.ca/charities.

If your charity no longer wants to be registered, it must send a letter to the Canada Revenue Agency (CRA) asking to revoke its registration. For more information, visit our website.

Mail to:Charities Directorate
Canada Revenue Agency
Government of Canada
Ottawa ON K1A 0L5
Canada

Fax to:613-957-8925

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