One of the most commonly overlooked mistakes in completing the Form t2050 Charity Application is appointing an ineligible individual to the Applicant’s Board of Directors.
The Income Tax Act states that the CRA may refuse to register a charity that has applied for registration as a registered charity if an ineligible individual is a director or manages the charity, whether directly or indirectly.
What is an ineligible individual?
Subsection 149.1 (1) of the Act defines an "ineligible individual," as an individual who, at any time, has been convicted of a relevant criminal offence.
"Relevant criminal offence" means:
a. relates to financial dishonesty, including tax evasion, theft and fraud, or
b. in respect of a charity, is relevant to the operation of the charity.
It is thus critical that before setting up your Board of Directors, that you ascertain that all those in positions of authority in the Charity be squeaky clean of any crimes which could jeopardize your application.
If you are unsure about whether a specific crime disqualifies one of your directors, give us a call at 416-900-0379 or email us at firstname.lastname@example.org and we will gladly advise.