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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Should a Charity incorporate as a Not-for-Profit?

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Q: When considering the organizational structure of my new charity, what factors should I take into consideration regarding the decision to incorporate the charity or not?

A: Charities can operate within different structures:

  • As an incorporated entity under federal legislation

  • Operate under a specific provincial incorporating act

  • Chartered by a special act of Parliament or of a provincial legislature.

  • Operating without incorporating.

The appropriate organizational structure for each charity will depend on its specific needs, circumstances, and activities.

Deciding on the organizational structure is an important decision that each group needs to weigh carefully. Before proceeding with a final decision on organizational structure, it is advisable to consult with a lawyer who has experience in corporate matters relating to charities, and who can advise whether formal incorporation or another form of organizational structure would be more appropriate.

Here are some issues to consider:

  • The corporation is a separate legal entity. It is an artificial person having an independent existence distinct from that of its members. The corporation owns property in its own name; acquires rights, obligations, and liabilities; enters into contracts and agreements; and has the capacity to sue and be sued as would a natural person.

  • As a separate legal entity, a corporation is not affected by changes in its membership and its existence continues in perpetuity unless its members or the government take steps to dissolve it.

  • Incorporation also offers certainty as to ownership of assets because, being a separate legal entity, it has the right to own property in its own name. In unincorporated charities, ownership vests in the name of individual trustees or in some cases, the “membership.” This may give rise to confusion or conflicts when it comes to selling or transferring property if those individuals are not clearly defined or agreed upon.

  • Since an incorporated charity is a separate legal entity, its obligations and liabilities generally do not become those of its members.

  • In addition, incorporation does not immunize a director from exposure to personal liability if he or she fails to meet their legal duties and standard of care as fiduciaries.

  • A charity that is incorporated must meet certain requirements under the incorporating law. These may include the requirement to file returns with the appropriate incorporating authority.

  • In addition, an incorporated charity may be required to appoint an external auditor to prepare audited financial statements on an annual basis.

  • The fees to incorporate are generally higher than if the charity is organized as an Association.

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Yes, a Registered Charity may be involved in political activites. But...

A charity cannot:

a. have political purposes;

b. engage in partisan political activities;

c. its political activities cannot exceed legal restrictions.

Provided a registered charity devotes substantially all its resources to charitable activities, it may engage in:

a. non-partisan political activities that are;

b.  ancillary and incidental to its charitable activities.

An activity is considered to be political if it:

• communicates a call to political action;

• communicates to the public that the law, policy, or decision of any level of government in Canada or a foreign country should be retained, opposed, or changed;

• indicates in its materials that the intention of the activity is to incite, or organize to put pressure in, an elected representative or public official to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country; or

• makes a gift to another qualified donee to support political activities.

Examples of prohibited conduct:

·         making public statements (oral or written) that endorse or denounce a candidate, or political party;

·         making resources available for the use of a candidate or political party;

·         publishing or otherwise disclosing the voting record of selected candidates or political parties on an issue;

·         distributing literature or voter guides that promote or oppose a candidate or political party explicitly or by implication; or explicitly connecting the charity's position on an issue to the position taken on the same issue by a candidate or political party; or

·         critiquing the performance of a candidate or political party (what they have or have not done).

For more on this subject, please see the CRA's policy on Political Activities, here:

https://www.canada.ca/en/revenue-agency/services/charities-giving/charities/policies-guidance/policy-statement-022-political-activities.html

 

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