What is a Non Profit Entity?

A nonprofit entity, as the name suggests, is an organization where the owners or the shareholders do not get any profit. That is to say that the profit the organization makes or the surplus money that is present in such an entity will not be taken by its owners or its shareholders. Instead, the profits will be used for some other purpose like charity work or to pursue the goals of the organizations. Though most of the government companies come under this category, they are classified differently. It could be anything from a church to a school to a research institute to a museum to a professional organization to a medical provider to a voluntary service organization.

Canada has a large number of non profit entities. There are several rules which have been laid down by the government of Canada with regard to these non profit entities. So any organization which wishes to run as a nonprofit entity must adhere to the rules and regulations as stated by the government. The process involved is as follows. First, you will have to select and register the corporate name. The second step to set up such a entity would be to file the articles of incorporation with the appropriate government department.

If you want to be registered as a charitable organization, then the article should contain the clause to make it a nonprofit entity. And to gain the status of a charitable organization, one needs to apply to the Canada Customs and Revenue Agency. The entire process might take anything between 6 months to 18 months. It is not easy to get the charitable organization status as the applicants will be required to satisfy a number of criteria. The biggest advantage of getting the charitable organization status is that the organization will be in a position to give all its donors receipts for tax exemption. That is to say that anyone who donates money to a charitable organization will get tax exemption.
When one looks at the fee that has to be paid for the incorporation of these non profit entities, it varies from one place to another. In Ontario it is $155, in Alberta it is $175, in British Columbia it is $100, in Nova Scotia it is $35 and in Quebec it is $145...
The government of Canada has laid down rules with regard to the number of directors needed to form a nonprofit entity. The minimum number needed is 3. However, in British Columbia and Nova Scotia, the minimum number of directors needed to form a organisation is 5. It is very important to note that the directors of these non profit entities have to be individuals and not corporations.

As mentioned earlier, the organization should have a corporate name. Sometimes it would be required that the name end with Inc. or Incorporated or Corp. or Corporation, etc. So if you plan on starting such an organization, make sure you know all the rules properly and also make sure that you stick to them.

Add Your Comments:
Fields with * are required
Your Comment Below:
Enter Above Code
Note: Comments are moderated - Spam will be deleted

HOME | Contact | Disclaimer | About Us | Faqs | Discussion |