Nicolas Guevara-Mann | Queen’s Business Law Clinic | August 2021
Editor: Mikela Page
There are several similarities between not-for-profits (NFPs) incorporated under federal or provincial legislation. Both are incorporated without share capital, have members instead of shareholders, carry on activities without pecuniary gain, and are managed by directors; however, there are a few differences to consider to assist you with your decision as to which jurisdiction to incorporate under.
The Incorporation Process
The incorporation fee for a federal NFP is $200. The application can be done online and completed within a few business days. Provincial incorporation still requires the application to be sent through mail or in-person. The fee is $155 and the service time is 6-8 weeks.
Name Protection
Incorporating federally provides better Canada-wide name protection for your NFP. If your NFP plans to operate in other Canadian provinces or territories, incorporating federally will provide the best level of name protection. On the other hand, provincial name registration is simpler because there is no requirement to clear a national search registry and obtain approval from Industry Canada. If your NFP plans to only operate in Ontario, incorporating provincially may be easier.
Filing Requirements
Provincial incorporation combines both the tax and annual filing requirements into one form. This means that Ontario NFPs are responsible for only one filing per year which provides simplicity and may reduce legal and accounting fees. Federal NFPs must submit annual returns to Corporations Canada as well as a tax return to the Canada Revenue Agency each year. They must also provide provincial-related filings in the jurisdictions in which it is extra-provincially registered.
Registration
A federal NFP is required to register in their home
In conclusion, there are fewer filing and registration obligations accompanying a provincial NFP, but incorporating federally best protects the NFPs name. It is important to carefully consider the current activities and future goals of your NFP and seek legal advice before deciding how to incorporate.
Photo by Greg Rosenke on Unsplash
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