To be able to issue official donation receipts and to be exempt from taxation, the Income Tax Act requires that corporations created and operated exclusively for charitable purposes register with the Canada Revenue Agency (CRA) as charities. For insight on charitable purposes, see: How to draft purposes for charitable registration.
The act of incorporating as a not-for-profit corporation under the Not-For-Profit Corporations Act (Canada) or the Societies Act (British Columbia) does not mean that the corporation will automatically be tax-exempt or considered as a registered charity for the purposes of the Income Tax Act.
If your corporation intends to become a registered charity, read CRA’s Apply to become a registered charity before preparing your incorporating documents, particularly as it relates to the purposes of the corporation statement. It is important that this statement meet the CRA requirements to qualify for registration as a charity.
You should also know that if you need to change the purpose statement after incorporation to qualify for registration as a charity, changes to approved articles of incorporation could only be made through an amendment ― a separate fee-based service.
For a more comprehensive look at charity law in Canada, see our 2021 Charity Law Update.
If you have any questions or would like advice related to registered charities and charitable activities, or if you have questions in relation to matters of real estate, corporate law, intellectual property and trust matters, please contact us at 604-688-4900 or by email to Paul Barbeau at paul@barbeau.co or to Morgan Best at morgan@barbeau.co