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					06/2010                                                          Corporate Administration


                      Registering the Organization

The Need
       Registering your not-for-profit organization may be advisable for a number of
       different reasons. If you have not registered the trademark of your name, another
       organization may legally register and operate under it, making use of the goodwill
       you have created. Banks will not open a bank account in the name of the
       organization unless it is registered. In addition, there may be financial advantages
       to registering, such as GST/HST and PST rebates or realty tax exemptions.


Considerations
       This section is less about policy than it is about when you should register and how
       to go about it. If your organization is already registered for business and tax
       purposes, you probably don’t need to read this section. Maintaining registration is
       covered in SPP NP 1.05 – Legal and Regulatory and in SPP NP 1.06 – Taxes
       and Charitable Returns.

       Levels of Registration
       Registration may be required for several very different reasons:
       • To protect rights to the name of the organization
       • To receive tax benefits (HST/GST, PST or income tax)
       • As required by law (for example, gaming licenses)

       There are various types of registration detailed below. They range from federal
       registration for trademarks, copyrights, charitable and HST/GST, to
       provincial/territorial registration for business names, gaming licences and PST or
       QST, to municipal registration for realty tax rebates. Registration of Internet
       domain names is also covered. Since registration regulations and procedures are
       different for different provinces/territories and municipalities, not all information
       links are provided here, but a phone call or quick Web-search will provide the
       information you require. (Incorporation of a not-for-profit is covered in the next
       section, SPP NP 1.02 – Incorporation and Bylaws.)

       Types of Registration
       Name registration places your organization’s name in the public record of the
       province or territory in which you operate. Every province and territory in
       Canada has its own laws and processes regarding business operations. If your
       organization is now operating or is intending to operate in more than one province
       or territory, you should register the name in all of them. Typically, this can be
       done via the Internet or at a government business centre (see links below, under
       Further Information). When you register the name, you will be given the
       opportunity to search the name on the existing public record to ensure that


Not-for-Profit PolicyPro                                                             1.01-i
Corporate Administration                                                                 06/2010


          another organization of that name doesn’t already exist. It is advisable to use a
          name that is not so close to the name of another organization that the two will be
          confused, but it is not illegal to register a similar name.

          You do have some protection under the law when you use your registered name,
          but a further level of protection is available through trademark registration (see
          SPP NP 1.05 – Legal and Regulatory). When your name is a registered
          trademark, you may have recourse should another party start to use your name for
          similar purposes and refuse to stop.

          Another form of name registration is domain name registration. If you have a public
          face, it is likely you will or will want to have a website that has an address linked
          to your organization’s name. Even if you do not have a plan for a website,
          consider registering the most common domains for your organization’s name. The
          cost is relatively minor compared to the heartache that comes when you realize a
          spammer or pornography site is using a domain name that sounds like your
          organization. For example, the Three Angels Church in a small town might want
          to register threeangels.ca, threeangels.com, and threeangels.org even if it does not
          intend to have a website, so that a web search doesn’t lead unsuspecting
          parishoners to a site containing somebody else’s idea of three angels! (See also
          SPP NP 1.07 – Information Technology.) Your registered domain name may
          also be used for emails: it is not difficult to arrange for emails sent to
          yourname@threeangels.org to be rerouted to your email account (such as
          rogers.com, gmail.com, etc.) This can help create a more professional and
          sophisticated public face for the organization.

          Be aware that once you register trademark or a domain name, it is likely that from
          time to time you will receive misleading items that look like invoices but on closer
          examination are solicitations to advertise in a directory or on a website. These are
          generally fraudulent and should be ignored.

          Sales tax registration is necessary if you are now selling or are planning to sell goods
          or services, even if not for profit. Regardless of whether you are registered, you
          must charge sales taxes on the goods and services you sell. You will also be paying
          HST/GST and perhaps PST or QST on goods and services you buy for your
          organization. If you are registered as a seller of goods, you will likely be able to
          claim some of the sales tax paid against sales tax collected. For GST or HST, if
          your revenues are less than $30,000 per year, you are not required to register, but
          this may not be true for your provincial PST. (See also SPP NP 4.03 –
          Expenses.)




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       There are two different types of income tax registration: business number registration,
       and charitable registration. Registering a business number is necessary if your
       organization is incorporated, if it plans to sell goods and services (more than
       $30,000) or pays employees. The business number is an account number with the
       Canada Revenue Agency (CRA) that is used in all transactions and
       correspondence with them.

       A not-for-profit organization may or may not be recognized as a charity. While no
       not-for-profit organization pays income taxes, being a registered charity for tax
       purposes also means that:
       • It is eligible for HST/GST rebates
       • It may issue official charitable receipts that are tax-creditable to its donors

       On the other hand, registered charities must file information returns, and some
       financial data about the organization becomes part of the public record and is
       easily available online.

       If you are not a registered charity, you cannot issue charitable receipts, and in
       many cases will not be eligible for HST/GST rebates, but you may still be exempt
       from income tax on all or most of the organization’s income (see also SPP NP
       1.06 – Taxes and Charitable Returns).

       In order to register as a charity, your organization must file Form T2050 detailing
       the purpose of the organization, its constitution or bylaws, its financial statements
       and its directors. The form and documents are then reviewed by the CRA. The
       following documents must be included with the application:
       • An official copy of the governing documents. These might be the letters
           patent of an incorporated organization; the trust deed that establishes the
           trust; or a simple constitution of an unincorporated association.
       • A statement of activities. The statement should be as detailed as possible, and
           if the organization has a number of separate programs, each should be
           described. The following questions should be answered: What exactly is this
           organization doing or planning to do? How is it trying to implement its
           announced purposes? Who are its beneficiaries (if any), and how are they
           selected? Will it be doing the work itself or contract with others to deliver the
           required services? How many employees or volunteers does it have? Where
           will it be active? What fees, if any, will it be charging its clientele? How does
           it intend to raise funds?
       • Financial statements. These normally consist of a statement of income and
           expenditures and a statement of assets and liabilities. They should be
           sufficiently detailed to show how the organization’s resources are being
           allocated. A new organization with no history may submit a budget showing
           projected revenues and expenditures, as well as assets and liabilities.



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Corporate Administration                                                               06/2010



          •   A list of the directors, trustees, or other similar officials who make up the
              charity’s elected or appointed governing body, giving the full name, address,
              and occupation for each.

          If your organization is an amateur athletics association that is national in scope,
          there is a special registration process with the CRA that parallels the charitable
          registration process.      The CRA distinguishes national amateur athletics
          associations from regular charities because national amateur athletics associations
          sometimes provide funding to their (internationally-competitive athlete)
          members, an activity specifically prohibited for charitable organizations.

          Most municipalities make some provision for exempting or discounting the
          municipal realty taxes for registered charities and in some cases registered not-for-
          profits. Typically, an organization must apply for this special status.

          If your organization wishes to raise money through lotteries, raffles, bazaars, bingos
          or break-open tickets it will need to register and obtain a gaming licence. Since
          lotteries and gaming are under provincial/territorial jurisdiction, you must register
          with provincial or territorial gaming commissions.




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06/2010                                                         Corporate Administration


Further Information
     keywords:     charitable registration, business number, not for profit
                       registration, gaming licence, tax rebate, business name
                       registration, trademark registration, copyright registration,
                       domain name registration, NUANS.

       websites:       The Canada Revenue Agency has considerable information
                       available at www.cra-arc.gc.ca/tx/chrts/menu-eng.html

                       CRA Application to Register a Charity Under the Income Tax
                       Act: www.cra-arc.gc.ca/E/pbg/tf/t2050/README.html

                       CRA guide, Registering a Charity for Income Tax purposes:
                       www.cra-arc.gc.ca/E/pub/tg/t4063/README.html

                       Business Registration online (CRA) www.cra-
                       arc.gc.ca/tx/bsnss/tpcs/bn-ne/bro-ide/menu-eng.html

                       Business Number (BN) Registration (CRA) www.cra-
                       arc.gc.ca/tx/bsnss/tpcs/bn-ne/menu-eng.html

                       The CRA website provides a link to provincial and territorial
                       government contacts for compliance with federal requirements
                       (other than the charities directorate of the CRA) at www.cra-
                       arc.gc.ca/tx/chrts/fdrl-eng.html, and provincial and territorial
                       requirements at www.cra-arc.gc.ca/tx/chrts/prvncs/menu-
                       eng.html.

                       Industry Canada links to resources for               not-for-profits:
                       www.ic.gc.ca/epic/site/ic1.nsf/en/h_00076e.html

                       Ontario Not-for-Profit Incorporator’s Handbook contains extensive
                       information, forms and references, and is available from the office
                       of the Ontario Attorney-General at
                       www.attorneygeneral.jus.gov.on.ca/english/family/pgt/nfpinc.

                       Service Alberta provides extensive information on incorporating
                       not-for-profit companies in Alberta at:
                       www.servicealberta.ca/index.cfm




Not-for-Profit PolicyPro                                                               1.01-v

				
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