The incorporation of a not-for profit corporation involves a 4-step process:
Step 1: Corporate Name
- Select the proposed corporate name. The proposed corporate name should contain a distinctive and descriptive element. That is, the corporate name should not be deceptively similar to an existing name and should describe the nature of the corporate undertaking. The use of a legal element, such as “Corporation”, “Corp.”, “Incorporation” or “Inc.”, is optional.
- Select alternate corporate names in case the proposed corporate name is too similar to an existing name.
Step 2: Application for Incorporation for Issuance of Letters Patent
- Designate a head office in Ontario where corporate records are to be kept. It is not necessary for the corporation to own or lease property in its own name for this purpose.
- Identify at least three (3) first directors and provide residential addresses of each. The first directors act as the directors of the corporation until replaced by other individuals duly elected in their stead. A director should be prepared to assume the legal responsibilities and potential liabilities involved with the office of director.
- Define the objects of the corporation. The objects should be a broad (but not vague) statement of the purpose of the corporation and its primary undertakings.
- Define special provisions. Special provisions pertain to the governance of the corporation and the ancillary powers of the corporation. For example, distribution of assets, directors’ terms in office and directors’ remuneration may be specified in the special provisions.
- Please note that special provisions contained in the Letters Patent cannot be changed unless Supplementary Letters Patent are filed. Thus the incorporators should be relatively certain of the scope and content of special provisions to be included in the Letters Patent. Alternatively, corporate governance may be addressed in the by-laws, which are more easily amended.
- Define the terms of membership qualification. Membership qualification may be addressed in the Letters Patent or the by-laws, depending on the degree of flexibility required.
- Obtain consent if applicable. Government consent may be required where the organization uses a name that suggests a connection with the government, the corporation is subject to supervision by the government, Ministry or Agency or the corporation, or if financial assistance is sought from the government. If the organization already exists as an unincorporated association, a consent and undertaking may be required from the unincorporated association.
Step 3: Corporate Organization
- Adopt by-laws. After a director’s quorum has been established, by-laws pertaining to the general rules for operating the business and affairs of the corporation must be adopted.
- Establish banking arrangements.
- File required statutory notices.
Step 4: Ongoing Corporate Records and Filings
- Hold an annual meeting of members to elect directors and appoint auditors on an ongoing basis.
- Maintain proper records, including accounting records and a minute book containing the Letters Patent, by-laws, minutes of meetings, registers of directors and officers and other corporate documents.
- Submit statutory filings to the Ministry of Consumer and Commercial Relations on an ongoing basis.
How can you find out more information?
If you have questions or would like help organizing a not-for-profit company, or applying for charitable status for your not-for-profit corporation, we would be pleased to answer your questions and help you move forward.
Koby Smutylo, 613 869 5440, 866 661 9633 or firstname.lastname@example.org.