Non-profits must prepare a Financial Statement and complete an Annual Return each year and submit these to the Corporate Registry. If an audit or review is required this must be submitted as well.
Non-profit corporations need to prepare a Financial Statement for every fiscal year. After the end of the fiscal year, non-profit organizations have up to 6 months to create the Financial Statements so they can be presented at the Annual Meeting.
The Statement must include a statement of the assets and liabilities of the corporation in the form of a balance sheet and a statement of revenues and expenditures. It must be prepared in accordance with generally accepted accounting principles published by the Charter of Professional Accountants of Canada. There is no set form for Financial Statements. The Financial Statement must be signed by at least one director indicating the approval of the board.
Charitable corporations that solicit money or property from the public must have an audit committee. At least three directors must sit on the committee. The majority of the directors on the committee must not be officers or employees of the corporation. The committee reviews the Financial Statements before they are approved by the directors.
Notice that there will be a vote on the question of waiving an audit or review must be sent to all members. A resolution to waive an audit and/or a review is only valid until the next annual meeting of members.
Both membership and charitable corporations are required to have their Financial Statements audited unless the corporation comes within one of the exceptions.
A membership corporation can pass a resolution to not have its Financial Statements audited. If the membership passes such a resolution the corporation must then appoint a qualified person to review the corporation's Financial Statements unless a resolution is passed to dispense with this requirement. A resolution to not have Financial Statements audited and a resolution not to appoint a person to conduct a review must be passed by at least 2/3 of the members who vote on the resolution. Members who would not otherwise be entitled to vote can vote on these resolutions.
A charitable corporation must have an audit if its revenue exceeds $500,000 in the previous fiscal year. If the charitable corporation's revenue was between $100,000 and $499,999, it can pass a resolution to have a review instead of an audit. If the charitable corporation's revenue was less than $100,000 it may pass a resolution to not have an audit or a review. A resolution to not have an audit or to not have a review must be passed by 80% of the members who vote on the resolution. Members who would not otherwise be entitled to vote can vote on these resolutions.
If an audit is required, it is conducted by an auditor appointed at the annual meeting.
The auditor must be...
Whether an auditor is independent is a question of fact but there are situations where an auditor is assumed not to be independent. An auditor is not independent if they...
If an appointed auditor no longer meets the independence requirements they must resign immediately.
If there are problems with an auditor they can be removed by majority vote at a special meeting of the members and a new one can be appointed.
Auditors must be given notice of every meeting of the members and are entitled to attend at the corporation’s expense. At the meeting an auditor can speak on any issue related to the audit. Corporations must give the auditor access to financial records and any other information the auditor requires to do their job.
Auditors must present a statement on the finances of the corporation to the membership at the annual meeting. In this statement, the auditor verifies the accuracy of the financial records based on the information given to him or her. If the membership does not elect a new auditor at the annual meeting, the current auditor remains in that position for the next year.
Every corporation must file an Annual Return, along with a set fee, with the Corporate Registry. Non-profit corporations must also file Financial Statements with the Corporate Registry every year. If an audit or a review is required this must also be filed with the Corporate Registry. Corporations that fail to file an Annual Return can be struck from the registry.
The Annual Return and the Financial Statement must be filed no later than 7 months after the corporation's fiscal year-end.
Financial Statements must be filed no later than 30 days after the meeting at which the statement was presented. The Corporate Registry will send the Annual Return to the corporation at least a month before it is due. It will be sent by email if the corporation has registered an email address otherwise it will be mailed out.
If you have a Corporate Registry account you can file your Annual Return online by choosing `file your Annual Return or renewal`. You can also file your Financial Statement online by using the `financial statement’ tab, providing the required information and attaching a PDF of the Statements and audit or review (if required). If you do not have a Corporate Registry account you complete the Annual Return sent to you and attach your Financial Statement to this form.