How to Become a Non-Profit

An organization may incorporate federally or provincially. The decision about where to incorporate is generally based on the location of the organization. If the organization will carry on activities in more than one province under the same corporate name and wants to move its registered office around the country with ease, it can incorporate federally. A local organization that will remain in the community or province usually incorporates provincially. An organization that is incorporated federally may also be required to register provincially, depending on the nature of its activities in Saskatchewan. This information deals with incorporating a corporation provincially.

Similarities may exist for incorporating federally. For information on incorporating federally contact Corporations Canada.

One or more persons may incorporate a corporation. The individuals must be at least 18 years of age and mentally competent. They cannot be bankrupt. Applications are made to the Corporate Registry.

Regardless of how you apply there are certain steps and required information, as well as prescribed fees. If you are using the online application the applicable fees will be shown under the fees tab. If you are downloading the Incorporation Form to complete and submit you will need to go to www.isc.ca for the current fee schedule. The following outlines some information you will need and decisions you will have to make to be able to complete the incorporation process. This information should be collected and these decisions made before you start the process.

You must choose a name for your organization. There are some guidelines to keep in mind when choosing a name. The name must end with "Inc.", "Incorporated", "Incorporée", "Corp." or "Corporation." The name must also include a distinctive element to distinguish your organization from other organizations in a similar industry, as well as a descriptive element that explains the type of work you'll be doing.

If you are using the online application the system will assist you in determining if your name is acceptable and available. If you are downloading the forms you need to complete the Name Search and Reservation form.

If you are using the online application you will not be able to move forward until this step has been completed. If you are downloading the forms you can submit the Name Search and Reservation Form before you submit your application to incorporate or at the same time you submit your application. However, it is a good idea to confirm that you can use the name that you have chosen before going on to complete the application.

You will need Articles of Incorporation for your non-profit organization. The Articles of Incorporation identify the unique characteristics of each corporation.

The Articles must include...

• Corporation Name - See Reserve a Name for more information.

• Corporation Type - You must decide whether to incorporate as a membership or a charitable corporation. See Types of Non-profits for more information.

• Membership Class Information - It is only necessary to state "one class" of members if all members have the same rights and privileges, even if members have different titles, such as honorary members or founding members. However, if members have different privileges, the articles must state the different classes and the different rights and privileges of each class. For example, if certain members cannot vote on particular issues, those members form a different class.

• Authorized Number of Directors - A membership corporation can have just one director but a charitable corporation must have a minimum of three directors. Your articles may provide that the corporation must have a certain number of directors or set out the minimum and maximum number of directors your corporation can have. However, the articles cannot reduce the minimum number of directors required by law.

• Right to Transfer Membership Interest - If membership rights cannot be transferred this must be stated in the Articles

• Restrictions on Activities - If your organization is considering registration as a charity under the Income Tax Act the articles must restrict the activities of the corporation to what are considered charitable activities by the Canada Revenue Agency. If your organization is considering this it is a good idea to submit a draft of your articles to the CRA before deciding on how to word the purpose of your corporation and restrictions on activities. If there are no restrictions, that must be stated in the articles.

• Dissolution Provisions - A membership corporation must state whether any remaining property after dissolution will be transferred according to subsection 209(4) of The Non-Profits Corporation Act. This section provides that any remaining property will be distributed equally among the members. A membership corporation can also set out a different way for the remaining property to be dealt with in their Articles.
  • Any property remaining after a charitable corporation is dissolved cannot go to the members. A charitable corporation must state whether it will go to another charity (either a charitable corporation or a charity registered with the CRA), to a government (municipal, federal or provincial) or to a government agency. If this is not set out in the Articles a court order will be needed to deal with any remaining property.
  • If there are no provisions, that must be stated in the articles. See Dissolving a Non-Profit Corporation for information about the process and restrictions on where any surplus of a charitable corporation can go.
    

• Other Provisions - If there are any other matters that you want to have in your Articles these must be stated. If there are no other provisions, that must be stated in the articles. It is a good idea to keep the provisions in the articles to a minimum because, although they can be changed, there is a process that must be followed.

Some information from the Articles is required when completing the incorporation application. A signed copy of the Articles themselves must be submitted if there will be…

• more than one membership class
• rights to transfer membership
• any restrictions on activities
• provisions for dissolution

The Articles may be submitted by the incorporator or an individual authorized by the incorporator. They must be signed by the person submitting them and include their contact information. They must also include a statement that the contents are true and that the person indicated is the incorporator or an individual authorized by the incorporator.

Amendments to articles must be passed by a special resolution of the members of the corporation. A special resolution must be passed by at least two-thirds of the total votes at a general meeting. A vote to amend an article can only be held at a general meeting with at least 15 days’ notice to the members of the meeting and of the resolution to change the articles.

A corporation must have a registered office in Saskatchewan. It cannot be a post office box. The registered office is usually the place where the corporate records are kept. This includes things like minutes of meetings, financial records, membership lists and other information. If you do not want to receive mail at this address you can also register a mailing address. However, it is important to note that the final notice that you need to file your Annual Return will only be sent to the registered office.

When you apply to incorporate as a non-profit you must also list who the directors of the corporation will be. Together the directors form a board that has the overall responsibility for managing the activities and affairs of the corporation. Any mentally competent person who is at least 18 years of age and who is not bankrupt can be a director.

Membership corporations must have at least one director. Charitable corporations must have at least three directors and at least two of the directors must be someone who is not an officer or employee of the corporation. At least one director must live in Saskatchewan and at least 25% of the directors must be resident Canadians. If a non-profit has less than four directors, at least one director must be a resident Canadian. A director does not have to be a member of the corporation unless required by the corporation's bylaws.

If the corporation is a registered charity, there will be limits as to the degree that directors can be related to or affiliated with each other. You should check CRA guidelines for more information.

You must choose a date to be the corporation’s fiscal year-end. A corporation can set its own fiscal year-end. An annual meeting must be held within four months after the fiscal year-end to present the financial statements and the auditor's report to the membership. For example, if a corporation's fiscal year-end is March 31, an annual meeting must be held prior to July 31 of the same year.

The first fiscal year-end cannot be more than 14 months from the time of the application for incorporation. If the fiscal year-end in less than two months after the date of incorporation your first fiscal year-end must be the following year.

If you do not set an incorporation date, the date of incorporation will be when the Corporate Registry receives the properly completed forms and fees. If you wish, you can choose to set a date further in the future.