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Types of Non-Profits

The main classes of corporations are business corporations and non-profit corporations. Within non-profits there are different types depending the purpose of the organization and the activities the organization will engage in.

A business corporation is formed to make a profit and to distribute the profit to its shareholders in the form of dividends. Business corporations are regulated by The Business Corporations Act which is administered by the Corporate Registry operated by Information Services Corporation (ISC).

A non-profit corporation, on the other hand, is formed to carry on activities for purposes other than personal financial gain. A non-profit corporation can earn a profit, but the profit must be used to further the goals of the group rather than to pay dividends to its membership. Most activities of a non-profit corporation are not of a commercial nature. Examples of non-profit corporations are sports groups, activity clubs, dance groups, daycares, and service groups.

The Non-profit Corporations Act, 1995 governs non-profit corporations in Saskatchewan. Non-profit corporations are also subject to all laws of contract, tort, employment standards, etc.

There are two types of non-profit corporations: membership corporations and charitable corporations. The different types have different responsibilities.

Membership Corporations

A membership corporation carries on activities that are primarily for the benefit of its members. It is supported by its members through fees, donations, loans, or any combination of these. Examples of membership corporations are golf clubs, social clubs, special interest organizations, daycares, etc.

Membership corporations:

  • are usually financed by members through membership fees, loans, fundraising
  • are primarily for the benefit of members
  • require at least one director
  • can have paid employees
  • can allow members to receive any remaining property if the corporation is dissolved
  • may invest its funds as directors think fit, subject to the limitations contained in any gifts and the articles or bylaws

Remember, both membership and charitable non-profits have members. A corporation is not a membership corporation just because it has members; a charitable corporation has members too.

Charitable Corporations

  • are usually financed by government grants, donations, public property
  • are primarily for the benefit of the public
  • require at least three directors
  • can have paid employees
  • cannot allow members to receive any remaining property if the corporation is dissolved
  • have restrictions on how they can invest their funds
  • have more stringent audit and financial review requirements

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PLEA gratefully acknowledges our primary core funder the Law Foundation of Saskatchewan for their continuing and generous support of our organization.