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Why Become a Non-Profit?

Incorporating gives an organization legal status. Non-profit organizations are not required to incorporate. Whether an organization decides to incorporate or not depends on its activities and the type of organization.

When a non-profit organization is incorporated it becomes a legal entity with virtually the same powers as an individual. An incorporated organization can enter into contracts, buy land, borrow money, hold bank accounts, etc., in its own name.

Advantages to incorporating include...

  • liability of the members and directors is limited (for example, they are not personally liable for debts of the corporation)
  • continuity of the organization is assured while the membership may change
  • a corporation can own property in its name regardless of membership change
  • ability to bring a legal action in its own name (an unincorporated body cannot)
  • likelihood of receiving government grants may increase because of the appearance of stability of the organization

An unincorporated association is created by an agreement between individuals, and has no legal status. The members are personally liable to the creditors for the full amount of any debts. An unincorporated body cannot sue or be sued; members must sue or be sued personally. Title to property must be in all the members' names if the group is not incorporated. This can make selling the property difficult.

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About PLEA

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