Note: this is not legal advice. You are always cautioned to turn to a lawyer if you feel you need to (e.g. make a post on Dynamic Lawyers). I am only providing this information for educational purposes only.
Typically, interest groups will mobilize and need a formal legal structure through which to organize themselves and approach third parties. Having a formally incorporated not-for-profit Association adds credibility to your cause, but it also carries with it a lot of headache and paperwork.
A not-for-profit Association is a corporation that has members instead of shareholders (hence, it’s called a corporation without share capital) and it cannot distribute any profits to its members (unlike a corporation with share capital). These types of corporations are made for social, religious, charitable, etc. purposes and must use their resources only for those ends. At the end of the day, if the Association has the resources it needs, things will run smoothly. Otherwise, it can be a one-person show with countless volunteer hours poured into an unsustainable cause.
What follows is a brief overview of how I have gone about incorporating a not-for-profit Association in Ontario.
- Write a cover letter to the Ministry of Consumer and Business Services, indicating that you are filing an application to establish a not-for-profit corporation. You’ll need to include a completed Letters Patent application (this is the name of the document that creates the corporation, based on the Ontario Corporations Act), a NUANS name search report, and a cheque payable to the Minister of Finance (either $155.00 or $255 for expedited service). It usually takes 6-8 weeks to process a normal Letters Patent application or 7 business days for expedited service.
- Prepare for the first director meeting by drafting By Law No. 1. A By-Law is a power-giving document that defines the powers which the board of directors and the officers have, describes how director and member meetings are to happen, and deals with other procedural matters.
- Prepare the member registry and the director registry.
- Get a minute book and a corporate seal (this is optional).
- Have the first director meeting. At this meeting, the initial 3 directors of the Association will need to pass By-Law No. 1. This should be noted in the minutes of the meeting of the directors. Next, the directors should admit new members and fill in the membership registry and make a note of this in the meeting minutes.
- Next comes the membership meeting. Here, the members will approve of By-Law No. 1, elect new directors, and appoint an Auditor. These things should be noted in the meeting minutes for the members.
- After the member meeting is complete, the new directors will have another meeting. They will pass a resolution appointing officers (e.g. President, CEO, VP, Treasurer, etc.) and discuss the business and affairs of the Association.
- Keep in mind that you should fill in the director’s registry and file with the Ministry of Consumer and Business Services an Initial Return indicating who the new directors of the Association are.
- Finally, the officers of the Association can deal with banking and accounting matters, logos and business stationary, and determine whether the Association must register with the Ontario and Federal Governments for Income Tax Purposes.
Please note that each of these steps will involve a number of documents to be properly filled out (e.g. cover letter, Letters Patent Application, By-Law No. 1, Membership Registry, Director Registry, Meeting Minutes and Resolutions therein, etc.). You are advised, once again, to consult a lawyer (e.g. by making a post on Dynamic Lawyers) if you wish to have these things done for you.
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