Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to Ontario Not-For-Profit Corporations, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto business lawyers registered on the website who can answer your questions, represent you in litigation, or help resolve a dispute.
Ontario not-for-profit corporations are a unique creature of statute. Their members are incapable of owning the association and cannot receive dividends (although they can receive proceeds from a winding up of the corporation – see s. 132(5) of the Ontario Corporations Act). Costs vary, but legal fees typically range from $500 (plus GST and disbursements of another $300-$400 or so) to upwards of $1500 (again, plus GST and disbursements of another $300-$400 or so). Why the difference in prices? Well, it all depends on what you’re getting. If you’re only getting some standard by-laws with no customization, it’s going to be cheaper. If, however, you need custom by-laws to, for example, comply with a municipal by-law and require expedited filing, then costs go up.
Remember: Ontario not for profit corporations are created under the Corporations Act. That Act, plus the letters patent, internal by-laws, resolutions, and other contractual obligations govern the business and affairs of the not-for-profit corporation.
One interesting issue that comes up is: how does one sell or transfer a not-for-profit corporation? Given that these are corporations without share capital, one way to transfer the interest in the corporation could be through a contract that basically gives the purchaser the ability to become a member, who in turn votes in the director(s), and who in turn appoints the officers. So ownership is really about who controls the corporation. From here, ways to get money out of the not-for-profit corporation include: employee salaries, director compensation, consulting fees, joint ventures with third parties, etc.
Remember:if you have any comments, questions, or concerns about Ontario not for profit corporations or associations, go to Dynamic Lawyers and make a post (it’s 100% free and anonymous). We have Toronto and Ottawa lawyers registered on the website who can answer your questions, represent you in litigation, or help resolve a dispute.
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