Memorandum Of Association For Non Profit Organisation Template for Canada

The term memorandum of association comes from older corporate legislation. Under the modern Canada Not-for-profit Corporations Act (CNCA), federally incorporated non-profits use articles of incorporation and by-laws rather than a memorandum and articles of association. Some provincial societies acts still use the term memorandum of association (notably BC's older legislation), but BC's current Societies Act 2015 uses a constitution and by-laws structure.

A federally incorporated non-profit under the CNCA can operate across all of Canada under one registration and name protection. A provincially incorporated non-profit is governed by the relevant provincial legislation and may need to register as an extra-provincial non-profit if it operates in other provinces. Federal incorporation is generally preferred for organisations with a national mandate.

Not automatically. A non-profit corporation must apply separately to the Canada Revenue Agency for registered charity status under the Income Tax Act. Being incorporated as a non-profit is a prerequisite, but the organisation must also demonstrate that its purposes are exclusively charitable (relief of poverty, advancement of education, advancement of religion, or other purposes beneficial to the community) and that it meets ongoing CRA compliance requirements.

The founding documents must state purposes that are not for the financial gain of the organisation's members. Under the CNCA, purposes can be broadly defined but must be lawful and non-profit in nature. Organisations seeking registered charity status must ensure their purposes fall within the CRA's definition of charitable purposes. Overly vague or broadly stated purposes can cause issues on incorporation or charity registration.

A federally incorporated non-profit under the CNCA is governed by a board of directors elected by its members. The CNCA distinguishes between 'soliciting' corporations (those that receive public donations or government grants) and 'non-soliciting' corporations, with different requirements for financial statement review and member rights. A soliciting corporation must have at least three directors.

Members are the voting constituency of the non-profit; they elect directors and vote on fundamental changes such as amalgamations and dissolution. Directors are responsible for managing or supervising the management of the corporation's activities and affairs. The CNCA and most provincial statutes require by-laws to set out member and director rights, voting procedures, and meeting requirements.

Under the CNCA, directors of a non-soliciting corporation can be paid reasonable remuneration if authorised by the by-laws and approved by the members. Soliciting corporations (those receiving public donations or government funding) face stricter rules and may not be able to pay a majority of their directors. Registered charities have additional CRA restrictions on amounts paid to non-arm's-length persons.

A federally incorporated non-profit can be voluntarily dissolved by a special resolution of members under the CNCA, followed by filing articles of dissolution with Corporations Canada. On dissolution, any remaining assets must be distributed to another non-profit with similar purposes (for charities, to another registered charity) after paying creditors. Provinces have equivalent dissolution procedures for provincially incorporated organisations.