Under ONCA, Can Not-for-Profit Corporations Waive Audit and Review Engagements?
Not-for-profit corporations play a crucial role in our society, serving various purposes, such as advancing education, promoting social welfare, and supporting religious activities. As these corporations operate in the public interest, specific legal requirements are in place to ensure accountability and transparency. One such requirement is the need for audit and review engagements.
The Ontario Not-for-Profit Corporations Act (ONCA) outlines the rules and regulations not-for-profit corporations must follow. Under ONCA, the possibility of waiving audit or review engagement requirements for not-for-profit corporations depends on factors like annual revenue and whether the corporation is a public benefit corporation under section 76 of ONCA.
An audit requirement can be waived for public benefit corporations with annual revenue between $100,000 and $500,000, but a review engagement is still necessary. If the income is $500,000 or more, an audit becomes mandatory.
Conversely, if the annual revenue is $100,000 or less, the audit and review engagement can be waived for public benefit corporations. It is important to note that these thresholds are subject to change in the future through regulation amendments.
To waive audit or review engagement requirements, an extraordinary resolution requiring approval by at least 80% of members is needed. This decision stays in place until the next yearly meeting. It is essential to follow the proper procedures and obtain the necessary approvals before waiving these requirements, as failure to do so can result in legal and financial consequences.
For other not-for-profit corporations not classified as public benefit corporations, those with annual revenue over $500,000 can waive the audit but must conduct a review engagement. The audit and review engagement can be waived if the income is $500,000 or less. Again, an extraordinary resolution is required in either case, valid until the next annual meeting of members.
In summary, not-for-profit corporations must consider their annual revenue and legal classification when deciding whether to waive audit and review engagement requirements. Following the proper procedures and obtaining the necessary approvals before making any decisions is essential.
By doing so, not-for-profit corporations can ensure accountability and transparency, strengthen public trust, and continue to serve their essential missions.
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
Book a Consultation with Northfield & Associates
Your Trusted Partner in International Bilateral Relations
At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.
Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.
Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.
Take the First Step Today
If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.
We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.
If you or anybody that you know, think that you meet the requirements and wish to receive further information.
We can help you start the application process and confirm eligibility requirements to participate.
We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.
Disclaimer:
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
Forward-Looking Information
This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.
Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Questions?
info@northfied.biz
Within Corporate Newsroom
Media Contact:
media@northfied.biz
Press contact
PR consultants press@northfied.biz
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.
Experienced Charity and Nonprofit Registration Team of Lawyers in Toronto, Ontario
At Northfield & Associates, we provide specialized legal services exclusively for charities and nonprofit organizations in Toronto, throughout Ontario, and across Canada. Our legal team comprised of charity and nonprofit lawyers and charity law clerks is dedicated to helping organizations of all sizes navigate the complexities of charity law and nonprofit governance. Whether you’re a newly established nonprofit or an established charity, we have the expertise and experience to support your legal needs.
Navigating Nonprofit Incorporation & Governance
Looking to set up a nonprofit in Ontario?
Deciding whether to incorporate as a nonprofit is a crucial step for many organizations. Our not-for-profit and charity lawyers help you understand the benefits and responsibilities associated with incorporation under the federal Canada Not-for-Profit Corporations Act or the Ontario Not-for-Profit Corporations Act, 2010. We guide you through the incorporation process, from drafting bylaws to setting up your governance structure, ensuring compliance with all relevant regulations.
We also assist organizations transitioning from unincorporated entities to incorporated ones, or moving incorporation from one jurisdiction to another, handling the transfer of assets, liabilities, and membership in accordance with legal requirements.
Ensuring Compliance & Effective Governance
Effective governance and regulatory compliance are critical for the success of any nonprofit or charity. At Northfield & Associates International Corporation we offer expert advice on nonprofit corporate governance and help you develop policies and procedures that meet legal standards and best practices for nonprofits. Our legal team has extensive experience assisting nonprofits across Ontario with the governance transition under the Ontario Not-for-Profit Corporations Act, 2010 (ONCA), ensuring a seamless adaptation to new regulatory frameworks.
Applying for Charitable Status in Canada
Need funding for your Ontario nonprofit? The best and quickest way to obtain funds to run your nonprofit is to register it as a charity. Obtaining charitable status is a key milestone for many organizations, allowing them to access new funding opportunities and offer tax receipts to donors. However, the application process to start and register a charity can be complex and challenging. Our nonprofit and charity lawyers in Markham and Toronto Ontario provide guidance on whether your organization qualifies for charitable status and assist you through the application and charity registration process with the Canada Revenue Agency (CRA) Charities Directorate. We stay up-to-date with the latest changes in regulations to ensure your application is complete and compliant. Our comprehensive, 100% Done For You charity registration service is all inclusive, covering everything from forming your nonprofit all the way through charity application, corresponding with the CRA Charities Directorate, and obtaining the Charity Number.
Comprehensive Legal Services for Charities & Nonprofits Across Ontario & Canada
At Northfield & Associates International Corporation, we understand that charities and nonprofit organizations face a wide range of legal challenges. Our full-service approach means we can assist with everything from contract negotiations and lease reviews to employment matters and real estate transactions. As our exclusive practice area is charities and nonprofit law, we can provide tailored legal solutions that consider the unique needs of the nonprofit and charity sector, helping you manage risks and operate efficiently.
We have been privileged to provide legal assistance to charity clients, philanthropists, donors, and socially minded corporations from all provinces and all major cities across Canada, including Vancouver, British Columbia, Toronto, Hamilton, Ottawa, Brampton, and Mississauga, Ontario, Winnipeg, Manitoba, Calgary and Edmonton Alberta, Montreal, Quebec, and Halifax, Nova Scotia, to register their charity, set up their nonprofit, create their foundation and ensure CRA-Charities Directorate and provincial Compliance.
Managing Compliance Risks and Resolving NPO Disputes
Proactive risk management is essential for preventing legal issues before they arise. Our team helps you identify potential risks and develop strategies to mitigate them. Should disputes occur, our experienced nonprofit lawyers and charity lawyers are prepared to represent you in all forms of conflict resolution, including mediation and administrative proceedings. We work diligently to protect your nonprofit’s interests and resolve disputes effectively.
Contact Northfield & Associates for Your Charity & Nonprofit Legal Needs
Northfield & Associates is committed to providing top-tier legal services to charities and nonprofit organizations in Toronto, across Ontario and Canad. Whether your nonprofit or charity needs help with registration, incorporation, governance, compliance, or any other legal matter, our experienced legal team is here to assist. Contact us today learn more about how we can support your organization.
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
Book a Consultation with Northfield & Associates
Your Trusted Partner in International Bilateral Relations
At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.
Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.
Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.
Take the First Step Today
If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.
We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.
If you or anybody that you know, think that you meet the requirements and wish to receive further information.
We can help you start the application process and confirm eligibility requirements to participate.
We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.
Disclaimer:
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
Forward-Looking Information
This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.
Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Questions?
info@northfied.biz
Within Corporate Newsroom
Media Contact:
media@northfied.biz
Press contact
PR consultants press@northfied.biz
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.
Disclaimer: The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
At Northfield & Associates our expert teams guidance on compliance requirements. Our team understands Canadian law and can help ensure your organization follows proper procedures.
To discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.
READY FOR BETTER NONPROFIT REPORTING?
At Northfield & Associates, we have a team of professional bookkeepers and accountants to help your organization manage the books so that you can breeze through tax season.
We’re often asked by prospective clients what our Bookkeeping service. People want to know what specific tasks we do, and what their responsibility is. This brief explainer page will answer that question. This is by no means an exhaustive list, but covers the most frequently asked questions.
Getting Started
Review your existing books for needed corrections or back-work
Chart of accounts setup or amendment
Assistance with setting up bank feeds
Limited assistance* with setting up payroll (QBO or Gusto only)
Your books brought current and reconciled if needed
Ongoing Monthly Bookkeeping
After-the-fact transaction recording
Post to general ledger
Post to other ledgers (as needed)
Bank account reconciliation
Monthly financial statements
Other bookkeeping services, as required
Best-practice bookkeeping advice and counsel
Year End
Assistance with 1099-NEC preparation*
Assistance with 1099-MISC preparation*
Year-end financial statements and period-end closing
What We Don’t Do
Pay bills
We do not offer bill-pay services at this time, nor do we manage Accounts Payable (AP) or Accounts Receivable (AR).
Payroll tax responsibility
Our bookkeepers can assist you in setting up your initial payroll service in QBO or Gusto. We are not responsible for entering payroll hours/salary, accruing payroll taxes, nor the transmittal of payroll taxes to the IRS or the state. Your full-service payroll provider (QBO, Gusto, or whatever other service a client uses) will be the responsible party for payroll and payroll tax compliance.
*Payroll deductions and benefits
We provide assistance with setting up a payroll account in either Quickbooks Online or Gusto, including entry of employee data. We do not assist in state registrations, benefits, or advise on deductions. Those service areas are provided directly by either QBO or Gusto.
Preparation of W2s
Similar to the last item, your full-service payroll provider (QBO/Gusto) is responsible for preparation of Form W2 for employees.
Sales tax reporting
For those nonprofits that sell taxable goods and/or services, your bookkeeper will assist in accounting for sales taxes collected and transmitted, but we do not prepare state sales tax reports.
Donation recording
We do not provide individual donation data entry into your neither your donor CRM nor Quickbooks Online, nor do we prepare year-end donor acknowledgements.
Administrative tasks
We cannot provide administrative services unrelated to our bookkeeping function.
Attend board meetings
Due to the constraints of time and distance, we are unable to be present, physically nor virtually, at a meeting of a client’s board of directors.*May incur additional fee per 1099-NEC or 1099-MISC.
Let’s Collaborate & Make a Difference!
Partner with us to amplify your mission. Whether it’s Charity accounting, financial transparency, or strategic growth—we’re here to help you create meaningful impact. Let’s work together to build a better future!
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
Book a Consultation with Northfield & Associates
Your Trusted Partner in International Bilateral Relations
At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.
Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.
Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.
If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your free consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.
We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.
If you or anybody that you know, think that you meet the requirements and wish to receive further information.
We can help you start the application process and confirm eligibility requirements to participate.
We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.
BOOK A CONSULTATION TODAY
Contact Northfield & Associates today to schedule a consultation with an experienced Consultant.
Northfield & Associates is a Canadian consulting firm based in Toronto, Canada. Northfield & Associates specializes in all types of immigration matters, from spousal sponsorships to refugee board appeals. With over eight (8) years of experience and an excellent success rate, Northfield & Associates is recognized as one of Canada’s premier immigration consulting firm.
The purpose of the Free Assessment is to assess whether you are qualified to apply for permanent residence in Canada under the Family Sponsorship, Skilled Worker, or Business Class categories. Please choose which category you would like to be assessed under and complete all fields in the form. We will endeavor to complete your assessment and provide you with a reply within one business day. There is no charge for this service. All information provided will be kept strictly confidential. If our assessment indicates that you are qualified for immigration to Canada, we will contact you to provide further information about our services and fees. Start Your Immigration Application!
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
NORTHFIELD & ASSOCIATES in Canada
As a global consulting firm, Northfield & Associates helps clients with total transformation, driving complex change, enabling organizations to grow, and driving bottom-line impact.
Learn about our offices in Canada, read our latest thought leadership, and connect with our team.
This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.
Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Questions?
info@northfied.biz
Within Corporate Newsroom
Media Contact:
media@northfied.biz
Press contact
PR Secretary press@northfied.biz
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.
What are Canada’s guidelines for business activities by charities, and how do they compare to charitable, fundraising, and investment activities?
Understanding Business Activities for Charitable Organizations in Canada
Charitable organizations (excluding private foundations) are permitted to engage in business activities, which can serve as a significant source of income. Nonetheless, these activities are subject to specific restrictions and must comply with the regulations established by the Canada Revenue Agency (CRA).
Guidelines governing business activities
Provided that it is a related business, a registered charity (excluding private foundations) is permitted to engage in business activities. A related business refers to:
A business where substantially all of the individuals participating are volunteers, or
A business that is associated with and dependent on the charitable purpose of the organization.
A business can be classified as a related business if “substantially all” of the individuals participating are volunteers. For instance, suppose a local community theater (run by a charity) employs two full-time staff members, an artistic director, and a marketing manager, along with 25 volunteer ushers, performers, and backstage crew members. In this case, there are 27 people involved in the theater’s operations, and the volunteers represent approximately 93% of the total headcount. Consequently, as most individuals participating in the community theater are volunteers, it can be deemed a related business.
For a business to be associated with a charity’s objective, it must have a direct correlation to that objective. Four different types of connection or linkage to charitable purposes exist:
Supplementary business activities that support charitable activities. These activities are essential for the efficient functioning of charitable operations or for enhancing the quality of services provided by the charity. For instance, a community center offers fitness classes and charges a fee for access to the gym to support its charitable goal of promoting healthy living.
By-product business activities that stem from charitable activities. The charitable operation produces goods or services that can be subsequently sold. For example, an animal shelter makes and sells pet food as a by-product of its charitable activity of caring for animals.
Excess capacity business activities that utilize the unused resources of a charity. For example, a non-profit daycare center offers its facilities and staff to rent after hours to host children’s birthday parties.
The sale of promotional items that support the charity or its mission. For example, a breast cancer foundation sells pink ribbon merchandise to raise awareness and support for breast cancer research.
Tip: Organizations planning to establish a “Social Enterprise” should ensure that the regulations concerning business activities are applied to these endeavors.
Comparison to charitable activities
Although numerous activities generate revenue for a charity, merely doing so doesn’t classify the activity as a business activity. Displayed in the following table are a few distinctions between charitable activities and business activities.
Charitable Activity
Business Activity
Charities aim to finance all or a portion of a program’s expenses through fee arrangements.
Businesses devise arrangements to generate income.
Charities established fees with a charitable intention, such as taking into account a user’s ability to pay.
Businesses establish fees with a market-driven objective, aiming to remain competitive with over companies.
Charities provide products or services to their intended recipients that might not be readily accessible to them through regular market channels.
Business typically provide products or services comparable to others previously existing in the marketplace.
Comparison to fundraising activities
The act of soliciting donations is not classified as a business activity since donors contribute to a charitable purpose without expecting anything in return.
Most fundraising events, however, are considered business activities as they often possess commercial characteristics. For example, events like concerts, dinners, and sporting tournaments share similarities with for-profit entertainment offerings.
Nevertheless, some events exhibit more features of a fundraising activity rather than a business activity. Furthermore, fundraising events, even if they are considered business activities, may not necessarily be subject to relevant business regulations if they do not qualify as “carrying on a business.” The CRA evaluates each fundraising event on a case-by-case basis. If a charity organizes similar events repeatedly throughout the year, the CRA may evaluate them collectively and determine that their recurring nature qualifies as carrying on a business.
Fundraising Activity/Event
Business Activity
Volunteer contribute a substantial amount of work, and numerous supplies are donated.
Work is carried out by compensated employees, and materials are procured through purchase.
The activity usually appeals to, or serves, supporters, who are aware of the charitable purpose and the work carried out by the charity.
The activity usually appeals to customers who evaluate the services from a commercial perspective and seek the best value at the most reasonable price.
Fundraising events have a distinct start and end ponit.
Business generally operate continuously or and ongoing basis.
Charities often hold various types of fundraising events that do not usually repeat throughout the year.
Businesses tend to host identical or nearly identical event on a frequent and regular basis throughout the year.
Comparison to investment activities
Charities frequently generate investment income, whether from excess funds, endowments, or other assets designated to support charitable endeavors. Although both business and investment activities generate income from assets, investment activities are often passive in nature, involving asset ownership.
Outlined in the following table are several distinctions between investment activities and business activities.
Unlike investment activities, earning income from business ventures necessitates an active role in operating the enterprise.
Investment Activity
Business Activity
Assets including saving accounts, Guaranteed Investment Certificates (GICs) bonds, and other securities are usually involved.
Involves assets such as machinery, equipment, buildings, and other productive resources used to create goods or services that are sold.
Ownership, such as receiving interest or dividends, leads to the generation of income.
Generates income through trading assets actively or operating and exploiting assets creatively to create goods or services that are sold.
Passive income, such as receiving interest or dividends, is earned.
Active participation in business operations is necessary to generate income.
Conclusion
Understanding whether your charitable organization can operate a business and ensuring it complies with CRA regulations requires careful analysis of your specific circumstances. The distinctions between related businesses, fundraising activities, and investment income can be complex, and missteps could jeopardize your charitable status. If you’re considering launching a social enterprise, expanding your revenue streams, or simply need clarity on what activities are permissible for your organization, professional legal guidance is essential.
At Northfield & Associates, we specialize in helping Canadian charities navigate the intricate rules surrounding business activities and CRA compliance. Our team understands the nuances of what constitutes a “related business” and can provide strategic advice tailored to your organization’s mission and goals. Whether you’re establishing a new venture or reviewing existing operations, we’re here to ensure your charity operates within the law while maximizing its impact.
Don’t leave your charity’s compliance to chance. Contact us today
At Northfield & Associates our expert teams guidance on compliance requirements. Our team understands Canadian charity law and can help ensure your organisation follows proper procedures.
Canadian charities often ask us about running businesses and following CRA rules. Here are answers to common questions about charity business activities and legal requirements.
Can a charity own a for-profit business in Canada?
Yes, but only if it’s a “related business.” This means the business must be run mainly by volunteers or directly support the charity’s goals. For example, a job-training charity could run a café where clients learn work skills. Owning an unrelated business could risk your charitable status, so get legal advice first.
Can a for-profit business own a nonprofit?
No. Nonprofits and charities don’t have owners like regular businesses. They’re controlled by a board of directors who must act in the organization’s best interest. However, a for-profit business can donate to a charity, partner with one, or have representatives on the board.
What is the difference between a charity and a nonprofit in Canada?
All charities are nonprofits, but not all nonprofits are charities. Charities must have specific purposes like relieving poverty or advancing education, and they can issue tax receipts. Nonprofits include sports clubs and social groups but cannot issue tax receipts. Both types don’t distribute profits to members.
Is it legal for charities to run commercial businesses?
Yes, but only “related businesses.” The business must be run mostly by volunteers or directly support the charity’s purposes. For example, a hospital charity can run a volunteer-operated gift shop. Running an unrelated business could cause the charity to lose its status.
Can a charity legally become a business?
A charity cannot become a for-profit business and keep its charitable status. To become a business, it must give up its charitable registration, lose its ability to issue tax receipts, and pay regular taxes. However, charities can operate business activities alongside their charitable work if those activities are related to their mission.
Ready for better nonprofit reporting?
At Northfield & Associates, we have a team of professional bookkeepers and accountants to help your organization manage the books so that you can breeze through tax season.
We’re often asked by prospective clients what our Bookkeeping Service covers? People want to know what specific tasks we do, and what their responsibility is. This brief explainer page will answer that question. This is by no means an exhaustive list, but covers the most frequently asked questions.
Getting Started
Review your existing books for needed corrections or back-work
Chart of accounts setup or amendment
Assistance with setting up bank feeds
Limited assistance* with setting up payroll (QBO or Gusto only)
Your books brought current and reconciled if needed
Ongoing Monthly Bookkeeping
After-the-fact transaction recording
Post to general ledger
Post to other ledgers (as needed)
Bank account reconciliation
Monthly financial statements
Other bookkeeping services, as required
Best-practice bookkeeping advice and counsel
Year End
Assistance with 1099-NEC preparation*
Assistance with 1099-MISC preparation*
Year-end financial statements and period-end closing
What We Don’t Do
Pay bills
We do not offer bill-pay services at this time, nor do we manage Accounts Payable (AP) or Accounts Receivable (AR).
Payroll tax responsibility
Our bookkeepers can assist you in setting up your initial payroll service in QBO or Gusto. We are not responsible for entering payroll hours/salary, accruing payroll taxes, nor the transmittal of payroll taxes to the IRS or the state. Your full-service payroll provider (QBO, Gusto, or whatever other service a client uses) will be the responsible party for payroll and payroll tax compliance.
*Payroll deductions and benefits
We provide assistance with setting up a payroll account in either Quickbooks Online or Gusto, including entry of employee data. We do not assist in state registrations, benefits, or advise on deductions. Those service areas are provided directly by either QBO or Gusto.
Preparation of W2s
Similar to the last item, your full-service payroll provider (QBO/Gusto) is responsible for preparation of Form W2 for employees.
Sales tax reporting
For those nonprofits that sell taxable goods and/or services, your bookkeeper will assist in accounting for sales taxes collected and transmitted, but we do not prepare state sales tax reports.
Donation recording
We do not provide individual donation data entry into your neither your donor CRM nor Quickbooks Online, nor do we prepare year-end donor acknowledgements.
Administrative tasks
We cannot provide administrative services unrelated to our bookkeeping function.
Attend board meetings
Due to the constraints of time and distance, we are unable to be present, physically nor virtually, at a meeting of a client’s board of directors.*May incur additional fee per 1099-NEC or 1099-MISC.
Let’s Collaborate & Make a Difference!
Partner with us to amplify your mission. Whether it’s Charity accounting, financial transparency, or strategic growth—we’re here to help you create meaningful impact. Let’s work together to build a better future!
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
Your Trusted Partner in International Bilateral Relations
At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.
Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.
Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.
Northfield & Associates
Advancing Global Partnerships, Together.
Take the First Step Today
If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.
Disclaimer: The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.
If you or anybody that you know, think that you meet the requirements and wish to receive further information.
We can help you start the application process and confirm eligibility requirements to participate.
We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.
Book a Consultation Today
Contact Northfield & Associates today to schedule a consultation with an experienced Consultant.
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
Forward-Looking Information
This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.
Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Questions?
info@northfied.biz
Within Corporate Newsroom
Media Contact:
media@northfied.biz
Press contact
PR consultants press@northfied.biz
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.
Is Your Organization a Public Benefit Corporation under ONCA?
Being recognized as such can bring numerous benefits, including enhanced credibility, increased public trust, and potential tax advantages. There are two categories of Public Benefit Corporation:
1. Charitable Corporation: These corporations are automatically considered public benefit corporations as they are committed to philanthropic activities.
2. Non-Charitable Corporation: This category applies to corporations that make a substantial financial contribution to society, receiving over $10,000 through external donations, gifts, or grants in a financial year. This threshold underscores the importance of your organization’s financial impact on the well-being of society, thereby qualifying you as a public benefit corporation.
Regarding recognition, the timelines are as follows:
1. Non-Charitable Corporation: The following year, recognition as a public benefit corporation is obtained after surpassing the specified amount. This acknowledges the corporation’s continued dedication to public benefit activities.
2. Upon Dissolution: A non-profit assumes public benefit corporation status if it meets the Ontario Not-for-Profit Corporations Act (ONCA) criteria during the year of Dissolution or in any of the preceding three years. This recognition endorses the organization’s lasting impact and commitment and ensures that its assets are used for a public benefit upon Dissolution, furthering its philanthropic mission.
Understanding the status of your non-profit is essential. If your organization does not meet the ONCA criteria, it may not be recognized as a Public Benefit Corporation, which could have implications for its ability to receive certain tax benefits or access certain funding opportunities. Therefore, it is crucial to check thefinancials, review the criteria, and ensure your organization meets the regulations.
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
Book a Consultation with Northfield & Associates
Your Trusted Partner in International Bilateral Relations
At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.
Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.
Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.
Take the First Step Today
If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.
We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.
If you or anybody that you know, think that you meet the requirements and wish to receive further information.
We can help you start the application process and confirm eligibility requirements to participate.
We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.
Disclaimer:
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
Forward-Looking Information
This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.
Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Questions?
info@northfied.biz
Within Corporate Newsroom
Media Contact:
media@northfied.biz
Press contact
PR consultants press@northfied.biz
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.
What is a Public Benefit Corporation and How Does It Affect Charities and Nonprofits in Canada?
Starting a charity or nonprofit in Canada comes with a lot of legal decisions. One of the options you might consider is thePublic Benefit Corporation (PBC). If you’re wondering what exactly this structure means and how it can benefit your organization, you’re not alone. Many charities and nonprofits choose this route because it aligns with their mission of helping the community.
In this article, we’ll break down what a Public Benefit Corporation is, why it’s a great option for some charities and nonprofits, and how it differs from other types of organizations. We’ll also touch on how it can affect your charity’s operations and financials.
In Canada, Public Benefit Corporations are often chosen by charities and nonprofits because their goals align with the mission of serving the public good. This structure is available under different legal frameworks, including the Ontario Not-for-Profit Corporations Act (ONCA) and the Canada Not-for-profit Corporations Act (CNCA). A PBC is essentially a nonprofit corporation but with a clear focus on serving the public.
Why is the Public Benefit Corporation Important for Charities and Nonprofits?
For organizations dedicated to making a difference, a PBC offers several key benefits:
Clear Focus on Public Benefit: The core of a PBC is to provide a benefit to the public. This means that everything the organization does is designed to help the community—whether it’s addressing a social issue like poverty or environmental conservation.
Increased Accountability: Public Benefit Corporations are required to be transparent about how they operate and how their activities benefit the public. This accountability helps build trust with donors, supporters, and the public. It ensures that the organization stays true to its mission.
Legal Protection for Directors: If you’re on the board of a charity or nonprofit, the legal structure of a PBC can protect you. As long as you’re acting in the public’s best interest and following the organization’s guidelines, you won’t be personally liable for decisions made by the organization. This makes it easier to recruit volunteers and directors without the fear of personal legal consequences.
Tax Exemptions: Like other nonprofits, PBCs can qualify for certain tax exemptions, which can free up more money to put towards programs that benefit the public. These exemptions help ensure that more of your resources are focused on your cause, not taxes.
How Does a Public Benefit Corporation Differ from Other Nonprofit Structures?
It’s important to know how a Public Benefit Corporation compares to other types of nonprofit organizations in Canada. While they all share the goal of not making a profit for personal gain, the focus and requirements of a PBC make it unique.
Nonprofit Corporations: A nonprofit organization is any entity that doesn’t aim to make a profit for its members. However, a nonprofit doesn’t necessarily have to demonstrate a direct public benefit in the same way that a PBC does. A nonprofit can serve a variety of purposes, but a PBC must be specifically designed to benefit the public.
Charitable Organizations: Charities are a type of nonprofit that focuses specifically on charitable purposes, such as poverty relief or educational programs. Charities in Canada must be registered with the Canada Revenue Agency (CRA) to access tax exemptions. While a PBC also serves the public, it doesn’t always qualify as a registered charity. Therefore, it might not receive the same tax benefits as registered charities do.
What Are the Legal Requirements for Public Benefit Corporations?
To operate as a Public Benefit Corporation in Canada, there are several legal requirements your organization must meet. These requirements ensure that the PBC stays true to its mission and fulfills its responsibility to the public.
Demonstrating Public Benefit: A PBC must show that its activities directly benefit the public. This means your organization needs to have clear goals related to improving the community or addressing social issues, and you will need to demonstrate how your activities are making a real difference.
Transparent Governance: PBCs must have a solid governance structure, including a board of directors. You’ll need to regularly report on your activities and provide updates on how your organization is fulfilling its mission. Transparency is key to maintaining trust with your supporters and funders.
Legal Compliance: Whether you’re governed by the Ontario Not-for-Profit Corporations Act (ONCA) or the Canada Not-for-profit Corporations Act (CNCA), a PBC must comply with specific rules and regulations. This includes ensuring that your organization’s activities align with its mission and the legal framework under which it operates.
Protecting the Public’s Interest: A PBC must always act in the public’s best interest. If the organization fails to meet the public benefit standard, it can face legal consequences, including losing its PBC status.
Why Choose a Public Benefit Corporation?
If you’re running a charity or nonprofit, a Public Benefit Corporation might be the best structure for your organization. Here are a few reasons why:
A Strong Public Benefit Focus: If your organization is focused on helping the community, a PBC can help clarify your mission and make sure everything you do supports the public good.
Increased Credibility: Operating as a PBC can enhance your credibility. It shows that your organization is serious about its mission and committed to transparency and accountability.
More Funding Opportunities: Donors and grant-makers prefer to support organizations that have clear public benefits. A PBC structure can open up more opportunities for funding, helping you grow and expand your programs.
Legal Protection: The legal protections offered to directors and officers can make it easier for people to get involved in running your organization without worrying about personal legal risks.
The Public Benefit Corporation (PBC) structure is a powerful tool for charities and nonprofits in Canada. By focusing on the public good, ensuring accountability, and complying with legal requirements, PBCs help organizations achieve their mission while building trust with the community. Whether you’re just starting your nonprofit or considering a change to your existing structure, understanding the benefits of a PBC can help guide your decision-making process.
Governance, Accountability, and Transparency in Public Benefit Corporations
Public Benefit Corporations (PBCs) in Canada follow strict governance and transparency rules to serve the public interest. Their management balances the needs of all affected parties, with clear reporting and accountability to maintain trust.
Stakeholder Versus Shareholder Approach
Unlike traditional corporations focused only on shareholders, PBCs prioritize stakeholders. These include employees, community members, donors, and beneficiaries.
Decision-makers consider the broader impact of actions, not just financial returns. Directors must balance economic goals with social or environmental missions.
This approach requires weighing diverse interests fairly. It can lead to more sustainable and ethical operations.
PBCs are accountable for how their decisions affect these groups. This maintains the focus on public benefit rather than profit alone.
Board Composition and Independence
Boards of PBCs include individuals with expertise in governance, law, finance, and the corporation’s mission. An independent board is key to unbiased oversight and mission alignment.
Directors act in the public’s best interest, not personal gain. Independence from management prevents conflicts of interest and supports strong decision-making.
This increases confidence among donors and other stakeholders. Legal frameworks in Canada require clear governance structures and specify board responsibilities, including managing risks and ensuring the corporation meets its public benefit goals.
Transparency and Reporting Requirements
Transparency helps PBCs maintain public trust. These corporations must regularly publish reports about their activities and outcomes related to their public benefit mission.
Reporting includes financial statements and impact assessments. This allows stakeholders to verify that resources are used effectively and activities meet stated goals.
Specific laws may require filing reports with government bodies. These reports show compliance with regulations and an ongoing focus on serving the public.
Regular reporting enhances credibility and supports funding by providing clear evidence of the organisation’s work and impact.
Criteria and Thresholds for Canadian Public Benefit Corporation Status
Public benefit corporations (PBCs) in Canada must meet specific rules based on their purpose and financial activities. These rules affect how charities and nonprofits are recognized and how they must operate, especially around funding sources and governance.
Charitable Versus Non-Charitable Corporations
Charitable corporations automatically qualify as public benefit corporations due to their public good purpose. They must provide tangible benefits to the public, often through activities like education, health, and poverty relief.
Non-charitable nonprofits can become PBCs if they meet financial thresholds or other criteria. Their activities must also serve public interests, but they do not have the same automatic status.
The distinction affects governance, such as limits on board members who are also employees. For charities, employee directors are generally prohibited unless special court approval is obtained.
Funding and Donation Thresholds
Non-charitable nonprofits become PBCs if they receive more than $10,000 in donations or gifts from public sources in a fiscal year. This includes government grants, funds from agencies like the Ontario Trillium Foundation, and donations from unrelated individuals or organizations.
Funding from public sources does not include fees paid for services or goods, such as meal payments or advertising.
If a nonprofit crosses this $10,000 threshold in a year, it becomes a public benefit corporation from the next financial year. This triggers stricter rules on financial reporting and asset distribution.
Determining Status and Regulatory Implications
Nonprofits track their funding each year to determine if they qualify as PBCs. If they qualify, they must follow particular regulations:
At least two-thirds of directors cannot be employees.
Charitable PBCs must distribute assets on dissolution to another registered charity or government body.
Non-charitable PBCs must distribute assets to another PBC, government, or municipality, never to members.
These rules govern financial audits, reporting, and how the organisation’s assets are handled. If a nonprofit was a PBC in any of the prior three years, it must follow PBC rules if it closes.
This framework ensures transparency and protects the public interest in organisations funded by public or community resources.
Impacts of Public Benefit Corporations on Charities and Nonprofits
Public Benefit Corporations influence how charities and nonprofits operate through legal and operational standards. These standards affect collaboration with other groups and the handling of assets if the organization closes.
Partnerships and Collaboration Opportunities
Public Benefit Corporations (PBCs) can build strong partnerships with governments, nonprofits, and community organizations. Their clear focus on public benefit makes them attractive partners for joint projects or funding.
PBCs must show public benefit and transparency, which helps them gain trust from potential partners. This accountability can lead to increased access to grants and shared resources.
Some charities might prefer to work only with registered charities for tax reasons. Still, PBCs that meet public funder requirements can fully participate in partnership opportunities.
Asset Distribution and Winding Up Rules
When a Public Benefit Corporation dissolves, it must follow strict rules for handling its assets. The organization cannot distribute assets for private gain.
Assets must go to other charities or nonprofits with similar public benefit goals. These rules protect public resources and ensure the organization’s legacy continues to serve the community.
This process differs from some nonprofit structures, which may have less defined asset distribution requirements. Charities and nonprofits forming or converting to a PBC should understand these obligations to avoid legal issues.
Proper planning ensures assets remain dedicated to the public good.
Examples, Industries, and Future Trends
Public Benefit Corporations (PBCs) shape various sectors in Canada by blending social or environmental goals with business practices. Their impact appears in notable organizations, key industries, and the growth of social enterprises backed by investors.
Notable Public Benefit Corporations
Several high-profile companies balance profit with purpose using the PBC model. For example, Patagonia is well known for its strong environmental mission, focusing on sustainability and conservation while remaining profitable.
OpenAI, although not a traditional PBC, follows a similar ethos by promoting ethical advancements in artificial intelligence for public use. Many PBCs emphasize transparency and social responsibility.
They often work towards goals such as environmental sustainability, health and wellness, or social equity. These organizations attract impact investors who seek measurable social or environmental benefits alongside financial returns.
Key Sectors and Missions
PBCs often operate in sectors where public benefit aligns with business success. Key industries include:
Environmental sustainability: companies reducing carbon footprints or preserving natural resources.
Health and wellness: organizations promoting better healthcare access or healthier lifestyles.
Social equity: firms creating opportunities for underrepresented groups or addressing social justice issues.
This focus allows PBCs to attract venture capital geared toward ethical investing. Their missions go beyond profits and focus on creating long-term, positive community impacts through responsible corporate governance.
Potential Influence on Social Enterprise in Canada
The PBC model encourages innovation within the Canadian social enterprise sector. By clearly committing to public benefit, these corporations bridge the gap between nonprofit goals and business strategies.
This structure appeals to investors who want both financial and societal returns. PBCs may drive more funding into social enterprises by proving that impact-driven companies can be financially viable.
This creates opportunities for Canadian businesses to lead in ethical markets, especially in areas like clean technology, health innovation, and social inclusion. The combination of transparency, accountability, and public focus positions PBCs to expand the role of impact investing and shape the future of charitable and nonprofit work.
Conclusion
If you’re interested in setting up a Public Benefit Corporation or need help with the legal side of starting a charity in Canada, consulting with a Charity and ONCA Lawyer can provide valuable guidance. The right legal advice can help ensure your organization operates smoothly and effectively, so you can focus on making a positive impact.
At Northfield & Associates our expert teams guidance on compliance requirements. Our team understands Canadian charity law and can help ensure your organisation follows proper procedures.
A Public Benefit Corporation (PBC) plays a specific role in Canada’s charity and nonprofit sector. Its structure and legal requirements shape how these organizations operate and serve the public.
Understanding the basics of PBCs, their purpose, and benefits clarifies their impact on nonprofits.
What is a public corporation in Canada?
In Canada, a public corporation refers to a nonprofit or charitable organization incorporated to serve a public or charitable purpose. It operates under acts like the Ontario Not-for-Profit Corporations Act (ONCA) or the Canada Not-for-profit Corporations Act (CNCA).
These corporations focus on public benefit rather than generating profit.
What are the benefits of a non-profit organization in Canada?
Nonprofits in Canada can receive tax exemptions, legal protections for directors, and increased credibility with the public. They operate without the goal of distributing profits and reinvest any surplus into their mission.
This structure supports funding opportunities and promotes trust among donors and communities.
What is the purpose of a public benefit corporation?
The purpose of a PBC is to carry out activities that provide clear benefits to the public, such as solving social, environmental, or community issues. It must maintain transparency and accountability to ensure its actions align with serving the public interest.
What is a CA nonprofit corporation public benefit?
In Canadian law, a Public Benefit Corporation can be a nonprofit organization that meets specific criteria under ONCA or CNCA. It must be a registered charity or, if non-charitable, receive significant public funding (like over $10,000) and show a public benefit focus in its activities.
What is an example of a public benefit?
An example of a public benefit is providing poverty relief, running educational programs, or supporting environmental conservation. These activities directly improve community well-being and align with the goals of PBCs to serve societal needs.
What are the examples of public benefit organization?
Examples include charities focused on health, education, social services, and conservation.
Community support groups and nonprofits can also qualify as Public Benefit Corporations.
These organizations often receive government grants or public donations to address public needs.
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
Book a Consultation with Northfield & Associates
Your Trusted Partner in International Bilateral Relations
At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.
Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.
Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.
Take the First Step Today
If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.
We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.
If you or anybody that you know, think that you meet the requirements and wish to receive further information.
We can help you start the application process and confirm eligibility requirements to participate.
We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.
Disclaimer:
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
Forward-Looking Information
This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.
Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Questions?
info@northfied.biz
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Media Contact:
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Before diving into the details, here are the essential facts every non-profit leader should know:
Annual public funding threshold: $10,000 or more in gross annual revenue from public sources
Lookback period: Current financial year plus the previous three financial years
Enhanced reporting requirements: Must file publicly accessible financial statements
Public accountant requirement: Must appoint a public accountant for audit or review engagement (smaller organizations under $250,000 in annual revenue may opt for a review engagement instead of a full audit)
Board composition requirement: Must have at least 3 directors, with at least 2 directors who are not officers or employees of the corporation
Increased accountability: Subject to stricter governance and transparency standards
Higher penalties: Non-compliance carries more significant consequences
If your organization receives public funding, understanding these requirements isn’t optional—it’s essential for maintaining compliance and public trust.
A corporation is considered “soliciting” if it receives more than $10,000 in gross annual revenue from public sources in a single financial year. Think of this as a threshold that determines how much public accountability your organization must maintain. Once you cross this line, you’re essentially telling the government and the public that your organization relies on community support and therefore must be transparent about how those funds are used.
What Counts as Public Sources?
Public sources that count toward this $10,000 threshold include several key categories:
Donations and Gifts
These are contributions from individuals who aren’t closely connected to your organization’s inner circle. If you receive money from people who aren’t members, directors, officers, employees, or their immediate family members, these donations count toward your threshold. For example, if your local animal shelter receives $500 donations from 25 different community members throughout the year, that $12,500 total would make you a soliciting corporation. Even smaller amounts add up quickly when you’re raising funds from the general public.
Government Grants
Any financial assistance from federal, provincial, or municipal governments counts toward this threshold. This includes obvious sources like grants from Health Canada or your provincial ministry of social services, but also less obvious ones like funding from local arts councils or regional development agencies. Even a $5,000 grant from your city’s community development fund combined with $6,000 in public donations would push you over the threshold.
Funds from Other Corporations
This category can be tricky to understand, but it’s crucial. If you receive money from another corporation that has itself received significant public funds (more than $10,000), their donation to you counts toward your soliciting status. For instance, if a large charity that receives substantial government funding gives your organization an $8,000 grant, and you also receive $3,000 in public donations, you’d be considered a soliciting corporation.
How to Calculate Your Public Funding Threshold
Determining whether your organization meets the soliciting corporation threshold requires careful calculation. Here’s a step-by-step approach to help you assess your status:
Step 1: Identify Your Financial Years
Review your current financial year and the previous three financial years. For example, if your fiscal year ends December 31, 2025, you’d examine 2025, 2024, 2023, and 2022.
Step 2: Gather All Public Funding Sources
Collect records of all gross annual revenue from:
Individual donations from non-members
Government grants at all levels (federal, provincial, municipal)
Donations from other soliciting corporations
Crowdfunding campaigns
Public fundraising events open to the general community
Step 3: Calculate Each Year’s Total
Add up all qualifying public funds for each financial year separately.
Practical Example:
2025 Financial Year:
Public donations: $8,000
Provincial grant: $3,500
Grant from soliciting corporation: $1,200
Total: $12,700 ✓ Soliciting status triggered
2024 Financial Year:
Public donations: $6,500
Municipal grant: $2,000
Total: $8,500 ✓ Below threshold individually
Result: Because 2025 exceeds $10,000, your organization is a soliciting corporation.
Step 4: Document What Doesn’t Count
Exclude these sources from your calculation:
Membership fees from voting members
Business income unrelated to public solicitation (e.g., rental income from owned property)
Investment income from endowment funds
Donations from directors, officers, employees, and their immediate families
Grants from private foundations that don’t themselves receive public funds
Tracking Tips:
Maintain separate accounting categories for public vs. private funding
Document the source of every donation over $100
Review your soliciting status annually as part of your financial year-end process
Keep clear records for at least four years to support your classification
In contrast, a non-soliciting corporation operates below the public funding radar. These organizations have either received no public funds or have stayed under $10,000 in gross annual revenue from public sources over the previous three financial years. Notice that it’s not just one year—the calculation looks back over three years, so even if you had a quiet year, previous years’ public funding might still classify you as soliciting.
Non-soliciting corporations typically fund their operations through private sources closely connected to the organization. This might include membership fees from a small group of dedicated members, donations from board members and their families, or income from business activities that don’t involve public fundraising. For example, a small religious congregation that relies entirely on member tithing, or a private foundation funded solely by its founding family, would likely qualify as non-soliciting.
Understanding this distinction is crucial because soliciting corporations face much stricter reporting requirements, higher penalties for non-compliance, and greater public scrutiny. The government’s logic is simple: if you’re asking the public for money, the public deserves to know how you’re spending it.
Real-Life Examples: Understanding Soliciting Status in Practice
Sometimes the best way to understand these rules is to see how they apply to real organizations. Here are three common scenarios that illustrate different situations you might encounter:
Example 1: Growing Environmental Group (Transition Year)
Green Future Ottawa started as a small grassroots environmental advocacy group. Here’s their funding history:
2022 Financial Year:
Member donations (15 founding members): $4,500
Fundraising event for members only: $2,000
Total Public Funds: $0 (all from members)
2023 Financial Year:
Member donations: $5,000
Public fundraising campaign: $3,500
Total Public Funds: $3,500
2024 Financial Year:
Member donations: $6,000
Public donations: $7,500
Total Public Funds: $7,500
2025 Financial Year:
Member donations: $7,000
Public donations: $8,500
Federal environment grant: $5,000
Total Public Funds: $13,500 ✓ Threshold exceeded
Analysis: In 2025, they received $13,500 from public sources (public donations + government grant), crossing the threshold for the first time. Even though individually, 2022, 2023, and 2024 were all below $10,000, the 2025 year triggers soliciting status.
Status: Became a soliciting corporation in 2025. They must immediately begin complying with enhanced requirements, including appointing a public accountant for their 2025 financial statements and ensuring their board meets the composition requirements (at least 3 directors, with at least 2 who are not officers or employees).
Example 2: Sports Club with Tricky Funding (Edge Case)
Riverside Soccer Club runs youth soccer programs and thought they were non-soliciting, but their accountant raised concerns.
Revenue Sources:
Registration fees from 200 youth players: $60,000
Concession sales at games: $8,000
Uniform sales to parents: $5,000
Grant from City Sports Foundation (a soliciting corporation): $7,000
Community fundraiser (raffle open to public): $4,500
Analysis: This is where it gets tricky. The registration fees are for program participants, not membership fees for voting members of the corporation, so they actually count as revenue from the public. However, they’re fees for services rather than donations, which typically wouldn’t count toward soliciting status. The concession and uniform sales are business income, not donations.
The critical factors here are:
Grant from City Sports Foundation ($7,000) – This counts because the grantor is a soliciting corporation
Community fundraiser ($4,500) – This counts as public solicitation
Total: $11,500 from clearly public sources
Status: Soliciting corporation. Even though most of their revenue is from program fees and sales, the combination of the grant from another soliciting corporation and public fundraising pushes them over the threshold.
Lesson: Organizations should carefully track where grants come from and whether fundraising events are truly member-only or open to the public.
Example 3: Food Bank with Multiple Funding Streams (Clearly Soliciting)
Lakeshore Community Food Bank serves low-income families in a mid-sized Ontario city.
Revenue Sources:
Individual donations collected via website: $35,000
Corporate food donations (in-kind): $20,000 estimated value
United Way allocation: $40,000
Provincial poverty reduction grant: $30,000
Grocery store partnership donations: $15,000
Fundraising gala open to public: $22,000
Analysis: This organization has multiple streams of public funding:
Individual donations ($35,000)
United Way allocation ($40,000) – United Way is a soliciting corporation
Provincial grant ($30,000)
Public fundraising gala ($22,000)
Total: $127,000 from public sources
The in-kind food donations, while valuable, typically aren’t counted as monetary revenue for the threshold calculation, though they must be reported on financial statements.
Status: Strongly soliciting corporation. With this level of public funding, they should have robust financial controls, a qualified public accountant (though with revenue well above $250,000, they’ll likely need a full audit rather than just a review engagement), comprehensive financial statements, and strong governance practices. Donors and government funders will expect high standards of accountability.
What These Examples Teach Us:
Size doesn’t always determine status – A large religious congregation can be non-soliciting, while a small environmental group can be soliciting.
Source matters more than amount – It’s not about how much money you receive, but where it comes from.
Track carefully – Organizations near the threshold should monitor their funding sources throughout the year, not just at year-end.
Plan ahead – Growing organizations should anticipate the transition and prepare governance structures before they’re required.
When in doubt, classify up – If you’re unsure whether you’re soliciting, it’s safer to follow soliciting corporation requirements than risk non-compliance.
Member-only vs. public matters – Truly restricting activities and fundraising to voting members can help maintain non-soliciting status, but make sure your membership structure legitimately supports this.
Each organization’s situation is unique, and these examples illustrate why careful analysis of your specific funding sources is essential for proper classification.
Key Differences: Soliciting vs. Non-Soliciting Corporations
The distinction between soliciting and non-soliciting status affects nearly every aspect of your organization’s governance and reporting obligations. Here’s a clear comparison:
Aspect
Soliciting Corporation
Non-Soliciting Corporation
Public Funding Threshold
Over $10,000 in gross annual revenue in any fiscal year within the review period
Under $10,000 in gross annual revenue in current year and previous three years
Financial Statement Filing
Must file with Corporations Canada and make publicly available
Not required to file publicly
Public Accountant/Auditor
Must appoint a public accountant for audit or review engagement (organizations under $250,000 annual revenue may opt for review engagement)
May appoint an accountant but not mandatory
Board Composition
Must have at least 3 directors, with at least 2 who are not officers or employees
No minimum director requirement (though typically at least 1)
Annual Meeting Requirements
Stricter notice requirements and mandatory financial presentation
More flexibility in meeting procedures
Member Access to Records
Enhanced member rights to access financial information
Standard member access rights
Financial Transparency
Full disclosure of financial statements to public
Limited public disclosure requirements
Penalties for Non-Compliance
Higher fines and potential loss of status
Lower penalties for minor infractions
Governance Complexity
More stringent board oversight requirements
Simplified governance structures permitted
Bylaw Requirements
Must address public accountability measures and board composition
Basic bylaw provisions sufficient
Why This Matters:
The increased requirements for soliciting corporations aren’t arbitrary—they reflect the principle that organizations using public funds must maintain higher standards of transparency. When your local food bank receives a government grant or your arts organization runs a public fundraising campaign, donors and taxpayers have a legitimate interest in how those funds are managed.
For organizations approaching the $10,000 threshold, it’s wise to prepare for soliciting status in advance rather than scrambling to meet requirements after crossing the line. This might mean updating your bylaws, establishing stronger financial controls, ensuring your board composition meets the requirements, or engaging a public accountant before it becomes mandatory.
What Happens If You Misclassify Your Corporation?
Incorrectly identifying your organization’s status—or failing to recognize when you’ve transitioned from non-soliciting to soliciting—can have serious consequences. Understanding the risks helps you avoid costly mistakes.
Consequences of Misclassification:
1. Financial Penalties Soliciting corporations that fail to meet their obligations face fines under the NFP Act. These penalties can range from hundreds to thousands of dollars, depending on the severity and duration of non-compliance. Directors may be personally liable for some violations.
2. Loss of Public Trust When a soliciting corporation fails to file required financial statements or appoint a public accountant, it erodes donor confidence. Community members who contributed funds expect transparency. Discovering that an organization hasn’t met basic accountability standards can damage your reputation and future fundraising efforts.
3. Impact on Charitable Registration For registered charities, misclassification under the NFP Act can trigger concerns with the Canada Revenue Agency (CRA). While the NFP Act and the Income Tax Act are separate, CRA expects charities to comply with all applicable laws. Persistent non-compliance might affect your charitable registration status.
4. Compliance Orders Corporations Canada may issue compliance orders requiring immediate corrective action. This might include filing overdue financial statements, appointing a public accountant retroactively, correcting board composition issues, or taking other remedial measures within strict deadlines.
5. Involuntary Dissolution In extreme cases of persistent non-compliance, Corporations Canada has the authority to initiate dissolution proceedings. This represents the ultimate consequence—losing your corporate status entirely.
Steps to Correct Misclassification:
If you discover your organization has been operating under the wrong classification:
Conduct an immediate review of the past four years’ funding to determine your correct status
File any overdue financial statements with Corporations Canada as soon as possible
Appoint a public accountant if you’re actually a soliciting corporation (determine whether a full audit or review engagement is appropriate based on your annual revenue)
Review and correct your board composition if necessary—ensure you have at least 3 directors with at least 2 who are not officers or employees
Update your bylaws if necessary to reflect soliciting corporation requirements
Notify your board and ensure they understand the compliance obligations going forward
Implement tracking systems to monitor your public funding threshold annually
Consider legal advice if you’ve missed significant obligations or face penalties
Prevention is Key:
The best approach is conducting an annual status review as part of your year-end financial processes. Many organizations build this into their annual general meeting preparations, ensuring the board formally confirms the organization’s soliciting or non-soliciting status each year based on updated financial data.
Transitioning from Non-Soliciting to Soliciting Status
Growth is a positive sign for any non-profit, but it brings new responsibilities. When your organization’s public funding approaches or exceeds the $10,000 threshold, proactive planning makes the transition smoother.
When to Anticipate the Change:
Start preparing for soliciting status when:
You’re planning a major public fundraising campaign
You’ve applied for government grants totaling more than $10,000
Your annual public donations have been trending upward toward the threshold
You’re receiving grants from other soliciting corporations that will push you over the limit
Required Governance Changes:
1. Board Composition Review
Critical Requirement: Soliciting corporations must have at least 3 directors, with at least 2 directors who are not officers or employees of the corporation.
Action steps:
Review your current board composition to ensure compliance
If you have fewer than 3 directors, recruit additional qualified board members
If 2 or more directors are officers or employees, you’ll need to either:
Recruit non-employee directors to meet the requirement, or
Restructure roles so fewer board members hold officer or employee positions
Document board member status clearly (director only vs. director who is also an officer/employee)
Update your board policies and procedures to maintain compliance going forward
Example scenario: If your board has 5 directors and 3 of them are also employees of the organization (Executive Director, Program Director, Finance Director), you’ll need to recruit at least one additional non-employee director to meet the “at least 2 non-employee directors” requirement.
2. Bylaw Amendments
Review your bylaws to ensure they include provisions for:
Appointment of a public accountant or auditor (and specify whether audit or review engagement based on revenue)
Board composition requirements (minimum 3 directors, at least 2 non-employees)
Public access to financial statements
Enhanced financial reporting to members
Stricter notice requirements for annual meetings
Many organizations update their bylaws preemptively to include soliciting corporation provisions, even before reaching the threshold.
3. Financial Engagement Decision
Determine whether your organization needs a full audit or can opt for a review engagement:
Full Audit Required: If your gross annual revenue exceeds $250,000
Review Engagement Option: If your gross annual revenue is under $250,000
A review engagement is less extensive and typically less expensive than a full audit, while still providing appropriate oversight for smaller soliciting corporations. Discuss with potential public accountants which option is most appropriate for your organization’s size and complexity.
4. Board Resolution
Your board should formally acknowledge the status change and approve necessary actions. A typical resolution might state:
“BE IT RESOLVED that the Board acknowledges the Corporation has become a soliciting corporation under the NFP Act effective [date], having received more than $10,000 in gross annual revenue from public sources during the [year] financial year. The Board directs management to:
Implement all required compliance measures
Appoint a public accountant for [audit/review engagement] of financial statements
Ensure board composition meets the requirement of at least 3 directors with at least 2 non-employee directors
File financial statements with Corporations Canada as required”
5. Financial System Updates
Implement or enhance systems to:
Track public vs. private funding sources separately
Generate financial statements in the format required for public filing
Maintain detailed donor records distinguishing public donors from members/insiders
Monitor your public funding threshold continuously
Implementation Timeline:
Immediately Upon Recognition:
Notify your board of the status change
Begin documenting all public funding sources clearly
Assess current board composition against requirements
Within 60 Days:
Engage a public accountant and determine whether audit or review engagement is appropriate
Recruit additional board members if needed to meet composition requirements
Review and update bylaws if needed
Within 120 Days:
File amended bylaws if necessary
Finalize board composition changes
Establish enhanced financial reporting procedures
Before Next Annual Meeting:
Present audited or reviewed financial statements to members
File required documents with Corporations Canada
Ensure public access to financial statements
Communication with Stakeholders:
Transparency during this transition builds trust:
Inform your members about the status change and what it means
Reassure donors that enhanced accountability protects their interests
Update your website to reflect your commitment to transparency
Consider highlighting your soliciting status as a mark of organizational maturity and public trust
Many successful organizations view the transition to soliciting status not as a burden, but as a milestone demonstrating their growth and community impact.
Identifying whether a corporation is soliciting or non-soliciting is important because soliciting corporations are subject to stricter regulations to ensure transparency and accountability. Since they handle public funds, it’s essential to have measures in place that protect the interests of the public and maintain trust.
To sum up, understanding the requirements for soliciting corporations under the NFP Act is essential for ensuring compliance and maintaining public trust. Soliciting corporations, which receive significant public funds, must adhere to stricter financial reporting, governance, and accountability standards—including board composition requirements and appropriate financial review processes. Identifying whether your corporation falls under this category is the first step towards meeting these obligations and operating transparently.
By ensuring that soliciting corporations are held to these higher standards, the NFP Act helps to maintain the integrity and trustworthiness of charitable organizations in Canada, ultimately benefiting the public and the communities these organizations serve.
Need Help Determining Your Corporation’s Status?
Classification as a soliciting or non-soliciting corporation can be complex, especially for organizations with diverse funding sources or those experiencing growth. The consequences of misclassification—from financial penalties to reputational damage—make it crucial to get this determination right.
When to Seek Professional Guidance:
Consider consulting with charity law specialists if your organization:
Is approaching the $10,000 threshold and needs to prepare for transition
Has complex funding structures involving multiple government grants, corporate donations, and public fundraising
Recently discovered it may have been operating under incorrect classification
Needs to restructure its board to meet soliciting corporation composition requirements
Is uncertain whether to pursue a full audit or review engagement
Is planning a major fundraising campaign or capital project
Needs to update bylaws to reflect soliciting corporation requirements
Faces compliance issues or communications from Corporations Canada
How Northfield & Associates Can Help:
Our team specializes in Canadian charity law and non-profit compliance, offering:
Status Assessment: We review your funding sources and help determine your correct classification
Board Governance Review: We assess your board composition and help ensure compliance with NFP Act requirements
Bylaw Review and Updates: We ensure your governance documents meet NFP Act requirements for soliciting corporations
Financial Review Planning: We help you determine whether your organization needs a full audit or can use a review engagement
Compliance Audits: We identify gaps in your current practices and provide actionable recommendations
Governance Consulting: We help your board understand and fulfill its obligations under the NFP Act
Transition Planning: We guide organizations moving from non-soliciting to soliciting status
Don’t let uncertainty about your organization’s status keep you up at night.
Do membership fees count toward the $10,000 threshold?
No, membership fees from voting members don’t count as public funds under the NFP Act. The rationale is that members have a direct relationship with the organization and typically have voting rights, making them more than just public donors. However, if someone pays a fee but receives no membership rights or benefits, that payment might be considered a public donation rather than a membership fee.
What if we go over $10,000 one year but stay under the next year?
You remain a soliciting corporation. The NFP Act looks at whether you exceeded $10,000 in the current year OR any of the previous three financial years. Once you become a soliciting corporation, you must continue meeting those requirements until you’ve stayed below the threshold for four consecutive years (the current year plus three previous years all under $10,000).
Do crowdfunding campaigns count as public solicitation?
Yes, funds raised through crowdfunding platforms like GoFundMe, Kickstarter, or Indiegogo typically count as public donations. These platforms allow anyone from the general public to contribute, which fits the definition of public solicitation under the NFP Act. If your crowdfunding campaign raises $12,000, you’ve exceeded the threshold and become a soliciting corporation.
What’s the difference between an audit and a review engagement?
Both are forms of financial oversight by a public accountant, but they differ in scope and cost:
Full Audit: More comprehensive, involves testing of financial records, provides highest level of assurance. Generally required for soliciting corporations with gross annual revenue over $250,000.
Review Engagement: Less extensive than audit, provides moderate assurance, typically less expensive. May be acceptable for soliciting corporations with gross annual revenue under $250,000.
Consult with a public accountant to determine which is appropriate for your organization.
Our board has 4 directors, but 3 are also employees. Are we compliant?
No. Soliciting corporations must have at least 2 directors who are not officers or employees. With only 1 non-employee director, you’d need to recruit at least one additional director who is not an employee, or restructure so that one employee steps down from the board (while retaining their employment role).
Can we voluntarily elect to be a soliciting corporation?
Yes, even if you don’t meet the $10,000 threshold, your organization can choose to follow soliciting corporation requirements. Some organizations do this to demonstrate greater transparency and accountability to their stakeholders. This voluntary election can strengthen donor confidence and position your organization as particularly trustworthy, even if it’s not legally required.
How does this affect registered charities vs. non-profits?
Both registered charities and non-charitable non-profits incorporated under the NFP Act must determine their soliciting status. The NFP Act governs corporate structure and governance, while the Income Tax Act (administered by CRA) governs charitable status and tax receipting. A registered charity must comply with both sets of rules. This means a registered charity that’s also a soliciting corporation under the NFP Act faces requirements from both Corporations Canada and the CRA.
What financial year should we use for calculating the threshold?
Use your organization’s designated financial year as stated in your bylaws or articles of incorporation.
Most Canadian non-profits use either a calendar year (January 1 – December 31) or a fiscal year ending March 31, but your organization may have chosen a different 12-month period. Whatever period you’ve established must be used consistently for calculating the threshold and filing requirements.
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
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Disclaimer:
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
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NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.
Should I Incorporate my Not-for-Profit Federally or Provincially?
Short answer: Almost always, federally.
Incorporating your Not-for-Profit federally is superior to incorporating provincially for almost all NFP incorporations, for the following reasons, amongst others:
Incorporation Turnaround: To Incorporate a Federal Not-for-Profit is sometimes as quick as a few hours, and almost always within 24 hours.
Provincial Not-for-Profits take at least 2 weeks to incorporate if you pay the “expedited fee” of $255.00. If you don’t want to pay for them to expedite your file, the turnaround time is at least 8 weeks, usually longer.
Updating to ONCA: Provincial corporations, formed in Ontario, will have to amend their incorporation documents and by-laws in the next couple of years, when the new Not-for-Profit legislation (“ONCA”) comes into effect in Ontario. This will cost these Not-for-Profits potentially thousands of dollars in legal fees, depending on how extensive the amendments are.
The new federal Not-for-Profit legislation, in contrast, if already in effect, is working very well, and is not expected to change any time soon.
Corporate Changes: A corporation formed federally, can make corporate changes immediately, almost always for free, and the information is updated in the government’s database instantaneously. And if you want a copy of the corporate documents, it is very easy, quick and cheap to obtain them.
Provincial corporations must pay to make changes if the changes are processed electronically, and if you want to obtain copies of copies of corporate documents, it takes several days, as it is still stored on microfiche… And to amend the Letters Patent of an Ontario corporation, the process can sometimes take 3-5 months for the Ministry to process the amendment.
PGT: Many corporate changes for Not-for-Profits formed provincially require approval from the PGT, which can significantly slow down the process and create more red tape for provincial Not-for-Profits. Incorporating your Not-for-Profit federally circumvents that extra layer and cost of the going through a PGT review.
Audit Requirement: Provincial corporations with annual revenue of over $100,000 must conduct a financial audit, which can easily run $5k-10K. Federal Not-for-Profits on the other hand have a much higher threshold, $250,000, before an audit is required (and even that benchmark can be waived under certain circumstances).
(* Note, this blog post is no longer entirely accurate do to the passing of the ONCA and significant modernization of the provincial filing options. Nonetheless, most charity lawyers in Ontario continue to recommend federal incorporation for their not-for-profit clients seeking to register as a charity.)
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
Book a Consultation with Northfield & Associates
Your Trusted Partner in International Bilateral Relations
At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.
Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.
Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.
Take the First Step Today
If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.
We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.
If you or anybody that you know, think that you meet the requirements and wish to receive further information.
We can help you start the application process and confirm eligibility requirements to participate.
We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.
Disclaimer:
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
Forward-Looking Information
This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.
Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Questions?
info@northfied.biz
Within Corporate Newsroom
Media Contact:
media@northfied.biz
Press contact
PR consultants press@northfied.biz
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.
Under ONCA, Can Not-for-Profit Corporations Waive Audit and Review Engagements?
Not-for-profit corporations play a crucial role in our society, serving various purposes, such as advancing education, promoting social welfare, and supporting religious activities. As these corporations operate in the public interest, specific legal requirements are in place to ensure accountability and transparency. One such requirement is the need for audit and review engagements.
The Ontario Not-for-Profit Corporations Act (ONCA) outlines the rules and regulations not-for-profit corporations must follow. Under ONCA, the possibility of waiving audit or review engagement requirements for not-for-profit corporations depends on factors like annual revenue and whether the corporation is a public benefit corporation under section 76 of ONCA.
An audit requirement can be waived for public benefit corporations with annual revenue between $100,000 and $500,000, but a review engagement is still necessary. If the income is $500,000 or more, an audit becomes mandatory.
Conversely, if the annual revenue is $100,000 or less, the audit and review engagement can be waived for public benefit corporations. It is important to note that these thresholds are subject to change in the future through regulation amendments.
To waive audit or review engagement requirements, an extraordinary resolution requiring approval by at least 80% of members is needed. This decision stays in place until the next yearly meeting. It is essential to follow the proper procedures and obtain the necessary approvals before waiving these requirements, as failure to do so can result in legal and financial consequences.
For other not-for-profit corporations not classified as public benefit corporations, those with annual revenue over $500,000 can waive the audit but must conduct a review engagement. The audit and review engagement can be waived if the income is $500,000 or less. Again, an extraordinary resolution is required in either case, valid until the next annual meeting of members.
In summary, not-for-profit corporations must consider their annual revenue and legal classification when deciding whether to waive audit and review engagement requirements. Following the proper procedures and obtaining the necessary approvals before making any decisions is essential.
By doing so, not-for-profit corporations can ensure accountability and transparency, strengthen public trust, and continue to serve their essential missions.
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
Book a Consultation with Northfield & Associates
Your Trusted Partner in International Bilateral Relations
At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.
Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.
Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.
Take the First Step Today
If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.
We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.
If you or anybody that you know, think that you meet the requirements and wish to receive further information.
We can help you start the application process and confirm eligibility requirements to participate.
We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.
Disclaimer:
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
Forward-Looking Information
This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.
Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Questions?
info@northfied.biz
Within Corporate Newsroom
Media Contact:
media@northfied.biz
Press contact
PR consultants press@northfied.biz
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.
Why Do Charities and Nonprofits in Canada Need Extra-Provincial Registration?
In today’s interconnected world, charities and nonprofits often aim to extend their reach across multiple provinces and territories to better serve their causes and communities. But what happens when a nonprofit organization wants to operate in a province or territory where it wasn’t originally established? This is where extra-provincial registration comes into play. In this article, we will explore what extra-provincial registration is, why it is essential for charities and nonprofits, and what steps these organizations need to take to comply with these regulations.
What is Extra-Provincial Registration?
Extra-provincial registration, sometimes referred to as foreign qualification, is a process that allows a charity or nonprofit incorporated in one province or territory to legally conduct activities in another. This registration is necessary for the organization to meet legal requirements and operate within the laws of the new jurisdiction.
Why is Extra-Provincial Registration Important?
There are several key reasons why extra-provincial registration is necessary for charities and nonprofits:
Following the Law: Each province or territory has its own set of rules governing nonprofit activities. Extra-provincial registration ensures that a charity or nonprofit adheres to the specific regulations of the region where it plans to operate.
Protecting Legal Rights: Registering in the new jurisdiction helps an organization safeguard its legal rights and take advantage of the legal protections and benefits available there. It allows the organization to carry out its mission, enter contracts, and protect its interests.
Ensuring Transparency and Accountability: Extra-provincial registration makes information about the organization’s activities in the new jurisdiction accessible to regulatory authorities and the public, promoting transparency and accountability.
Legal Implications and Compliance
Undergoing extra-provincial registration brings several legal obligations that charities and nonprofits must fulfill. Here are the main aspects:
Document Filing: Organizations need to submit specific documents, such as an Application for Extra-Provincial Registration, to the relevant regulatory authority in the new jurisdiction.
Registered Office and Agent: Charities and nonprofits may be required to have a registered office address and appoint a registered agent in the new jurisdiction. This agent acts as a point of contact for legal documents.
Annual Reports and Filings: Organizations often need to file annual reports, updating the regulatory authority about their activities, financial status, and corporate structure in the new jurisdiction.
Tax and Regulatory Obligations: Charities and nonprofits must comply with tax laws, licensing requirements, and other regulations in both their original location and the new province or territory.
Registering a Federal Charity or Nonprofit in a Province or Territory
If a charity or nonprofit is federally incorporated in Canada, it must register in each province or territory where it will conduct activities. The registration requirements vary by province and territory, but generally, conducting business includes:
Having an address, a post office box, or a phone number in the province or territory.
Offering services or products in the province or territory.
Extra-provincial registration is a vital process for charities and nonprofits that wish to expand their operations into new regions. It ensures that organizations comply with local laws, protect their legal rights, and maintain transparency and accountability. While the process can be complex, understanding the requirements and taking the necessary steps can help ensure a smooth and successful expansion into new areas. Expanding your charitable or nonprofit organization into new territories offers many opportunities to better serve your cause, but it is crucial to comply with all legal requirements to operate successfully and legally.
Why Charities and Nonprofits Require Extra-Provincial Registration
To operate legally beyond their home province, charities and nonprofits must register in new jurisdictions and protect their rights there. This allows them to serve communities across Canada while staying compliant and secure.
Legal Compliance Obligations
When we expand into another province or territory, we must follow that region’s rules for charities and nonprofits. Extra-provincial registration helps us meet these legal obligations.
Each province has its own laws about fundraising, governance, and reporting. Filing an Application for Extra-Provincial Registration with the local authority is a key step.
We may also need to appoint a registered agent and maintain a registered office address in the new province. Ongoing duties include submitting annual reports and staying updated on tax and licensing rules.
Without this registration, we risk penalties or being barred from operating legally in that province or territory.
Expanding Operations Across Canada
Extra-provincial registration lets us work beyond our original province and reach more people. By registering, we can offer services, run fundraising campaigns, and form contracts in new jurisdictions.
Even having a phone number or office in another province might require registration. Registration creates a clear legal presence and helps local authorities recognize and support our operations.
This helps us respond better to community needs across provincial borders.
Protecting Legal Rights in Other Jurisdictions
Registering extra-provincially protects our legal rights outside our home province. It lets us enforce contracts, own property, and defend ourselves in court if needed.
A registered agent acts as a local contact for receiving important legal documents. This setup helps us handle legal issues quickly and avoid complications from operating without formal recognition.
Maintaining compliance and a legal presence in every province strengthens our position. It safeguards our reputation and assets as we expand.
Key Legal Requirements for Extra-Provincial Registration
To operate legally in a new province or territory, we must follow specific steps. This includes submitting paperwork, setting up a local office address, and appointing someone to handle legal communications.
Filing Applications and Required Documents
We start by filing an Application for Extra-Provincial Registration with the authority in the new jurisdiction. This application shows our intent to carry on activities there.
We must provide documents such as proof of incorporation, a copy of our bylaws, and a statement of directors and officers. Each province sets its own requirements, so we must check carefully before submitting.
Fees apply and vary by province. Filing these documents properly ensures the new jurisdiction recognizes us and permits us to operate.
Maintaining a Registered Office
We must have a registered office in the new province or territory. This office acts as our official address for legal correspondence and notices.
The address must be a physical location, not just a post office box, and must be accessible during business hours. Maintaining a registered office provides an official contact point and ensures government bodies and the public can reach us.
Failing to keep this office can lead to penalties or loss of registration.
Appointing an Agent for Service
We must appoint an agent for service in the new jurisdiction. This agent handles all legal documents for us.
The agent needs a physical address in the province or territory and must be available during business hours. The agent acts as our local representative for legal matters.
Choosing a reliable agent ensures we do not miss important deadlines or notices. Staying compliant with provincial laws depends on this role.
Types of Charities and Nonprofits Impacted
Not all charities and nonprofits face the same rules when expanding into other provinces or territories. The need for extra-provincial registration depends on where the organization is incorporated and plans to operate.
Provincially Incorporated Charities
Charities and nonprofits incorporated at the provincial level must register extra-provincially to operate outside their home province. This includes offering services, having an office, or holding events in another province or territory.
Each province has its own requirements for extra-provincial registration. Usually, the organization must apply to the provincial corporate registry, provide documents like certified letters patent, and appoint a registered agent in the new jurisdiction.
This allows the charity to carry out contracts, fundraise legally, and protect its interests. Failing to register can result in fines or the inability to enforce contracts in the new province.
Provincially incorporated charities must track where they work and register as needed.
Federally Incorporated Charities
Charities that are federally incorporated in Canada must register separately in every province or territory where they plan to operate. Federal incorporation allows operation across the country, but provincial registration is still required for local legal recognition.
Extra-provincial registration for federally incorporated charities involves submitting an application and designating a local registered office and agent. Requirements vary across provinces but focus on ensuring the charity follows local rules and tax standards.
This process helps federally incorporated charities stay transparent and accountable in each region. It also grants access to local legal protections and funding opportunities.
Cross-Border and International Considerations
Some charities and nonprofits operate across provincial, national, or international borders. Organizations active in multiple Canadian provinces need extra-provincial registration in each jurisdiction they enter.
Charities involved with the United States or other countries must comply with foreign laws, tax rules, and registration requirements. This often means working with legal experts to navigate different systems.
Cross-border activities may affect fundraising, tax-exempt status, and the ability to hold assets. Careful planning and registration in each jurisdiction help avoid penalties and protect the organization’s mission.
Understanding the Extra-Provincial Registration Process
To operate legally in another province or territory, we must follow rules that vary across jurisdictions. This includes learning local requirements, submitting forms, and keeping up with ongoing obligations.
Researching Jurisdictional Requirements
We first need to understand the legal rules in the province or territory where we want to work. Each place has different laws about registering charities and nonprofits.
We must check if we need to register a business name, pay extra fees, or provide special documents. Some provinces require a registered office or a local agent to handle legal notices.
We should also verify tax registration or fundraising rules that might apply. Doing thorough research helps us avoid mistakes and delays.
Preparing and Submitting Applications
Once we know the rules, we gather all required documents for the application. This often includes our governing documents, proof of good standing from our home province, and a completed application form.
Depending on the province, we may submit these materials online or by mail. Some jurisdictions require business name registration if we operate under a different name.
We must provide accurate information and meet any deadlines to ensure our application is accepted.
Maintaining Ongoing Compliance
After registering, we must keep meeting all ongoing legal duties in that jurisdiction. This usually means filing annual reports or updates on our activities, finances, and corporate structure.
We also need to keep a registered office or agent available for receiving official documents. Any changes to our organisation, like a new address or board members, must be reported promptly.
Failing to stay compliant can lead to penalties or losing our registration rights in that province or territory.
Looking to understand the legal steps beyond your home province?
Benefits and Risks of Extra-Provincial Registration
Extra-provincial registration lets us operate legally outside our original province. It opens doors to new communities while keeping us accountable to local laws.
This process involves legal duties and risks if we do not follow the rules carefully.
Accessing New Communities and Stakeholders
Registering extra-provincially allows us to provide services in provinces where we were not initially incorporated. We can reach more people and organizations that support our cause.
It helps build trust with local stakeholders by showing we follow their specific rules. Having a registered office or agent in the new province makes us more visible and accountable.
This registration makes it easier to form partnerships, apply for local grants, and host events. By expanding our presence, we can increase donations and volunteers from new areas.
Legal and Tax Implications
Extra-provincial registration requires us to comply with laws in each province or territory where we operate. This means filing annual reports and maintaining a registered office or agent.
We must also follow each region’s tax rules, including possible new tax filings. Not meeting these requirements could affect our legal status and ability to fundraise.
Understanding different provincial regulations helps us avoid penalties or legal challenges. Proper registration gives us protections for contracts and legal actions within those regions.
Legal compliance keeps our operations smooth and ensures transparency with regulatory authorities and the public.
Risks of Non-Compliance
Failing to register where required may lead to fines or legal actions against us. Operating without extra-provincial registration can limit our ability to enforce contracts or defend our rights locally.
Non-compliance can also hurt our reputation with donors and partners. We may lose tax-exempt status for activities in that province, reducing funding opportunities.
We risk having to stop operations in unregistered provinces, wasting resources and time. Understanding each province’s rules helps us avoid these problems.
Staying up-to-date with registration renewals and filings protects us from these risks and keeps our organisation in good legal standing.
Conclusion
We know that extra-provincial registration can be complex for charities and nonprofits. Following local laws protects your organization’s legal rights and keeps your operations transparent in every province or territory where you work.
This process helps your organization continue its work smoothly across Canada.
If your organization plans to expand beyond your home province, getting expert legal advice is a smart move.
We offer guidance tailored to your needs. Our team helps you meet all registration requirements efficiently.
Let us help you expand your impact with confidence and compliance.
We often receive questions about extra-provincial registration for charities and nonprofits. Common topics include what it means, reasons for registering, risks of not registering, differences between provinces, and support options for costs.
What is extra-provincial registration in Canada?
Extra-provincial registration lets a charity or nonprofit incorporated in one province or territory legally operate in another. It ensures the organization follows local laws when it works outside its home jurisdiction.
What is the purpose of extra-provincial registration for charities and nonprofits?
The main purpose is to comply with each jurisdiction’s specific rules. This registration protects the charity’s legal rights and allows it to enter contracts, hold property, and fundraise in the new province.
It also promotes transparency and accountability.
Are there any penalties for failing to register a charity extra-provincially?
Yes. Operating in a province without registration can lead to penalties, including fines and loss of legal protections.
It may also affect the charity’s ability to enforce contracts or defend itself in legal matters in that province.
How does the extra-provincial registration process differ from province to province?
Registration requirements and procedures vary by province. Some provinces require a registered agent and a physical address.
The time, fees, and paperwork can also differ depending on where you register.
Can a charity operate across Canadian provinces without extra-provincial registration?
In some provinces, a charity may carry out limited activities without registering, but this is rare. Most charities need to register extra-provincially to operate legally and access full rights under local laws.
Grants to help cover the costs of extra-provincial registration for Canadian Charities?
Few grants exist specifically for extra-provincial registration fees. Some funding programs and foundations may support operational expansions or legal costs, which can include registration fees.
Research and apply for relevant funding opportunities to increase your chances of receiving support.
In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.
By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.
Book a Consultation with Northfield & Associates
Your Trusted Partner in International Bilateral Relations
At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.
Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.
Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.
Take the First Step Today
If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.
We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.
If you or anybody that you know, think that you meet the requirements and wish to receive further information.
We can help you start the application process and confirm eligibility requirements to participate.
We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.
Disclaimer:
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.
Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
Forward-Looking Information
This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.
Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Questions?
info@northfied.biz
Within Corporate Newsroom
Media Contact:
media@northfied.biz
Press contact
PR consultants press@northfied.biz
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.
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