Category: Government Contracting & Public Sector

What’s the difference between charity or social enterprise in Canada?

Many people confuse charities and social enterprises because both aim to create positive social change. The key difference lies in how they operate and fund their activities.

A charity is a not-for-profit organisation that relies mainly on donations and grants. A social enterprise uses business activities to generate income and can be for-profit or not-for-profit.

Charities focus on a specific public benefit, such as relieving poverty or protecting the environment. They must reinvest any surplus to support their cause.

Social enterprises blend purpose with commerce. They use profits from selling goods or services to fund their mission, sometimes sharing profits with investors.

Understanding these distinctions helps organisations choose the right model for their goals and funding strategies. This knowledge also clarifies legal requirements, tax benefits, and how each structure affects governance and sustainability.

How does a nonprofit organization differ from a charity?

While these phrases are often used interchangeably in everyday speech, the Canada Revenue Agency (CRA) provides a useful chart that highlights the distinctions between their legal definitions under the Income Tax Act.

In Canada, the term “nonprofit” is typically used to describe organizations that fall into one of three categories:

Registered Charity

Charities differ from not-for-profit corporations in that they operate programs that fulfill the charitable activities specified by the Charities Directorate of the Canada Revenue Agency. These organizations are subject to registration and regulation by the CRA, and they possess the authority to provide tax receipts to contributors.

Foundation

Canadian foundations are a specific type of registered charity whose primary purpose is to allocate funds to qualified donees. These entities may provide grants (donations) to other charities, function as a funding source for another charitable organization (such as hospital foundations), or engage in their own charitable initiatives.

Nonprofit corporation

Incorporated as a distinct legal entity apart from its directors and members, some organizations may decide against registering as a charity with the CRA. While they are permitted to generate profits, any earnings are utilized to advance their corporate objectives and are not distributed among shareholders, members, or directors.

Which option is suitable for you?

The choice of which option to pursue is contingent upon the nature of your planned activities. While charities offer certain advantages, such as the ability to provide tax receipts to donors, favorable income tax treatment, and a high level of public confidence, not-for-profit corporations and social enterprises encounter fewer regulatory restrictions when it comes to generating revenue through events, fundraising, and product sales. Here are some alternatives to establishing a charity:

Collaborating with an established charitable organization

Utilize online platforms like CanadaHelps, CharityData, or the CRA’s registry of approved charities to investigate established charitable organizations that offer comparable services or advocate for the same cause.

Functioning as a nonprofit organization

In situations where your goals involve both charitable and non-charitable activities, establishing a nonprofit corporation may be more suitable. Nonprofits have more flexibility in their operations, despite not being able to provide tax receipts. Compared to charities, nonprofits face less stringent rules in the following areas:

• Political involvement (charities have limitations)
• Organizing fundraising events and other types of events (charities are required to follow receipting protocols)
• Charging user fees (charities are required to follow receipting protocols, which nonprofits are not bound by).

Operating as a social enterprise or commercial entity

If your program or service is beneficial to both the community and the participants, and the fees or sales from related products generate revenue that surpasses the cost of running the program(s), establishing a social enterprise could be a viable option. In addition, commercial enterprises can recover all of the GST/HST/QST they pay through input tax credits, while charities receive only approximately half of the tax rebate.

Legal Structures and Registration

Legal structures shape how organisations operate, raise funds, and meet regulations. Different forms suit charities and social enterprises based on their goals and financial activities.

Registration with government authorities is a key step to gain legal recognition and follow the right rules.

Common Legal Structures for Charities

Charities often use structures like company limited by guarantee, incorporated association, or charitable trust.

A company limited by guarantee is popular as it limits liability for members and provides a clear governance framework. It must comply with the Charities Act and register on the relevant charities register.

An incorporated association suits smaller groups. It is easier to manage but is mainly for local operation and has limits on fundraising scope.

Charitable trusts involve holding assets for a charitable purpose. They require trustees and follow strict rules on asset use.

All these structures must register with a charities register and meet reporting and operational requirements under Canadian law.

Common Legal Structures for Social Enterprises

Social enterprises can use for-profit or not-for-profit legal forms depending on their mission and funding model.

Common choices include:

• For-profit corporations, sometimes structured as a social purpose business under corporate law.
• Co-operative corporations, which focus on member control and community benefit.
• Nonprofit corporations, which reinvest profits back into the mission.

Social enterprises must ensure their legal form supports social goals. Their structure influences marketing, governance, and tax requirements.

Unlike charities, social enterprises are not always required to register on a charities register. They must comply with corporate regulations.

Business Registration Requirements

Registration depends on the structure and jurisdiction.

Charities must register with the Canada Revenue Agency (CRA) to receive charitable status and tax benefits.

They also register with provincial charities registers when applicable.

Social enterprises often register with corporate regulators such as Corporations Canada or provincial bodies like ASIC (in provinces using Australian terms) or their Canadian equivalents.

Registration requires submitting governance documents, mission statements, and financial plans. It also triggers ongoing reporting, such as annual financial statements and compliance with governance standards.

Proper registration protects organisations and builds trust with donors, partners, and customers.

Tax Concessions and Financial Benefits

Tax treatment and financial advantages differ significantly between charities and social enterprises. Access to exemptions and special status affects funding options, reporting obligations, and eligibility for government grants.

Understanding these elements helps organisations choose the best structure for financial efficiency and compliance.

Tax Exemptions for Charities

Charities registered with the Canada Revenue Agency (CRA) often qualify for income tax exemptions. They do not pay tax on income directly related to their charitable activities.

Charities must apply for and maintain this status through the CRA and follow strict rules about their operations and financial reporting.

Registered charities may also receive exemptions on certain provincial taxes and property taxes, depending on local regulations. These tax reliefs reduce operating costs and free up resources to advance their mission.

Charities must file annual returns with the CRA to retain their tax-exempt status. Failure to meet compliance requirements can result in penalties or loss of exemption.

Tax Treatment of Social Enterprises

Social enterprises do not automatically receive tax exemptions like registered charities. They are typically subject to ordinary business taxes, including income tax and, where applicable, GST/HST.

Social enterprises can sometimes benefit from specific tax concessions if they operate under certain nonprofit legal structures or reinvest profits to advance social goals. They have flexibility in how they use and distribute profits.

Social enterprises that focus on trading activities must comply with standard business tax rules. This includes filing regular tax returns and maintaining proper financial records.

Tax advantages depend on the entity type and activities rather than a broad exemption.

Deductible Gift Recipient Status

Deductible Gift Recipient (DGR) status allows donors to claim income tax deductions for donations. Only registered charities usually qualify for DGR status in Canada.

This status enhances fundraising capacity because donors receive financial incentives to give. DGR can be crucial for charities relying on philanthropy and government grants.

Social enterprises generally do not have DGR status. This limits their ability to attract tax-deductible donations unless they form an affiliated charitable arm or register as a charity themselves.

The presence or absence of DGR affects the type and source of funding available to organisations.

Fundraising and Income Sources

Fundraising and income generation differ significantly between charities and social enterprises. Charities rely mainly on donations and grants, enjoying certain tax advantages.

Social enterprises focus on revenue from selling goods or services, which supports their social goals while covering costs.

Fundraising Models

Charities primarily raise money through donations, grants, and public fundraising events. These activities often benefit from tax concessions, allowing donors to receive tax receipts, which encourages giving.

Government grants are also a key funding source, supporting activities that provide public benefit or aid.

Social enterprises may accept donations but focus less on traditional fundraising. Their income mainly comes from customers who buy their products or services.

This approach offers more flexibility but generally does not offer the same tax receipt benefits as charities.

Trading and Commercial Activities

Social enterprises operate by trading goods or services that directly support their social missions. This business model allows them to generate reliable income and become sustainable without depending solely on external funding.

Charities can engage in commercial activities but face more rules and limits. Any profits must be reinvested into charitable programs.

Charities only receive partial recovery on sales taxes paid (like GST/HST), while social enterprises can usually recover these taxes fully.

Grant and Donation Eligibility

Charities have access to a wider range of government grants due to their registered status and clear public benefit focus. Being a registered charity also allows them to issue official tax receipts, which helps attract donations.

Nonprofits and social enterprises often have fewer opportunities for grants and cannot provide tax receipts. They face fewer restrictions when delivering services or charging user fees, allowing them to combine business activities with social impact.

Governance, Compliance, and Regulation

Charities and social enterprises must follow specific rules and standards to operate legally and effectively. These rules ensure they manage resources responsibly and maintain public trust.

Different bodies and regulations set these requirements and oversee compliance. Proper governance is essential to meet these obligations and align with public policy.

Key Regulatory Bodies

In Canada, registered charities fall under the Canada Revenue Agency (CRA), which regulates their status, tax benefits, and public reporting. The CRA enforces the Charities Act, which outlines rules for charitable activities and fundraising.

Social enterprises structured as corporations often register under provincial laws or as companies limited by guarantee. In some provinces, the Office of the Superintendent of Bankruptcy or provincial corporate registries oversee these entities.

The Australian Charities and Not-for-profits Commission (ACNC) is not relevant in Canada but may be mentioned for comparison. Canadian charities do not report to ACNC but must comply with the CRA’s rigorous standards.

Agencies like the Australian Securities and Investments Commission (ASIC) govern for-profit companies and some social enterprises internationally. Canadian social enterprises may be subject to provincial securities regulators if they raise capital.

Reporting and Compliance Obligations

Registered charities must file an annual T3010 Registered Charity Information Return with the CRA. This report details finances, donors, and programs.

Failure to file can lead to penalties or loss of charitable status.

Social enterprises, especially those legally structured as non-profits, have varying reporting needs. Non-profits often submit annual returns to provincial authorities detailing their activities and finances.

For-profit social enterprises file corporate documents with bodies like Industry Canada or provincial registries, alongside tax filings.

Both types must follow fundraising rules under the Charities Act and maintain transparency in spending and governance. Regular audits or reviews may be required to ensure compliance.

Governance Standards

Charities require a board focused on strategic direction, ethical practice, and compliance with the Charities Act and CRA guidelines. Boards must avoid conflicts of interest and supervise use of funds efficiently.

Social enterprises may have more flexible governance depending on their structure. For not-for-profit organizations, the board’s role resembles that of a charity, emphasizing accountability and mission focus.

If a social enterprise is a company limited by guarantee, governance aligns more with corporate law and regulations, including oversight by provincial authorities.

Regardless of structure, governance frameworks should support sustainability, legal compliance, and social impact goals to build trust with stakeholders.

Choosing the Right Model

Selecting the appropriate model depends on the organisation’s goals, funding sources, and how it plans to operate. The right choice influences legal obligations, tax status, and governance structures.

When to Choose a Charity Structure

A charity is best for organisations with a clear charitable purpose like poverty relief, education, or environmental protection. It must operate as a not-for-profit, reinvesting any surplus to further its mission rather than distributing profits.

Charities typically rely on grants, donations, and philanthropy. They benefit from tax exemptions and may qualify for status allowing donors to claim tax deductions.

However, they must meet strict regulations, including annual reporting to the Canadian Revenue Agency and following governance rules.

If an organisation wants to access these benefits, including public fundraising and formal oversight, a charity structure is the appropriate choice.

When a Social Enterprise is More Suitable

Social enterprises combine business activities with a social or environmental mission.

They generate income by selling goods or services and use profits to support their purpose.

Unlike charities, social enterprises can be for-profit or not-for-profit.

This flexibility allows different options for profit distribution and investment.

Organisations that want to scale impact through commercial means and face fewer financial restrictions often choose this model.

Social enterprises follow business laws, including consumer protection and tax rules.

They do not need to register as charities unless they meet specific criteria.

This approach suits mission-driven organisations that want to use commercial strategies.

Hybrid and Group Models

Some organisations use a hybrid approach to balance social impact and financial sustainability.

For example, a charity may own a for-profit company to carry out commercial activities.

The for-profit company can support the charity’s work with its profits while protecting the charity’s status.

A for-profit company might also put a mission lock in its constitution, limiting profit distribution and keeping focus on social goals.

These models need clear legal agreements and governance to separate roles and money flow.

They work well for organisations that need to manage risk and use both charitable support and business growth.

Conclusion

Charities and social enterprises both aim to make a positive difference in society, but they use different methods.

Charities rely on donations and grants, while social enterprises use business methods to create lasting impact.

Understanding these differences helps people choose the right approach for their goals.

For advice on starting or managing a charity or social enterprise, contact Northfield & Associates.

We offer expert guidance on legal and operational matters.

Reach out

• Email: info@northfield.biz
• Call: (416) 317-6806
• Visit us https://www.northfield.biz/
• Appointment: Schedule a FREE consultation

Our experience can help organisations make a lasting social impact.

Frequently Asked Questions

This section explains how social enterprises and charities differ in their structure, funding, and purpose.

It also covers the definitions and qualifications of these entities under Canadian law.

What is the difference between a social enterprise and a charity?

A social enterprise generates income by selling goods or services and uses profits to support its social goals.

A charity relies mainly on donations and grants to fund its activities and provide services.

Social enterprises focus on business sustainability while addressing social problems.

Charities depend on external funding and must follow strict rules about their operations.

What is a social enterprise in Canada?

In Canada, a social enterprise is a business that aims to create social or environmental benefits through its commercial activities.

It earns revenue from sales or fees and reinvests profits to further its social mission.

Social enterprises balance financial performance and social impact.

They are not regulated like charities and can operate as for-profit or nonprofit entities.

What qualifies as a charity in Canada?

A charity in Canada must register with the Canada Revenue Agency (CRA) and operate only for charitable purposes such as poverty relief, education, or other community benefits.

Charities can issue tax receipts to donors and must follow strict regulations for their activities and financial reporting.

What qualifies as a social enterprise?

A social enterprise qualifies by combining business activities with a commitment to social goals.

It must generate revenue that covers its costs and direct profits toward social causes.

This model can take different legal forms but always focuses on sustainability through income generation linked to its mission.

Is a social enterprise an NGO?

Not always. Some social enterprises operate as nonprofit organisations or NGOs, but many are for-profit businesses.

The main difference is that social enterprises use business methods to achieve social impact.

NGOs usually rely on donations and grants, while social enterprises earn revenue through market activities.

What is the difference between a social enterprise and a nonprofit organization?

A nonprofit organization does not distribute profits to members or shareholders. It relies on donations, grants, or fees to support its activities.

Some nonprofits engage in commercial activities, but this is not always the case.

A social enterprise earns income through business operations. It focuses on social impact and often has more flexibility in generating revenue than traditional nonprofits.

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Working with Our Firm

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.

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.

---

About Northfield

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 the Importance of Art Form and Artistic Merit Criteria in Gaining Charitable Status in Canada?

Understanding how art organizations can meet the art form and artistic merit criteria in Canada is essential for gaining charitable status and ensuring their activities are recognized and supported. Let’s break down the steps and requirements for meeting these criteria.

What Are Art Forms and Styles?

Art Form: This refers to the broad categories of art such as literature, dance, visual arts, theatre, and music. For instance:

• Dance includes styles like ballet, modern, jazz, and tap.
• Music includes styles like classical, choral, chamber, and jazz.
• Literature includes prose and poetry.
  

Style: Within each art form, there are different disciplines or methods of expression. For example, within the dance art form, styles include ballet, modern, jazz, and tap.

Establishing Common or Widespread Acceptance

To be recognized, an art organization must demonstrate that both the form and style of art they represent are widely accepted within the Canadian arts community. This can be done through:

1. Educational Evidence:
   • The art form and style are taught or studied at accredited Canadian institutions like colleges and universities.
   • Providing course curricula or syllabi as proof.
2. Recognition by Arts Bodies:
   • The art form and style have been recognized by national or provincial/territorial arts bodies in Canada.
   • This includes funding, exhibition, presentation, or performance recognition.
   • Supporting documentation of such recognition is essential.
3. Academic and Arts Publications:
   • Recognition by established Canadian academic arts journals or arts publications.
   • Providing articles from these publications as evidence.

Evidence from several sources is typically more persuasive, such as:

• Permanent exhibits in national galleries.
• Grants from provincial/territorial arts bodies.
  

Organizations must ensure that all supporting documents not in French or English are translated into one of these languages.

Demonstrating Artistic Merit

Artistic Merit: This refers to the quality of exhibitions, presentations, or performances. To meet the artistic merit criterion, organizations need to show that their activities are of high quality and provide public value.

1. Detailed Descriptions:
   • Provide a comprehensive description of the exhibition, presentation, or performance.
   • Explain how each will be exhibited, presented, or performed.
2. Objective Evidence:
   • Evidence of the required quality through:
     • Open, unbiased selection processes for artists and artworks.
     • Calls for auditions or selection processes.
     • Lists of artists or works considered.
     • Names and qualifications of decision-makers.
     • Standards and procedures applied in the process.
3. Impartial Reviews:
   • Materials from established academic journals, arts publications, or professional arts reviews.
   • Reviews or critiques from mainstream media with established qualifications of the reviewer or critic.
4. Expert Submissions:
   • Submissions from independent experts with relevant qualifications or work experience.
   • Provide biographical information about the artists, including training, previous performances, awards, and grants.
5. Professional Memberships:
   • Certification that artists or organizations are members of professional associations with quality standards.
6. Curated Selections:
   • Evidence that the artwork or artist has been chosen as part of a curated exhibition, presentation, or performance.

Maintaining Compliance

Organizations must continue to meet the artistic merit criteria even after registration. This involves:

• Ensuring ongoing compliance with established standards.
• Providing evidence of artistic merit as required.
• Being assessed based on location, size, nature, and other relevant circumstances.

If artistic merit cannot be established through Canadian sources, international equivalents will be considered. By following these guidelines, art organizations can effectively meet the art form and artistic merit criteria, ensuring their activities are recognized and supported within the Canadian arts community.

---

Working with Our Firm

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.

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.

---

About Northfield

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.

Soliciting vs Non-Soliciting Corporation Canada: Key Differences

If a Canadian not-for-profit corporation receives more than $10,000 from public sources in a single financial year, it becomes a soliciting corporation and must follow stricter rules.

Non-soliciting corporations stay below this threshold and have more flexibility in how they operate.

The difference between these two types affects board size and financial reporting.

The distinction between soliciting and non-soliciting status determines key requirements like the minimum number of directors needed, what kind of financial review is required, and whether the organization must file financial statements with Corporations Canada.

These requirements exist because soliciting corporations receive public funds and need to maintain transparency and accountability to the public.

Understanding which category applies to a corporation helps directors and officers meet their legal obligations under the Canada Not-for-profit Corporations Act.

This article explains the criteria for each status, outlines the specific requirements soliciting corporations must follow, and covers how these rules affect day-to-day operations and long-term planning.

Defining Soliciting vs Non-Soliciting Corporations

The Canada Not-for-profit Corporations Act classifies not-for-profit corporations into two categories based on their funding sources and amounts.

This classification determines the regulatory requirements each corporation must follow.

Soliciting Corporation Definition

A soliciting corporation receives more than $10,000 from public sources in a single financial year.

Public sources include three main types of income.

The first type covers donations or gifts from people who are not members, directors, officers, or employees of the corporation. Under the CNCA Regulations, this also excludes “prescribed persons” — individuals related to the corporation by blood, marriage, common-law partnership, or adoption. This includes spouses, children, parents, siblings, and anyone who resides with a member, director, officer, or employee of the corporation.

The second type includes grants or similar financial assistance from federal, provincial, or municipal governments or their agencies.

The third type involves donations or gifts from another corporation or entity that itself received more than $10,000 from public sources in its most recent financial year.

The status takes effect at the annual meeting following the financial year when the corporation exceeded the $10,000 threshold.

This gives the corporation time to make necessary changes to comply with additional requirements.

Non-Soliciting Corporation Definition

A non-soliciting corporation receives no public funds or less than $10,000 in public funds during its previous financial years.

These corporations typically operate on membership fees, investment income, or private donations from members and their families.

A corporation is considered soliciting if it received more than $10,000 in public funds in any single financial year within its last three years. However, once a corporation becomes soliciting, it must remain below this threshold for two consecutive financial years before it can return to non-soliciting status.

Non-soliciting corporations face fewer regulatory requirements and less government oversight.

They do not need to file financial statements with Corporations Canada unless specifically requested by the Director.

Determining Status under the Canada Not-for-profit Corporations Act

Not-for-profit corporations must calculate their total public funding at each financial year-end to determine their status.

The calculation includes all three types of public sources outlined in the Act.

The $10,000 threshold applies to the combined total from all public sources, not each source individually.

Corporations should track donations, government grants, and transfers from other publicly funded organizations separately throughout the year.

Corporations Canada provides an assistance tool to help organizations determine whether they are soliciting or non-soliciting.

Directors and officers should review their funding sources carefully, as misclassification can lead to non-compliance with statutory requirements.

Legal or professional advice may be necessary when circumstances are unclear or complex.

Criteria and Thresholds for Soliciting Status

A corporation’s soliciting status depends on whether it receives more than $10,000 from public sources in a single financial year.

The timing of when this threshold is met and what counts as public funding determines the specific requirements a corporation must follow.

Public Funding Threshold and Timeframe

The public funding threshold sits at $10,000 per financial year.

A corporation becomes soliciting when its annual public funding exceeds this amount during any single financial period.

The calculation happens at the corporation’s financial year-end.

The requirements don’t take effect immediately when a corporation crosses the threshold.

They apply starting at the annual meeting of members following the financial year-end where the corporation exceeded $10,000 in public funds.

This timing gives the corporation a chance to make necessary changes to its governance structure.

A corporation remains soliciting until it stays below the $10,000 threshold for two consecutive financial years.

Only after two full years under the limit can it return to non-soliciting status.

Sources of Public Funding

Public sources include three main categories of income.

The first category covers donations and gifts from people who are not members, directors, officers, or employees of the corporation. Under the CNCA Regulations, the definition of “prescribed persons” (who are not considered public donors) includes individuals related to the corporation by blood, marriage, common-law partnership, or adoption. This encompasses spouses, children, parents, siblings, and anyone who resides with a member, director, officer, or employee of the corporation.

The second category includes government grants and similar financial assistance.

This covers funding from federal, provincial, or municipal governments and their agencies.

The third category involves donations or gifts from other corporations that themselves received more than $10,000 from public sources in their most recent financial year.

This creates a flow-through effect where public funding from one organization counts as public funding for the receiving organization.

Income that does not count as public funding:

• Membership fees from members
• Business income from regular operations
• Investment income from assets
• Donations from prescribed persons (family members and household residents of members, directors, officers, and employees)
• Private foundations (unless they received public funds)
• Corporate donations from companies without public funding

Calculating Gross Annual Revenue

Gross annual revenue serves two purposes in determining a corporation’s obligations.

First, it combines with soliciting status to set financial review requirements.

Second, it establishes the type of audit or review a corporation must conduct.

For soliciting corporations:

• Those with gross annual revenue under $50,000 default to a review engagement, but members can waive this requirement by unanimous resolution
• Corporations between $50,000 and $250,000 must have an audit by default, but members can opt for a review engagement instead through a special resolution
• Above $250,000, an audit becomes mandatory with no option to choose a review engagement

For non-soliciting corporations:

• Those with gross annual revenue under $1 million default to a review engagement, but members can waive this requirement by unanimous resolution
• Corporations with $1 million or more in gross annual revenue must have either an audit or a review engagement (members can choose by unanimous resolution), but cannot waive having a public accountant entirely

The gross annual revenue calculation includes all income sources, not just public funding.

This means membership fees, business income, investment income, donations, gifts, and government grants all factor into the total.

The financial year determines the period for measuring both the public funding threshold and gross annual revenue.

Transitioning Between Statuses

The transition from non-soliciting to soliciting status requires specific governance changes.

The corporation must increase its board to at least three directors, with two who are not officers or employees.

If the corporation’s articles are silent on the distribution of property upon liquidation, the Canada Not-for-profit Corporations Act automatically requires that any remaining property be distributed to a qualified donee under the Income Tax Act. While amending the articles to explicitly include this provision is not legally required, it is considered a best practice for clarity and transparency.

Filing requirements change at the first annual meeting after crossing the threshold.

The corporation must begin sending financial statements and any public accountant reports to Corporations Canada.

It must also eliminate any unanimous member agreement if one exists.

Moving from soliciting to non-soliciting status takes longer.

The corporation must stay below the $10,000 public funding threshold for two complete financial years.

During this time, it continues to meet all soliciting corporation requirements.

Only after the second consecutive year below the threshold can it adopt the less stringent non-soliciting requirements.

Some corporations may qualify for an exemption through a Director’s decision.

This allows a soliciting corporation to be deemed non-soliciting in exceptional circumstances where meeting the full requirements would not serve the public interest.

Legal Obligations and Reporting Requirements

Soliciting and non-soliciting corporations face different levels of scrutiny with financial reporting and public disclosure.

Soliciting corporations must file detailed financial statements with Corporations Canada and meet strict deadlines, while non-soliciting corporations have fewer requirements but still need to maintain basic compliance.

Filing Financial Statements

Soliciting corporations must prepare and file complete financial statements with Corporations Canada every year.

These statements need to include a balance sheet, income statement, statement of changes in net assets, and cash flow statement.

A qualified public accountant must conduct either an audit or review engagement of these documents before filing.

Non-soliciting corporations do not have to file their financial statements publicly.

They still need to prepare financial statements for their members and keep proper financial records, but these documents stay internal.

The organization can choose whether to hire an accountant to review their books.

The type of financial review required depends on the corporation’s soliciting status and annual revenue:

For soliciting corporations:

• Under $50,000: Review engagement (members can waive by unanimous resolution)
• $50,000 to $250,000: Audit required (members can opt for review engagement by special resolution)
• Over $250,000: Audit mandatory

For non-soliciting corporations:

• Under $1 million: Review engagement (members can waive by unanimous resolution)
• Over $1 million: Audit or review engagement required (members can choose by unanimous resolution, but cannot waive having a public accountant)

This creates higher compliance costs for soliciting corporations across all revenue levels.

Financial Reporting Deadlines

Soliciting corporations must send their financial statements to members at least 21 days before their annual meeting.

For the Director of Corporations Canada, the requirements are more detailed: financial statements must be sent not less than 21 days before the annual meeting. If members sign a resolution in lieu of holding a meeting, the corporation must send the financial statements to the Director as soon as possible after the resolution is signed. In all cases, statements must be filed no later than 15 months after the preceding annual meeting and within six months of the financial year-end.

Since the annual meeting must be held within six months (approximately 180 days) of the fiscal year-end, many organizations aim to file their statements within 160 days as a best practice. This gives adequate time for the public accountant to complete their work and still meet the 21-day requirement before the meeting.

If a corporation’s fiscal year ends on December 31, 2025, and they plan to hold their annual meeting in late June 2026, they would need to submit their statements to the Director by early June 2026 to meet the 21-day advance notice requirement, and in any event no later than mid-June 2026 (six months after year-end).

The filing happens through Corporations Canada’s online portal.

Non-soliciting corporations still need to hold annual meetings and present financial information to their members.

However, they don’t face the same strict filing deadlines with Corporations Canada.

They set their own internal timelines based on their bylaws and member needs.

Disclosure to Corporations Canada and the Public

Corporations Canada makes all soliciting corporation financial statements available to the public through their online database.

Anyone can request and view these documents.

This creates public accountability for organizations that receive donations, grants, or other public funds.

The public can see how the organization spends money and manages its resources.

The financial statements must show detailed revenue sources, expenses by category, and any significant transactions.

Soliciting corporations also need to disclose compensation paid to directors and officers if it exceeds certain thresholds.

This transparency helps maintain public trust in the non-profit sector.

Non-soliciting corporations keep their financial information private except to their own members.

They don’t appear in public databases unless someone specifically requests their corporate records through a formal process.

This gives them more privacy but also means less public oversight.

Penalties for Non-Compliance

Corporations Canada enforces compliance through administrative consequences rather than daily financial penalties.

Soliciting corporations that fail to file their financial statements on time will not receive a Certificate of Compliance.

Without this certificate, the corporation cannot demonstrate good standing, which can affect its ability to receive grants, enter contracts, or maintain relationships with funders.

More seriously, consistent failure to meet reporting requirements can lead to administrative dissolution.

If a corporation is more than one year late in filing its Annual Return, Corporations Canada can strike the corporation off the registry.

This means the organization can no longer operate legally, accept donations, or maintain its bank accounts.

The Canada Revenue Agency tracks compliance separately for charitable status purposes.

Organizations that are both soliciting corporations and registered charities need to meet requirements from both Corporations Canada and CRA.

Failing to comply with one can affect standing with the other.

Corporations Canada offers an assistance tool on their website to help organizations determine if they are soliciting or non-soliciting.

Using this tool doesn’t provide legal protection, but it helps organizations understand their obligations before problems arise.

Many corporations mistakenly classify themselves as non-soliciting and then face consequences when Corporations Canada discovers the error during a review.

Audit and Financial Review Standards

The level of financial scrutiny required for a not-for-profit corporation depends on whether it qualifies as soliciting or non-soliciting and its gross annual revenues.

Both types face distinct audit requirements designed to ensure financial transparency and proper financial controls.

Audit Requirements for Soliciting Corporations

Soliciting corporations face stricter financial review standards because they receive public funds.

The requirements change based on annual revenues.

Corporations with annual revenues over $250,000 must have their financial statements audited by a public accountant.

This audit provides assurance that the financial statements comply with Canadian accounting standards for not-for-profit organizations.

For soliciting corporations with revenues between $50,000 and $250,000, an audit is required by default. However, members can pass a special resolution to opt for a review engagement instead.

A review engagement offers moderate assurance rather than the comprehensive examination that an audit provides.

Soliciting corporations with revenues under $50,000 default to a review engagement, but members can waive this requirement by passing a unanimous resolution.

Even when a review is waived, the corporation must still maintain proper financial records and submit financial statements to Corporations Canada.

These heightened requirements exist to safeguard public funds and ensure accountability to donors and the broader community.

Audit Requirements for Non-Soliciting Corporations

Non-soliciting corporations face less stringent financial review standards because they do not receive significant public funding.

The thresholds for required financial oversight are much higher for these organizations.

Corporations with annual revenues of $1 million or more must have a public accountant conduct either an audit or a review engagement. Members can choose between these options by passing a unanimous resolution, but they cannot waive having a public accountant entirely at this revenue level.

Corporations with revenues under $1 million default to a review engagement, but members can waive this requirement by passing a unanimous resolution.

Members can also choose to require a full audit even when revenues are below the mandatory threshold.

This tiered approach recognizes that non-soliciting corporations operate with private funds and need less regulatory oversight while still maintaining some accountability at higher revenue levels.

Role of Public Accountant and Review Engagements

A public accountant conducts both audits and review engagements, but the scope is different for each service.

An audit involves detailed testing of financial controls, verification of assets and liabilities, and examination of transactions.

The public accountant provides positive assurance that financial statements are accurate and complete.

A review engagement is less intensive.

The public accountant performs analytical procedures and asks questions but does not verify information as thoroughly as in an audit.

This service provides moderate assurance, rather than a conclusive opinion.

Both services improve financial transparency and help organizations show accountability to members, donors, and regulators.

The public accountant’s report must be submitted with financial statements to the Director of Corporations Canada when required.

Governance and Board Structure

Soliciting and non-soliciting corporations have different governance requirements under Canadian corporate law.

The main differences relate to the number of directors, who can serve, and what agreements members can make.

Minimum Number of Directors

Non-soliciting corporations need at least one director to operate legally.

This allows small organizations to keep simple corporate structures.

Soliciting corporations must have at least three directors.

This rule applies after the corporation receives more than $10,000 from public sources in a financial year.

The higher threshold exists because soliciting corporations manage public funds and need broader oversight.

A corporation determines its status at the end of each financial year.

If it crosses the $10,000 threshold, it has until its next annual meeting to add the required directors.

Board Composition and Independence

Non-soliciting corporations have no restrictions on who serves as directors.

All board members can be employees, officers, or connected to the organization.

Soliciting corporations must keep independence within their board.

At least two of the minimum three directors cannot be officers or employees of the corporation or its affiliates.

This means a soliciting corporation can have only one director who is also an employee or officer.

The independence requirement prevents conflicts of interest and ensures objective oversight.

It gives donors confidence that someone outside the organization monitors how funds are used.

Restrictions on Unanimous Member Agreements

A unanimous member agreement lets members transfer some or all powers from directors to members.

Non-soliciting corporations can use these agreements to change governance as members choose.

Soliciting corporations cannot have a unanimous member agreement.

This rule protects public accountability by keeping authority with the board of directors.

Organizations that become soliciting corporations must end any existing unanimous member agreement.

They need to pass a resolution to make this change, depending on what their bylaws require.

Articles and Bylaws Requirements

If a soliciting corporation’s articles are silent on the distribution of property upon liquidation or dissolution, the Canada Not-for-profit Corporations Act automatically requires that any remaining property be distributed to a qualified donee under the Income Tax Act, not to members.

While corporations are not legally required to amend their articles to explicitly include this provision, doing so is considered a best practice. It provides clarity for directors, members, and stakeholders, and ensures compliance is transparent.

If a corporation chooses to amend its articles to include this provision explicitly, changes typically require a special resolution, usually approved by two-thirds of voting members.

Non-soliciting corporations have no such automatic restrictions in their articles and bylaws.

They can structure their documents as needed without mandatory asset distribution clauses, unless they are also registered charities (which have separate CRA requirements).

Impacts of Soliciting Status on Operations and Compliance

Soliciting status affects how nonprofits raise funds, report to stakeholders, and keep their charitable registration.

Organizations face different compliance costs, accountability standards, and options depending on their classification under the Canada Not-for-profit Corporations Act.

Funding Flexibility and Fundraising Methods

Soliciting corporations can pursue public fundraising without restrictions.

They can run campaigns for community donors, apply for government grants, and accept funding from other soliciting organizations.

Non-soliciting corporations have a strategic limit.

Any public fundraising that brings in more than $10,000 in a year changes their status.

Organizations must either limit public appeals or prepare for the compliance requirements of soliciting status.

Organizations that want to stay non-soliciting often focus on:

• Member dues and fees
• Private donations from prescribed persons (family members and household residents of board members)
• Revenue from selling goods or services
• Grants from private family foundations
• Investment income from endowments

This limits fundraising reach but keeps administrative costs lower.

Organizations planning public fundraising must budget for audit fees, reporting systems, and extra governance procedures before launching campaigns.

Public Accountability and Donor Confidence

Soliciting corporations must make their financial statements available to anyone who asks.

This transparency builds donor confidence but requires good financial systems and professional accounting support.

Public donors expect to see how their contributions are used.

Organizations that provide clear reporting build stronger relationships with supporters.

The audit or review engagement requirements for soliciting corporations give donors independent checks on management of funds.

Registered charities face extra accountability through the Income Tax Act.

Charitable registration requires meeting standards set by the Canada Revenue Agency regardless of soliciting status.

Soliciting charities benefit from alignment between NFP Act requirements and CRA expectations for transparency.

Organizations listed as qualified donees under the Income Tax Act must keep public trust to maintain their status.

Proper financial reporting helps show compliance with both the NFP Act and charitable registration rules.

Transitioning Back to Non-Soliciting Status

Organizations can return to non-soliciting status by keeping public funding under $10,000 for two consecutive financial years.

The transition requires careful tracking of all revenue.

Organizations must monitor donations from public donors, government funding, and grants from other soliciting corporations.

Even one year over the threshold during the two-year period keeps soliciting status.

Some organizations reduce public fundraising to lower compliance costs.

They might decline government grants, limit donation campaigns, or focus only on private funding sources.

This strategy works for smaller organizations with steady private funding.

The decision should consider long-term sustainability.

Giving up public funding sources may limit growth and community impact.

Implications for Charitable Registration and Taxation

Soliciting status under the NFP Act is separate from charitable registration under the Income Tax Act.

An organization can be a registered charity without being a soliciting corporation if it keeps public funding under $10,000 each year.

Most registered charities go over the soliciting threshold through their fundraising.

Charitable registration lets organizations issue tax receipts to donors, which usually leads to public donations over $10,000 quickly.

Registered charities that are soliciting corporations must comply with both:

• CRA requirements: Annual T3010 filing, proper receipting, spending quotas
• NFP Act requirements: Financial statement audits, public disclosure, governance standards

The compliance burden is higher but necessary for organizations relying on public support.

Non-soliciting registered charities are rare because most charities depend on public funding sources above the threshold.

Organizations should match their corporate structure to their fundraising strategy before seeking charitable registration.

The combined requirements affect budgeting for professional fees, accounting systems, and administrative staff time.

Conclusion

Knowing whether an organization is a soliciting or non-soliciting corporation shapes every part of compliance under the Canada Not-for-profit Corporations Act.

The $10,000 threshold from public sources determines reporting requirements, governance standards, and how much transparency is owed to donors and the public.

Organizations need to track public funding carefully across multiple years and set up the right financial controls based on their classification.

Navigating these requirements can be complex, especially when funding sources change or the organization nears the soliciting threshold.

Getting the classification wrong can create serious compliance risks, including administrative consequences and possible director liability.

Professional guidance helps organizations understand their obligations and set up proper systems from the start.

B.I.G. Charity Law Group helps Canadian charities and nonprofits determine their correct status and meet all regulatory requirements.

Our firm offers practical advice on compliance, governance, and strategic planning for organizations of all sizes.

Contact us at dov.goldberg@charitylawgroup.ca or call 416-488-5888 to discuss your organization’s situation.

Visit CharityLawGroup.ca or schedule a free consultation for expert support on soliciting versus non-soliciting corporation requirements.

Frequently Asked Questions

Non-profit corporations in Canada have specific requirements based on whether they receive public funding.

The $10,000 threshold determines which rules apply to a corporation’s governance and reporting.

What is a non-solicitation corporation in Canada?

A non-soliciting corporation receives less than $10,000 in public funds during its previous financial years.

Public funds include donations from non-members (excluding prescribed persons), government grants, and money from other corporations that also received public funding.

Prescribed persons include individuals related to the corporation’s members, directors, officers, or employees by blood, marriage, common-law partnership, or adoption — such as spouses, children, parents, siblings, and anyone residing with them.

These corporations need only one director to operate.

They do not have to file financial statements with Corporations Canada, though they must still prepare them for their members.

Non-soliciting corporations can create unanimous member agreements.

They also have no automatic restrictions on where their property goes if they dissolve, unless they are registered charities.

How does the receipt of public funds affect the classification of corporations in Canada?

The $10,000 threshold is the dividing line between soliciting and non-soliciting corporations.

A corporation becomes soliciting when it receives more than this amount from public sources in a single financial year.

Public sources include three types of income.

The first is donations from people who are not members, directors, officers, employees, or prescribed persons (family members and household residents related by blood, marriage, common-law partnership, or adoption).

The second is grants from federal, provincial, or municipal governments or their agencies.

The third is donations from other corporations that received more than $10,000 in public funds during their most recent year.

A corporation must calculate its total public funding at the end of each financial year to determine its status.

What are the different financial reporting requirements for soliciting and non-soliciting corporations in Canada?

Soliciting corporations must file their financial statements with Corporations Canada each year.

Non-soliciting corporations do not need to file unless the Director specifically requests them.

The type of financial review depends on soliciting status and revenue levels.

Non-soliciting corporations with under $1 million in gross annual revenues default to a review engagement but members can waive this by unanimous resolution.

Those with $1 million or more must have either an audit or a review engagement (members can choose by unanimous resolution), but they cannot waive having a public accountant entirely.

Soliciting corporations follow stricter rules.

Those with under $50,000 in gross annual revenues default to a review engagement but members can waive this by unanimous resolution.

Corporations with revenues between $50,000 and $250,000 must have an audit by default but members can opt for a review engagement instead through a special resolution.

Soliciting corporations with over $250,000 in gross annual revenues must have an audit with no option to choose otherwise.

They must also send their financial statements and the public accountant’s report to the Director.

What are the implications of being a soliciting corporation for corporate governance practices in Canada?

Soliciting corporations must have at least three directors on their board.

At least two of these directors cannot be officers or employees of the corporation or its affiliates.

These corporations cannot enter into unanimous member agreements.

This rule ensures that decision-making power stays with the board rather than being transferred to members.

If a soliciting corporation’s articles are silent on the distribution of property upon dissolution, the Canada Not-for-profit Corporations Act automatically requires that any remaining property go to a qualified donee under the Income Tax Act.

While not legally required to amend the articles, doing so explicitly is considered a best practice for clarity and transparency.

This restriction does not automatically apply to non-soliciting corporations unless they are registered charities.

How does the transition from a non-soliciting to a soliciting corporation affect an entity’s obligations under the Canada Not-for-profit Corporations Act?

The new requirements do not take effect immediately when a corporation receives more than $10,000 in public funds.

The corporation determines the total amount of public funding at its financial year-end.

If the total exceeds $10,000, the soliciting requirements apply when the corporation holds its next annual meeting of members.

This gives the corporation time to make changes to comply with the new requirements.

The requirements continue to apply until the corporation stays below the $10,000 threshold for two consecutive financial years.

The corporation must assess its revenue at each annual members’ meeting.

What steps must be taken to change the status of a corporation from non-soliciting to soliciting under Canadian corporate law?

The corporation must first increase its board to at least three directors.

Two of these directors must be independent from employment or officer roles within the corporation or its affiliates.

If the corporation’s articles are silent on property distribution upon dissolution, the Act automatically applies the qualified donee requirement. While amending the articles to explicitly include this provision is not legally required, it is a best practice to provide clarity and ensure transparent compliance.

Any existing unanimous member agreement must be terminated.

The corporation must also arrange for the appropriate level of financial review based on its revenue.

The required documents should be sent to Corporations Canada.

These changes must be completed before the annual meeting following the financial year when the corporation exceeded the $10,000 threshold.

The corporation should consult legal counsel to ensure proper compliance with all requirements.

Legal Sources & References

• CNCA Regulations, Part 11; Corporations Canada: Financial Statements and Review.
• Corporations Canada: Steps to Dissolve a NFP.

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Working with Our Firm

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.

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.

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About Northfield

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.

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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.

How Can Arts Organizations Qualify for Charitable Status in Canada?

If you’re involved in an arts organization and want to qualify for charitable status, there are specific criteria you need to meet. These criteria ensure that your organization provides a public benefit through education, appreciation, or industry promotion in the arts. Let’s break down these requirements into understandable parts.

Advancing Education in the Arts

One way your arts organization can qualify for charitable status is by advancing education. This doesn’t just mean traditional classroom settings; it can include various educational activities, as long as they are structured and aimed at teaching or training.

According to the Vancouver Society decision, educational activities must have a legitimate and targeted attempt to educate others. This can be through formal or informal instruction, training, or even self-study plans. However, simply providing materials for self-education or pushing a particular viewpoint does not qualify.

Examples of educational activities include:

• Organizing workshops and seminars on specific art forms or styles.
• Providing classroom instruction on arts-related topics, such as marketing.
• Offering opportunities for students or emerging artists to present their works or develop their skills publicly as part of a broader educational program.
  

Advancing Public Appreciation of the Arts

Your organization can also qualify by promoting public appreciation of the arts. This involves activities that help the public enjoy and understand artistic works. However, these activities should not be limited to education or industry promotion but can be part of a broader effort.

Examples include:

• Producing high-quality public dance performances.
• Curating and exhibiting high-quality public art exhibitions.
  

Promoting the Commerce or Industry of the Arts

Another pathway to charitable status is by enhancing an art form or style within the arts industry for the public’s benefit. This is more about improving the arts industry as a whole rather than benefiting individuals within the industry.

Activities under this category might include:

• Offering merit-based awards and prizes for theater productions.
• Providing workshop facilities and tools for public use to enhance skills and craftsmanship in the arts.
  

The Public Benefit Requirement

A crucial aspect of qualifying for charitable status is proving that your organization delivers a public benefit. This involves a two-part test:

1. Benefit: The benefit must be recognizable, provable, and socially useful. It can be tangible (like a workshop) or intangible (like an appreciation for the arts). Benefits that aren’t easily measurable need to be shown as valuable through common understanding and acceptance.
2. Public: The benefit must be available to the public or a sufficient section of it. This means your activities should not just benefit a small, select group but should have a wider impact.

Proving Charitable Benefits

• Advancing Education: Benefits from educational activities are usually tangible. If the educational value is unclear or disputed, the organization must prove the educational benefit.
• Advancing Public Appreciation: Benefits are often intangible. Organizations need to show that their exhibitions or performances meet high standards of artistic merit.
• Promoting Arts Industry: Benefits can be both tangible and intangible. Organizations need to demonstrate that their activities improve the arts industry and meet artistic standards.

For your arts organization to qualify for charitable status, you must clearly define how your activities advance education, public appreciation, or the commerce and industry of the arts. Your programs should be structured, targeted, and provide a recognizable public benefit. By meeting these criteria, your organization can help enrich the community through the arts while gaining the advantages of charitable status.

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Working with Our Firm

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.

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.

---

About Northfield

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.

Registered National Arts Service Organizations (RNASO)

There are 29 Registered National Arts Service Organizations (RNASO) in Canada.

Here is the current listing of Registered National Arts Service Organizations (RNASO).  You can obtain an up-to-date list from the Canada Revenue Agency by selecting the search category “NASO”.

• ARTBRIDGES – REGISTERED 2018-10-15 TORONTO ON
• ASSOCIATED DESIGNERS OF CANADA – REGISTERED 2019-03-26 TORONTO ON
• ASSOCIATION OF CANADIAN WOMEN COMPOSERS (ACWC) L’ASSOCIATION DES FEMMES COMPOSITEURS CANADIENNES (AFCC) – REGISTERED 2019-02-27 TORONTO ON
• CANADIAN AUTHORS ASSOCIATION – REGISTERED 1997-08-07 ORILLIA ON
• CANADIAN COUNTRY MUSIC ASSOCIATION – REGISTERED 2011-01-25 TORONTO ON
• CANADIAN GRAND MASTERS FIDDLING ASSOCIATION – REGISTERED 2010-02-10 OTTAWA ON
• CHORAL CANADA/CANADA CHORAL – REGISTERED 2015-04-01 TORONTO ON
• CANADIAN AMATEUR AND EDUCATIONAL THEATRE ASSOCIATION/ASSOCIATION CANADIENNE DU THEATRE AMATEUR ET SCOLAIRE – REGISTERED 2003-04-01 VANCOUVER BC
• CANADIAN ARTISTS REPRESENTATION – LE FRONT DES ARTISTES CANADIENS – REGISTERED 2003-04-01 OTTAWA ON
• CANADIAN ARTS PRESENTING ASSOCIATION – REGISTERED 1992-04-01 CHARLOTTETOWN PE
• CANADIAN BOOKBINDERS AND BOOK ARTISTS GUILD – REGISTERED 1992-01-01 TORONTO ON
• CANADIAN DANCE ASSEMBLY/L’ASSEMBLEE CANADIENNE DE LA DANSE – REGISTERED 2006-05-01 TORONTO ON
• CANADIAN NON-THEATRICAL FILM AND VIDEO CORPORATION – REGISTERED 1992-04-01 FREDERICTON NB
• CULTURAL HUMAN RESOURCES COUNCIL/LE CONSEIL DES RESSOURCES HUMAINES DU SECTEUR CULTUREL- REGISTERED 1997-04-01 OTTAWA ON
• DANCER TRANSITION RESOURCE CENTRE/CENTRE DE RESSOURCES POUR DANSEURS EN TRANSITION – REGISTERED 1991-09-01 TORONTO ON
• DOCUMENTARY ORGANIZATION OF CANADA/DOCUMENTARISTES DU CANADA – REGISTERED 2007-01-01 TORONTO ON
• INDEPENDENT MEDIA ARTS ALLIANCE – REGISTERED 2010-12-14 MONTREAL QC
• INDIGENOUS ARTS COLLECTIVE OF CANADA – REGISTERED 2021-06-17 MANOTICK ON
• LEAGUE OF CANADIAN POETS – REGISTERED 1996-04-01 TORONTO ON
• MASS CULTURE CANADA – REGISTERED 1993-10-16 TORONTO ON
• PLAYWRIGHTS GUILD OF CANADA – REGISTERED 2011-04-01 TORONTO ON
• PROFESSIONAL ASSOCIATION OF CANADIAN THEATRES / ASSOCIATION PROFESSIONNELLE DES THEATRES CANADIENS – REGISTERED 2011-06-06 TORONTO ON
• PROFESSIONAL OPERA COMPANIES OF CANADA/COMPAGNIES D’OPERA PROFESSIONELLES DU CANADA – REGISTERED 2001-07-01 TORONTO ON
• SONGWRITERS ASSOCIATION OF CANADA – REGISTERED 1999-01-01 TORONTO ON
• STORYTELLERS OF CANADA/CONTEURS DU CANADA – REGISTERED 2000-01-19 TORONTO ON
• THE SUNBURST AWARD SOCIETY – REGISTERED 2015-01-13 NORTHYORK ON
• THE CANADIAN NETWORK OF DANCE PRESENTERS CANDANCE – CANDANSE LE RESEAU CANADIEN DES DIFFUSEURS DE DANSE – REGISTERED 2001-07-01 TORONTO ON
• THE CANADIAN SOCIETY OF CHILDREN’S AUTHORS, ILLUSTRATORS AND PERFORMERS / LASOCIETE CANADIENNE DES AUTEURS, ILLUSTRATEURS ET ARTISTES POUR ENFANTS – REGISTERED 2008-04-14 TORONTO ON
• THE WRITERS’ UNION OF CANADA – REGISTERED 1995-04-01 TORONTO ON

How to Apply for NASO Designation?
‍

Arts organizations may apply to the Department of Canadian Heritage to be designated as a National Arts Service Organization (NASO) by the Government of Canada, and in turn, be considered by the Canada Revenue Agency for registration under the Income Tax Act.

The registration allows your organization to issue official receipts for gifts or donations received with the same benefits as registered charitable organizations. This in turn, provides an individual donor with a tax credit or a reduction of taxable income for a corporate donor. Registration also exempts your organization from paying income tax under Part I of the Income Tax Act.

Organizations need to apply only to Canadian Heritage. Once your organization qualifies for designation as a NASO, you will be informed and the necessary documentation will be forwarded to the Canada Revenue Agency for consideration.

To apply, complete the Application for Designation Form
‍

Am I eligible for designation by Canadian Heritage?
‍

Your organization must be a non-profit organization whose purpose is the promotion of the arts on a nation-wide basis through activities such as:

      · sponsoring arts exhibitions or performances

      · conducting workshops and development programs related to the arts

      · organizing and sponsoring conferences, competitions and special arts events

Your organization must demonstrate that it represents, in one or both official languages of Canada, the community of artists in one or more recognized sectors of the arts.
‍

Am I eligible for registration by the Canada Revenue Agency?
‍

Your organization must meet all criteria applicable to registered charitable organizations.

‍

For more information on Registered National Arts Service Organizations (RNASO) in Canada see:

The CRA’s Website

Canadian Heritage’s Website:
Information on RNASO
Information on Designation and Registration

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Working with Our Firm

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.

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.

---

About Northfield

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 under ONCA?

In Ontario, determining whether your corporation falls under the category of a public benefit corporation involves understanding specific criteria and implications under the Ontario Not-for-Profit Corporations Act (ONCA). Let’s explore what defines a public benefit corporation, what obligations it entails, and how it differs from other types of corporations.

What is a Public Benefit Corporation?

A public benefit corporation under the ONCA is characterized by its commitment to serving public or charitable purposes. There are two primary criteria that define a corporation as a public benefit entity:

1. Charitable Purposes: The corporation is incorporated with the primary goal of advancing education, relieving poverty, promoting religion, or supporting other charitable causes as defined in the ONCA.
2. Financial Support: Alternatively, even if not primarily charitable, a corporation can qualify as a non-charitable public benefit corporation if it receives substantial financial support from external sources. Specifically, if it receives more than $10,000 in donations, gifts, or grants from non-members, directors, officers, employees, or governmental agencies within a financial year.

Determining Status

The determination of whether a corporation qualifies as a public benefit corporation is typically made at its first annual meeting in the subsequent financial year. This determination is crucial as it dictates the regulatory requirements and obligations the corporation must adhere to under the ONCA.

Additional Requirements for Public Benefit Corporations

Once identified as a public benefit corporation, certain specific rules and obligations apply:

1. Director Composition: A public benefit corporation must ensure that no more than one-third of its directors are employees of the corporation or any of its affiliates. This rule aims to maintain independence and prevent conflicts of interest within the board.
2. Financial Reporting: Public benefit corporations are subject to more stringent financial reporting requirements compared to other types of corporations. These requirements are designed to ensure transparency and accountability in financial management.
3. Winding Up and Distributions: Public benefit corporations face different procedures and restrictions when winding up operations or distributing assets. These regulations are intended to safeguard the corporation’s assets and ensure they are used in accordance with their charitable or public benefit purposes.

Flexibility and Changes

It’s important to note that, except for charitable corporations, corporations in Ontario can switch between being public benefit and not-for-public benefit based on changing circumstances and compliance with the criteria set forth in the ONCA. This flexibility allows corporations to adapt their status as their operations and support structures evolve over time.

Understanding whether your corporation qualifies as a public benefit corporation is crucial for compliance with Ontario’s regulatory framework. By meeting the criteria laid out in the ONCA, your corporation can uphold its commitment to public service or charitable endeavors while navigating the additional responsibilities and obligations that come with this designation. Whether you’re starting a new corporation or considering a change in status, clarity on these distinctions ensures you operate within the legal framework that best suits your organizational goals and societal contributions.

Key Differences from Other Not-for-Profit Corporations

Public benefit corporations must follow stricter governance requirements than standard not-for-profit corporations.

The most significant difference involves board composition rules that limit employee representation.

Director Composition Rules:

• Maximum one-third of directors can be employees
• Applies to the corporation and its affiliates
• Designed to prevent conflicts of interest
• Maintains board independence

Financial reporting requirements are more stringent for public benefit corporations.

They must undergo enhanced financial reviews and maintain higher transparency standards than other not-for-profit entities.

Dissolution procedures also differ significantly.

When winding up operations, public benefit corporations face specific restrictions on asset distribution to ensure resources continue serving public purposes.

Criteria and Thresholds to Qualify

We determine public benefit corporation status using clear financial and purpose-based criteria.

Charitable corporations automatically qualify regardless of their funding sources or revenue levels.

Non-Charitable Corporation Thresholds:

• Must receive more than $10,000 annually
• Funding from non-members, non-directors, non-officers, or non-employees
• Includes donations, gifts, and grants
• Government funding also counts toward threshold

The $10,000 threshold applies to each financial year.

Corporations meeting this criteria in their first qualifying year make the determination at their next annual meeting.

Qualifying Revenue Sources:

• Public donations and gifts
• Foundation grants
• Government funding and subsidies
• Corporate sponsorships from external entities

Status can change based on annual funding levels.

Non-charitable corporations may move in and out of public benefit corporation classification as their external support fluctuates above or below the threshold.

Types of Public Benefit Corporations

Under ONCA, there are two distinct types of public benefit corporations.

One type includes organizations with charitable purposes, while the other covers non-charitable groups that receive significant external funding.

Charitable Public Benefit Corporations

Any corporation that operates for charitable purposes automatically qualifies as a public benefit corporation under ONCA.

We don’t need to meet any additional financial thresholds or requirements.

Charitable purposes include:

• Advancing education
• Relieving poverty
• Promoting religion
• Other causes recognized as charitable under Canadian law

Registered charities fall into this category by default.

These organizations receive their charitable status through Canada Revenue Agency registration and must follow both federal charity rules and ONCA requirements.

The charitable designation means we’re automatically subject to public benefit corporation rules.

This includes restrictions on director composition and enhanced financial reporting requirements.

We cannot change our status from charitable to non-charitable public benefit corporation.

Once we’re established with charitable purposes, we remain in this category throughout our existence.

Non-Charitable Public Benefit Corporations

Non-charitable corporations can become public benefit corporations based on their funding sources.

We qualify if we receive more than $10,000 in external support during a financial year.

Qualifying funding includes:

• Donations from non-members
• Gifts from external sources
• Grants from government agencies
• Financial support from foundations

We determine our status at the first annual meeting following each financial year.

If our external funding drops below $10,000, we may no longer qualify as a public benefit corporation.

This flexibility allows us to move between public benefit and regular not-for-profit status.

Our classification depends on our actual funding patterns rather than our original incorporation purposes.

We must track our funding sources carefully to determine our correct status each year.

Requirements and Compliance Obligations

Public benefit corporations must follow stricter rules than regular nonprofits.

These include specific board composition requirements and enhanced financial reporting standards.

Corporate Governance and By-Laws

PBCs face strict limits on employee representation on their boards.

Non-charitable PBCs cannot have more than one-third of directors who are employees or ex-officio directors.

Charitable PBCs have even tighter restrictions.

They cannot have any employee directors except in very limited situations that require court approval and consent from the Office of the Public Guardian and Trustee.

Our by-laws must reflect these governance requirements under ONCA.

We need to ensure our articles clearly state asset distribution rules upon dissolution.

Asset Distribution Requirements:

• Charitable PBCs: Must distribute assets to registered charities with similar purposes, governments, or government agencies
• Non-charitable PBCs: Must distribute assets to other PBCs with similar goals, governments, government agencies, or municipalities

We cannot distribute assets to members upon dissolution.

This restriction applies even if we were a PBC in any of the three previous financial years before closing.

Disclosure and Transparency

PBCs must maintain higher transparency standards than regular nonprofits.

We need to track our funding sources carefully to determine our PBC status each year.

Public funding includes grants, subsidies, and loans from federal, provincial, or municipal governments.

It also covers donations from non-members, non-directors, non-officers, and non-employees.

We must document these funding sources annually.

The $10,000 threshold applies to our previous financial year’s receipts from public sources.

Our status can change yearly if we’re not a charity.

We become a PBC at the next annual members’ meeting after crossing the threshold.

Filing and Reporting Responsibilities

PBCs must follow enhanced financial reporting requirements under ONCA.

We need to conduct financial audits or reviews when crossing the $10,000 threshold.

Our financial statements require more rigorous preparation and review processes.

These standards ensure proper accountability to the public and government funders.

We must file updated articles and by-laws that comply with PBC requirements.

Organizations incorporated before October 19, 2021 had until October 18, 2024 to update their governing documents.

Annual filings must reflect our current PBC status.

We need to report changes in funding levels that affect our classification as a public benefit corporation.

Financial Reporting and Records

Public benefit corporations face stricter financial reporting requirements than other non-profit corporations.

They must prepare comprehensive financial statements and provide broader access to corporate records.

Mandatory Financial Statements

Public benefit corporations must prepare audited financial statements annually.

These statements require review by an independent auditor licensed in Ontario.

The required financial statements include:

• Statement of financial position
• Statement of operations
• Statement of changes in net assets
• Statement of cash flows
• Notes to the financial statements

We must file these audited statements with our annual return to the government.

The deadline is within 60 days of our annual meeting.

Smaller public benefit corporations may qualify for a review engagement instead of a full audit.

This applies when annual revenues are less than $500,000 and we meet other ONCA criteria.

The financial statements must follow Canadian accounting standards.

Most public benefit corporations use Accounting Standards for Not-for-Profit Organizations (ASNPO).

Access to Corporate Records

Members have enhanced rights to access corporate records compared to regular non-profit corporations.

We must make certain documents available for inspection during business hours.

Always accessible records include:

• Articles and bylaws
• Minutes of member meetings
• Audited financial statements from the past six years
• List of directors and officers

Members can examine these records at our registered office.

We cannot charge fees for basic inspection rights.

Additional records may be requested in writing.

These include accounting records, board meeting minutes, and member registers.

We have 21 days to respond to written requests.

We can refuse access if the request is not made in good faith or could harm the corporation’s interests.

Relationship with Registered Charities

All registered charities in Ontario automatically become public benefit corporations under ONCA, regardless of their funding levels.

These organizations face the strictest rules, including severe limits on employee directors and specific asset distribution requirements when dissolving.

Special Rules for Registered Charities

Registered charities face the most restrictive rules under ONCA as public benefit corporations.

We cannot have directors who are also employees except in very limited situations.

If we want an employee to serve as a director, we need a court order allowing this arrangement.

The Office of the Public Guardian and Trustee must also approve this court order.

This rule exists to prevent conflicts of interest.

It ensures that people who benefit financially from the charity don’t control its direction.

Asset distribution rules are also strict for charitable PBCs.

When we dissolve, we must distribute our assets to:

• A registered charity with similar goals
• A government
• A government agency

We cannot distribute assets to our members under any circumstances.

This protects charitable assets for public benefit.

Transition and Compliance for Charities

Registered charities that incorporated before October 19, 2021, had until October 18, 2024, to update their governing documents.

We needed to review our bylaws and articles to ensure they follow ONCA rules.

Many existing bylaws may not comply with the new employee director restrictions.

We must update these documents to reflect the stricter standards.

If our current bylaws allow employee directors without court approval, we need to change them.

We also need to update asset distribution clauses if they don’t meet the new requirements.

Our charitable status means we’re always a PBC.

Unlike non-charitable organizations, we don’t move in and out of PBC status based on funding levels.

This provides certainty but requires ongoing compliance with the strictest rules.

Transitioning to ONCA as a Public Benefit Corporation

Organizations moving to ONCA face specific requirements and deadlines.

The transition involves updating key documents and following mandatory steps to maintain compliance.

Steps for Moving Under ONCA

The transition period for ONCA ended on October 18, 2024.

Organizations that missed this deadline must now act quickly to comply with the new regulations.

We need to file transition documents with the government.

These forms include our current by-laws and any required amendments.

This filing process keeps our organization operating legally under ONCA.

Key transition requirements include:

• Filing transition forms within required timeframes
• Paying applicable government fees
• Confirming our public benefit corporation status
• Meeting new director composition rules

Public benefit corporations must ensure no more than one-third of directors are employees.

This rule takes effect immediately upon transition.

We may need to adjust our board structure before filing.

The government decides our public benefit status based on our activities and funding.

Organizations receiving over $10,000 each year from external sources automatically qualify as public benefit corporations.

Updating Governance Documents

We must review our by-laws under ONCA.

The new act introduces different rules for meetings, voting, and director responsibilities.

We need to include these changes in our by-laws.

Essential by-law updates include:

• Director qualifications – New independence requirements for public benefit corporations
• Meeting procedures – Updated voting and notice requirements
• Conflict of interest policies – Enhanced disclosure rules
• Membership provisions – Revised member rights and obligations

We must align our by-laws with ONCA’s mandatory provisions.

Some previous by-law clauses may no longer be valid under the new act.

Our legal counsel should review all governance documents for compliance.

The Not-for-Profit Corporations Act requires specific language in certain by-law sections.

We cannot simply update existing clauses without ensuring they meet ONCA’s requirements.

Filing updated by-laws completes our transition process.

Once approved, we operate fully under ONCA’s public benefit corporation framework with all associated rights and responsibilities.

Conclusion

Understanding public benefit corporations under ONCA is essential for non-profit organizations in Ontario.

These corporations face specific rules about director composition, financial reporting, and asset distribution.

Whether your organization qualifies as a public benefit corporation depends on its charitable purposes or receiving more than $10,000 in external funding each year.

This classification brings both opportunities and obligations that require careful navigation.

We recommend consulting with experienced charity law professionals to ensure your organization meets all ONCA requirements.

At Northfield & Associates, we help non-profits understand their obligations and maintain compliance.

Get professional support today

• Email: info@northfield.biz
• Call: (416) 317-6806
• Visit us https://www.northfield.biz/
• Appointment: Schedule a FREE consultation

to discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

Frequently Asked Questions

Public benefit corporations under ONCA have specific rules about donations, directors, and charitable purposes.

Here are common questions about how these organizations work in Ontario.

What is a public benefit corporation in Ontario?

A public benefit corporation under ONCA is a nonprofit organization that serves public or charitable purposes.

These corporations fall into two main categories.

The first type includes charitable corporations.

These organizations focus on advancing education, relieving poverty, promoting religion, or supporting other charitable causes.

The second type covers non-charitable public benefit corporations.

These organizations receive more than $10,000 per year in donations, gifts, or grants from outside sources like non-members or government agencies.

What is the purpose of a public benefit corporation?

Public benefit corporations exist to serve the broader public good rather than private interests.

They work to advance charitable causes or provide services that benefit society.

These organizations must follow stricter rules than regular nonprofit corporations.

They face more requirements for financial reporting and board composition.

The purpose is to ensure transparency and accountability.

This helps protect public funds and donations that support these organizations.

What are PBC company examples?

Public benefit corporations in Ontario include registered charities like food banks and hospitals.

Educational institutions such as private schools and training centres also qualify.

Religious organizations that promote faith and community service fall under this category.

Environmental groups that receive significant donations work as public benefit corporations too.

Community centres and arts organizations often qualify when they receive substantial government grants or public donations.

Youth programs and senior services frequently operate as public benefit corporations.

What is an example of a public corporation?

A public corporation usually refers to government-owned entities or publicly-traded companies.

This differs from public benefit corporations under ONCA.

Examples include Crown corporations like Ontario Power Generation or TTC.

These organizations are owned by the government and serve public functions.

Publicly-traded companies like Canadian banks or telecommunications firms are also public corporations.

Their shares trade on stock exchanges and they report to shareholders.

What is the difference between a GOCC and a public corporation?

GOCC stands for Government-Owned and Controlled Corporation.

These are specific types of public corporations that governments create and control directly.

GOCCs operate under government oversight and serve specific public policy goals.

They often provide essential services like utilities or transportation.

Public corporations can include both GOCCs and publicly-traded companies.

The key difference is that GOCCs remain under government control while publicly-traded corporations have private shareholders.

What is another name for a public corporation?

People in Canada sometimes call public corporations “Crown corporations.” This term refers to entities owned by the government.

Publicly-traded companies may be called public companies. They are also known as listed companies.

These names describe corporations that sell shares to the public on stock exchanges.

Internationally, people use names like government enterprises or state-owned enterprises. In Ontario, people may also say public agencies or public bodies for government-controlled organizations.

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Working with Our Firm

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.

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.

---

About Northfield

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.

How to Start a Private Foundation in Toronto, Ontario

Foundations, whether private or public, play a significant role in supporting charitable causes across Canada. If you’re considering starting a foundation in Toronto, Ontario, or anywhere else in Canada, understanding the process, responsibilities, and differences between private and public foundations is crucial. This guide will walk you through the key steps and considerations, as well as highlight the benefits of establishing either type of foundation.

What Is a Private and Public Foundation in Canada?

In Canada, both private and public foundations are registered charities that provide financial support to other charitable organizations. The main difference between the two lies in their funding sources and operational models:

• Private Foundation: Typically funded by a single individual, family, or corporation. It is managed by a small group of trustees or directors, often family members, who control the distribution of funds. Private foundations usually do not engage in active fundraising or solicit donations from the public.
• Public Foundation: Funded by a broader group of individuals, corporations, and other foundations. Public foundations actively raise funds and often have a more diverse board of directors. They are more involved in public fundraising campaigns and may support a wider range of charitable initiatives.

Both types of foundations are tax-exempt when registered with the Canada Revenue Agency (CRA) and focus on supporting charitable causes either through grants or by conducting their own charitable activities.

How to Set Up a Public or Private Foundation in Canada?

Setting up a foundation in Canada lets you support causes you care about while getting tax benefits. The setup process is similar for both public and private foundations, but key differences affect your choice. Private foundations use your own money and give you more control. Public foundations collect donations from many sources and follow different rules.

Whether you’re setting up a private or public foundation, the process is similar, though certain elements will vary depending on the foundation type.

Determine the Legal Structure: Trust or Corporation

Foundations in Canada can be established either as a trust or a corporation. If setting up a trust, you will need to create a trust deed. If establishing a corporation, you will need to incorporate the foundation under provincial, territorial, or federal law. In Ontario, you would register your foundation under the Ontario Not-for-Profit Corporations Act (ONCA).

Incorporation and Name Selection

Choosing a unique name is an important step in the process. If the name includes a person’s name, written consent from the individual or family may be required. To ensure that your chosen name is unique, you can request a NUANS (Newly Upgraded Automated Name Search) report, which checks for similar business names across Canada.

Apply for Charitable Status with the CRA

After incorporation, the next step is applying for charitable status with the CRA. This is a crucial step because it allows your foundation to be tax-exempt and issue tax receipts to donors. The application process involves submitting detailed documentation, including a description of the foundation’s activities, governance structure, and charitable purposes.

The CRA will determine whether your foundation qualifies as a private foundation, public foundation, or charitable organization based on factors such as funding sources, the relationship between directors or trustees, and the foundation’s operational goals. Public foundations must demonstrate a broader funding base and typically have more external directors than private foundations.

Board of Directors for Foundation

Both private and public foundations require a board of directors. In Ontario, at least three directors are required to incorporate a foundation. Each director must provide an original signature on the incorporation documents. Public foundations typically have a larger and more diverse board compared to private foundations, which are often family-run. Federally incorporated Private Foundations can suffice with just one director.

Apply for a Charitable Tax Number

Once your foundation is registered as a charity with the CRA, it can apply for a charitable tax number. This allows the foundation to issue tax receipts to donors, which can be a major incentive for contributions.

How Much Does It Cost to Start a Private or Public Foundation?

Starting a foundation in Canada involves some legal and administrative costs. If you choose to work with a lawyer expert in charity law, expect fees to range from $7,000 to $15,000 for comprehensive assistance throughout the setup process.

• Incorporating a Foundation: Incorporation fees for a non-profit foundation (whether private or public) typically range between $2,000 and $3,000 in legal fees. Additionally, you’ll need to pay government filing fees, which can range between $200-$250, depending on which provincial (or federal) jurisdiction the Foundation is incorporating in. A typical foundation can be incorporated in as little as 1-3 business days.
• Application for Charitable and Foundation Status: Applying for charitable and foundation registration can take 6-8 months, depending on the complexity of the foundation’s operations and the CRA’s review process. However, most Family and Private Foundations who are exclusively donating to other charities are registered within 3-4 months, on average.

What Are the Benefits of Starting a Foundation in Canada?

Both private and public foundations offer several advantages:

1. Tax Benefits: Registered foundations are exempt from paying income tax in Canada. They can also issue tax receipts to donors, which provides significant tax relief through charitable tax credits.
2. Philanthropic Legacy: Foundations, particularly private ones, offer families an opportunity to build a lasting legacy. They allow individuals or families to maintain control over how funds are distributed, ensuring that donations align with their philanthropic vision for generations to come.
3. Control and Flexibility: Private foundations, in particular, offer control over decision-making and grant distribution. Public foundations, while more reliant on external donations, also benefit from having a wider reach and broader community support.
4. Structured Giving: Foundations provide a structured and strategic approach to charitable giving. Whether through grants, scholarships, or direct donations to charities, foundations allow for more organized philanthropic efforts that align with long-term goals.

Is Starting a Private or Public Foundation Right for You?

Setting up a private or public foundation in Toronto can be a rewarding way to support charitable causes and leave a lasting philanthropic legacy. Both private and public foundations offer significant tax benefits, control over charitable giving, and the opportunity to make a lasting impact on communities and causes that matter most to you.

Before starting the process, it’s important to consult with experienced charity and not-for-profit lawyers to ensure that your foundation complies with all regulatory requirements and aligns with your charitable goals. Whether you’re setting up a private family foundation or a public foundation that reaches out to the wider community, the steps outlined above can help guide you through the process.

Set up a free call with our team

• Email: info@northfield.biz
• Call: (416) 317-6806
• Visit us https://www.northfield.biz/
• Appointment: Schedule a FREE consultation

to discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

Frequently Asked Questions

Get quick answers to common questions about setting up foundations in Canada.

What is the minimum amount to start a private foundation?

There’s no legal minimum amount required to start a private foundation in Canada. However, you should have enough funds to cover setup costs (typically $5,000-$15,000) plus ongoing operational expenses. Most experts recommend starting with at least $100,000 to make the foundation financially viable long-term.

How much does it cost to start a foundation in Canada?

Starting a foundation typically costs between $5,000 and $15,000. This includes legal fees for incorporation ($2,000-$8,000), application fees to Canada Revenue Agency, accounting setup, and initial administrative costs. Annual operating costs range from $3,000-$10,000 depending on the foundation’s size and activities.

What is the difference between a foundation and a private foundation?

A foundation is a general term for charitable organizations that distribute grants. A private foundation is a specific type funded primarily by one source (individual, family, or corporation) with more control over grant-making. Public foundations receive donations from multiple sources and have broader public involvement in their governance.

What is the alternative to a private foundation?

Main alternatives include donor-advised funds (simpler and cheaper to set up), charitable remainder trusts, direct giving to existing charities, or establishing a fund within a community foundation. Donor-advised funds offer similar tax benefits with less administrative burden and lower minimums.

What is the structure of a private foundation?

A private foundation operates as a non-profit corporation with a board of directors (minimum 3 members). The structure includes founding documents, bylaws, and policies for grant-making. The board oversees operations, approves grants, and ensures compliance with charitable regulations and annual disbursement requirements.

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.

Get professional support today

• Email: info@northfield.biz
• Call: (416) 317-6806
• Visit us https://www.northfield.biz/
• Appointment: Schedule a FREE consultation

to discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

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Working with Our Firm

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.

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.

---

About Northfield

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.

How Can Canadian Charities Manage Their CRA Business Account?

For any registered charity in Canada, managing your business account with the Canada Revenue Agency (CRA) is key to staying compliant and ensuring smooth operations. The CRA business account is where you handle important tasks like filing annual returns, updating key information, and fulfilling legal obligations. But how do members, directors, officers, and volunteers get access to this account, and what responsibilities come with it? Let’s walk through the process in clear terms.

What is a CRA Business Account?

Every registered charity in Canada needs to manage its activities with the CRA through what’s known as a CRA business account. This account isn’t just for businesses—registered charities use it to file annual returns, make changes to organizational details, and ensure compliance with the CRA’s rules and regulations.

Why Does Your Charity Need a CRA Business Account?

A CRA business account serves multiple purposes, and it’s important for several reasons:

• Filing Returns: Registered charities must submit their T3010 form annually. This lets the CRA review the charity’s operations and financial status, ensuring it continues to meet its obligations.
• Updating Key Information: Charities need to notify the CRA when significant changes occur, such as appointing new directors or officers, changing addresses, or revising charitable activities.
• Maintaining Compliance: Staying on top of updates and filings through the CRA business account helps charities avoid penalties or the risk of losing their charitable registration.

Steps to Access Your Charity’s CRA Business Account

Let’s look at how members, directors, officers, and even volunteers can access a charity’s CRA business account.

Step 1: Set Up a Personal My Business Account

Before accessing your charity’s business account, you’ll need to set up your own My Business Account with the CRA:

1. Go to the CRA website: On the CRA’s homepage, find the option to sign in to “My Business Account.”
2. Sign in: You can either log in using a CRA user ID and password or use a partner login, such as through your bank.
3. Set up security: After logging in, you’ll need to answer some security questions to verify your identity. This ensures your account is secure and protected.
4. Request access to the charity’s business account: Once you’ve set up your My Business Account, you’ll need to link it to the charity’s business number to gain access.

Step 2: Authorization Process

For members, directors, officers, or volunteers to access the charity’s account, they must be authorized by the charity itself. Here’s how that works:

• Authorization by the Charity: A person with the proper authority, usually a director, must formally authorize others by using the CRA’s online services. This gives the authorized individual access to the charity’s business account.
• Access as an Authorized Representative: After being authorized, the individual can log in to the charity’s CRA business account and manage its financial and tax matters.

Step 3: What You Can Do as an Authorized Representative

Once you’re authorized to manage the charity’s CRA business account, here are some of the key tasks you’ll be responsible for:

• View Financial Information: Check the charity’s records and financial data.
• File Returns and Forms: Complete and submit required filings, such as the annual T3010 form.
• Update Charity Information: Make changes to the charity’s directors, address, or other details as needed.

Responsibilities of Members, Directors, Officers, and Volunteers with access comes responsibility. Members, directors, officers, and volunteers need to ensure they handle the CRA business account with care:

• Legal Responsibility: Directors and officers have a legal duty to ensure the charity complies with CRA regulations. If the charity is found to be non-compliant, they could be held personally liable.
• Accurate Record Keeping: It’s important to keep thorough records of all submissions and updates to ensure the charity remains transparent and accountable.
• Regular Monitoring: Access the CRA business account regularly to stay on top of deadlines and ensure the charity’s information is always up to date.

What Happens If You Don’t Keep Up with CRA Requirements?

Failing to manage the CRA business account can lead to serious consequences:

• Loss of Charitable Status: If the charity doesn’t file its annual returns or keep its information updated, the CRA can revoke its charitable registration. This would mean losing the ability to issue donation receipts, which is a major blow for fundraising.
• Financial Penalties: Non-compliance can result in fines or penalties, putting additional financial strain on the charity.
• Damage to Reputation: A charity that fails to meet CRA requirements could lose the trust of donors, sponsors, and the community, which can be difficult to rebuild.

Conclusion

Managing your charity’s CRA business account is a key part of staying compliant with Canadian laws. Members, directors, officers, and volunteers must understand their responsibilities and take the necessary steps to keep the charity in good standing. From filing returns to updating information, regular monitoring of the account will ensure the charity avoids penalties and continues its important work.

‍By taking these steps, your charity can continue to operate smoothly and fulfill its mission without unnecessary obstacles.

Get Expert Help with Your CRA Business Account

At Northfield & Associates, we help Canadian charities navigate CRA compliance complexities with confidence. Our experienced team provides guidance on account management procedures, regulatory requirements, and issue resolution to protect your organization’s mission and charitable status.

Don’t let CRA compliance challenges threaten your charity’s future.

Get professional support today

• Email: info@northfield.biz
• Call: (416) 317-6806
• Visit us https://www.northfield.biz/
• Appointment: Schedule a FREE consultation

to discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

Frequently Asked Questions

Managing your charity’s CRA business account involves understanding complex regulations, filing requirements, and compliance obligations. These frequently asked questions address the most common concerns Canadian charities face when dealing with the Canada Revenue Agency, from registration numbers and reporting requirements to record-keeping and potential sanctions.

What is a CRA registration number? 

A CRA registration number is a unique identifier assigned to registered charities by the Canada Revenue Agency. It typically starts with the digits 10001 and is followed by four additional digits. Charities must include this number on all official donation receipts and use it when filing returns or communicating with the CRA.

What are the sanctions of charities in CRA? 

The CRA can impose various sanctions on non-compliant charities including monetary penalties, suspension of receipting privileges, compliance agreements, and complete revocation of charitable status. Minor violations may result in education letters or penalties, while serious issues like misuse of funds can lead to immediate revocation and loss of tax-exempt status.

What are the charity tax rules in Canada? 

Canadian charities are exempt from income tax but must follow strict rules. They must spend at least 3.5% of assets annually on charitable activities, cannot engage in prohibited political activities, must issue proper donation receipts, and cannot provide undue private benefits. Charities must also maintain proper books and records and file annual returns.

Can a charity own a for-profit business in Canada? 

Yes, but with restrictions. Charities can own for-profit businesses if the business furthers the charity’s purposes or if profits support charitable activities. However, operating unrelated businesses can jeopardize charitable status. The CRA evaluates each situation based on factors like the business’s connection to charitable purposes and the time spent on commercial activities.

What are the requirements for charity reporting in Canada? 

Registered charities must file annual T3010 returns within six months of their fiscal year-end. The return includes detailed financial information, program descriptions, governance details, and compensation data. Larger charities may need audited financial statements, while smaller ones need review engagements or compiled statements depending on their revenue.

How long do charities need to keep financial records in Canada? 

Canadian charities must keep books and records for at least six years after the end of the fiscal year they relate to. This includes receipts, invoices, bank statements, donation records, board minutes, and all supporting documentation. The CRA can request these records during audits or compliance reviews.

Do Canadian charities file tax returns? 

Yes, registered charities must file annual T3010 Registered Charity Information Returns even though they’re tax-exempt. This return provides the CRA with detailed information about the charity’s finances, activities, and governance. Failure to file can result in penalties and eventual loss of charitable status.

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.

Get professional support today

• Email: info@northfield.biz
• Call: (416) 317-6806
• Visit us https://www.northfield.biz/
• Appointment: Schedule a FREE consultation

to discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

---

Working with Our Firm

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.

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.

---

About Northfield

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.