Are Articles of Incorporation the Same as Letters Patent in Canada?
If you're thinking about starting a charity or nonprofit in Canada, especially in Ontario, you may have come across terms like Articles of Incorporation and Letters Patent. They might sound the same, but they’re not. Let’s break down what these terms mean and how they apply to your organization.
What Are Letters Patent?
Letters patent are an old-fashioned way of officially and legally starting a nonprofit. Before 2010, this was the legal document you received from the government when your nonprofit was approved in Ontario. Think of it like a birth certificate—it gave your group legal life.
The word patent comes from a Latin phrase meaning “open letter.” It’s called that because it’s a public document. The government uses it to show that they’ve allowed a group or company to exist.
What Is the Purpose of Letters Patent?
The purpose of a letter patent was to create a legal entity. It told the world:
- Who started the organization
- What its goals are (like helping the community, raising awareness, or providing services)
- Who’s running it (called directors)
- What rules will it follow
For charities, the letters patent also included charitable objects, which are specific goals your organization must stick to in order to stay registered as a charity with the CRA.
Are Articles of Incorporation the Same as Letters Patent?
Not exactly. Articles of Incorporation replaced letters patent when newer laws came into effect.
- For Ontario nonprofits, the Not-for-Profit Corporations Act (ONCA) came into force in October 2021. Since then, new nonprofits apply using Articles of Incorporation instead of letters patent.
- For federal nonprofits, the Canada Not-for-profit Corporations Act replaced the old system in 2011. That means federally incorporated charities and nonprofits now also use Articles of Incorporation.
So if you're starting a nonprofit or charity today, you won’t use letters patent anymore. But if your organization was created before these new laws, you might still have letters patent on file. That’s why you’ll hear both terms, even though only one is still used for new applications.
What Are Articles of Incorporation?
Articles of Incorporation are the modern version of letters patent. They’re a form you submit to either:
- Corporations Canada, if you want to register your nonprofit at the federal level, or
- ServiceOntario, if you’re incorporating a nonprofit within Ontario
This document includes similar information to letters patent:
- The legal name of your organization
- The purpose or mission of the nonprofit or charity
- The structure (who the directors are, where the office is, etc.)
- Any special rules or restrictions
Once approved, you officially exist as a legal nonprofit or charity. You can then open bank accounts, hire staff, apply for grants, and register as a charity if eligible.
Do I Need to Worry About Letters Patent?
If you’re starting a new nonprofit, probably not. You’ll be using Articles of Incorporation instead.
But if you’re already part of a charity that was formed before 2011 (federal) or before 2021 (Ontario), your organization may still be governed by letters patent. That means:
- You should review your letters patent and bylaws
- You may need to update your documents to meet current laws
- You might need to switch over to the new rules (called "transitioning under ONCA" in Ontario)
Final Thoughts
To keep it simple: Letters patent are the old version, and articles of incorporation are the new version of the same idea—legally forming your nonprofit or charity.
If you're unsure what your organization has, or if you're starting fresh, let us help. Getting it right at the beginning—or transitioning correctly—is key to running a successful charity.
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