Letters Patent vs Articles of Incorporation 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—and understanding the difference between letters patent and articles of incorporation is crucial for your organization's legal compliance and governance.

Whether you're incorporating a new nonprofit, transitioning an existing organization under ONCA, or applying for CRA charity registration, knowing which governing document applies to your organization affects everything from board structure to amendment procedures. In this guide, we'll break down what these terms mean, how they differ, and what you need to know about federal vs provincial nonprofit incorporation in Canada.

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
• Rules for amending the organization's structure
• Restrictions on dissolving the organization

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. Organizations that didn't transition by the ONCA deadline (October 19, 2024) faced administrative dissolution, though some extensions were granted.
• 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.

How Letters Patent and Articles of Incorporation Affect CRA Charity Registration

Whether your organization operates under letters patent or articles of incorporation has direct implications for your CRA charity registration. Here's what you need to know:

Charitable Objects Must Be Clearly Stated

Both documents must contain your organization's charitable objects—the specific purposes that qualify your organization as a charity under Canadian law. The CRA requires these objects to fall into one or more of the four recognized charitable categories:

• Relief of poverty
• Advancement of education
• Advancement of religion
• Other purposes beneficial to the community

CRA Requirements for Charitable Purposes

When drafting either letters patent or articles of incorporation for a charity, the charitable objects must be:

• Exclusively charitable: Your organization cannot have non-charitable purposes mixed in
• Specific and clear: Vague language like "doing good works" won't meet CRA standards
• Legally compliant: Objects must align with current charity law definitions

Common Mistakes in Drafting Charitable Objects

Many organizations run into problems when their governing documents contain:

• Purposes that are too broad or vague
• Non-charitable activities listed as objects (like political activities)
• Objects that could benefit private individuals rather than the public
• Language that doesn't match CRA's interpretation of charitable purposes

Transitioning Your Governing Documents

If you're transitioning from letters patent to articles of incorporation, you generally do not need to reapply to the CRA for charity registration. However, you must:

• Ensure your charitable objects remain substantially the same
• Notify the CRA of any changes to your governing documents
• Submit updated articles to the CRA within required timelines
• Maintain consistency between your articles and your T3010 annual return

If you're making significant changes to your charitable objects during the transition, consult with a charity lawyer first—material changes may require CRA approval to maintain your registered status.

Key Differences: Letters Patent vs Articles of Incorporation

Understanding the practical differences between these two types of governing documents helps you appreciate why transitioning from letters patent to articles of incorporation offers significant advantages:

Governance Flexibility

Letters Patent:

• Often specify exact number of directors (e.g., "seven directors")
• Rigid board structure requirements
• Limited flexibility for organizational growth

Articles of Incorporation:

• Allow for variable board sizes (e.g., "minimum 3, maximum 15 directors")
• More adaptable governance structures
• Easier to adjust as organization evolves

Amendment Process

Letters Patent:

• Require supplementary letters patent for most changes
• More complex and costly amendment procedures
• Government approval needed for structural changes

Articles of Incorporation:

• Can be amended through special resolution in most cases
• Simpler, faster amendment process
• More cost-effective to update

Modern Governance Features

Letters Patent:

• Limited provisions for electronic meetings
• Older proxy and voting procedures
• May not address current governance best practices

Articles of Incorporation:

• Specifically allow electronic meetings and voting
• Modern member rights and notification requirements
• Built-in provisions for current governance standards

Director Liability Protections

Letters Patent:

• Often lack specific indemnification clauses
• May have outdated liability provisions

Articles of Incorporation:

• Include modern indemnification protections for directors
• Clear provisions regarding director duties and liabilities
• Better alignment with current corporate law protections

Reporting Requirements

Letters Patent:

• May be subject to older reporting regimes
• Less standardized disclosure requirements

Articles of Incorporation:

• Clear, standardized annual filing requirements
• Consistent reporting across all organizations under same Act
• Better compliance tracking systems

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 or "continuance" federally)

How to Transition from Letters Patent to Articles of Incorporation

If your organization still operates under letters patent, transitioning to articles of incorporation—known as continuance—is an important step for compliance and modernizing your governance structure.

Why Transition?

Transitioning from letters patent to articles of incorporation provides several benefits:

• Legal compliance: Meet current provincial or federal requirements
• Governance flexibility: Adopt modern governance practices like electronic meetings
• Simplified amendments: Make future changes more easily and cost-effectively
• Better indemnification: Protect your directors with updated liability provisions
• Clearer structure: Benefit from standardized, contemporary corporate language

ONCA Transition Requirements (Ontario)

For Ontario nonprofits, the ONCA transition deadline was October 19, 2024. Organizations that missed this deadline risked administrative dissolution, though some received extensions. If your organization hasn't transitioned yet:

• Contact ServiceOntario or a charity lawyer immediately
• File your articles of amendment or continuance
• Update your bylaws to comply with ONCA
• Ensure your charitable objects remain compliant with CRA requirements

Federal Continuance Process

For federal nonprofits operating under letters patent, the continuance process involves:

• Filing articles of continuance with Corporations Canada
• Adopting new bylaws that comply with the Canada Not-for-profit Corporations Act
• Passing special resolutions at a members' meeting
• Updating your charitable objects if necessary

What Documents Need Updating

When transitioning, you'll typically need to update:

• Articles of Continuance or Amendment: Your new governing document
• Bylaws: Must comply with current Act (ONCA or federal NFP Act)
• Charitable objects: Reviewed and confirmed to meet CRA standards
• Member register: Updated to reflect new requirements
• Director register: Ensuring compliance with new standards

Costs and Timeline

The continuance process typically involves:

• Government filing fees: $155-$330 depending on jurisdiction
• Legal fees: $2,000-$5,000+ depending on complexity
• Timeline: 2-6 months from start to completion, depending on organization's readiness

Organizations with complex structures, multiple classes of members, or unique charitable objects may require more time and legal support.

Working with Legal Counsel

Transitioning from letters patent to articles of incorporation is a legal process that affects your organization's fundamental structure. It's recommended to work with a charity lawyer who can:

• Review your current letters patent and bylaws
• Draft compliant articles of continuance
• Ensure charitable objects meet CRA requirements
• Guide your board through required resolutions and meetings
• File all necessary documents with government authorities

Common Mistakes to Avoid

When dealing with letters patent and articles of incorporation, organizations frequently make these mistakes:

Not Transitioning by Required Deadlines

Many Ontario nonprofits missed the ONCA transition deadline, resulting in administrative dissolution or scrambling for last-minute compliance. Always monitor regulatory deadlines and plan your transition well in advance.

Changing Charitable Objects Without CRA Approval

If you're a registered charity transitioning to articles of incorporation, don't make substantial changes to your charitable objects without consulting the CRA. Material changes could jeopardize your registered status.

Assuming Letters Patent Automatically Convert

Letters patent do not automatically become articles of incorporation. You must file the proper continuance or amendment documents with the government to complete the transition.

Not Updating Bylaws

Transitioning your governing document without updating your bylaws creates inconsistencies. Your bylaws must align with your new articles of incorporation and comply with the current Act.

Failing to Involve Legal Counsel

Corporate transitions are complex legal processes. Organizations that attempt DIY transitions often end up with non-compliant documents, miss required filings, or create governance problems that are costly to fix later.

Ignoring Member Approval Requirements

Continuance typically requires a special resolution passed by members. Failing to properly notify members, hold required meetings, or achieve the necessary voting threshold can invalidate your transition.

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 that meets both government and CRA requirements.

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Frequently Asked Questions

Letters patent served as the old legal document for forming nonprofits before 2010 in Ontario. Articles of incorporation replaced them under modern federal and provincial laws.

Understanding these documents helps clarify how Canadian nonprofits are legally established today.

What are letters patent in Canada?

Letters patent were the original documents used to form nonprofits and corporations in Canada, granting them legal existence. They were public documents containing key information like the organization's name, purpose, and rules. In Ontario, they were used until 2010; federally, until 2011. Organizations with older structures may still operate under letters patent but may need to update their documents to comply with modern laws.

What are Articles of Incorporation in Canada?

Articles of incorporation are now the standard legal documents for creating nonprofits and corporations in Canada. They are filed with either Corporations Canada or ServiceOntario, depending on whether the organization is federal or provincial. Articles include important details about the organization's name, purpose, structure, and rules. Once approved, the organization becomes a legal entity and can operate officially.

What is a certificate of Incorporation in Canada?

A certificate of incorporation is the official document issued by the government after your articles of incorporation are approved. It confirms your organization's legal status and includes details like the incorporation date and number. This certificate is often required to open bank accounts or conduct business in Canada.

What are articles of association in Canada?

Articles of association are not commonly used in Canadian law. Instead, Canada uses articles of incorporation, which serve the same purpose of outlining the structure and rules of a corporation. Some older organizations might still have articles of association, but most use articles of incorporation along with bylaws for governance.

What are the forms of articles of association?

Canada does not use articles of association as standard. The typical documents are articles of incorporation, bylaws, and sometimes policies and procedures. These documents together set out how a corporation is structured and governed, with specific forms varying by federal or provincial incorporation.

What implications do Letters Patent and Articles of Incorporation have on the governance and structure of a Canadian corporation?

Both letters patent and articles of incorporation create the legal framework for a corporation, setting its purpose and rules. Letters patent often mean an older governance structure, which may need updating to comply with current laws. Articles of incorporation offer more flexibility, such as variable board sizes and electronic voting. Transitioning to articles can modernize governance and ensure compliance with today's legal requirements.

Do I need to convert my letters patent to articles of incorporation?

If your organization is incorporated in Ontario and was formed before October 2021, you were required to transition to articles of incorporation under ONCA by October 19, 2024. Organizations that missed this deadline may face administrative dissolution. For federal nonprofits formed before 2011, continuance under the Canada Not-for-profit Corporations Act is strongly recommended but may not have a hard deadline. Transitioning provides governance flexibility and ensures compliance with current corporate law.