Not-for-Profit Incorporation

Q: What are the benefits of incorporating a Not-for-Profit? Can't we just run it as an unincorporated association with a simple constitution? 

A: There are both benefits and risks to not incorporating, but in our experience, it is generally recommended that a not-for-profit incorporate.

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Benefits of Not Incorporating a Not-for-Profit

1. Not-for-Profits that are not incorporated are not governed by legislation, so they have a lot more flexibility.

2. Do not have to file annual corporate returns with Corporations Canada

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Benefits of Incorporating a Not-for-Profit (and Risks of Not Incorporating)

1. Liability: Unincorporated NFPs are not legally independent from their members, so does not protect them from liability. Members of incorporated charities have liability protection.

2. Dispute resolution: Incorporated Not-for-profits have legislative guidance to resolve disputes, which is absent in the case of non-incorporated NFPs.

3. Contracts/Property: Only incorporated not-for-profits can enter contracts, sue and hold property.

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