How to Start a Charity Organization in Ontario

The Ontario government has set up laws to ensure most charities develop into more than a series of collection boxes.

With the Ontario government regularly uncovering fraudulent charities, the legal requirements for a start-up charity may seem exhaustive. However, with careful consideration of the legal filings required--and a competent lawyer--the steps to establish a charity in Ontario are both straightforward and relatively inexpensive. There are several ways to establish a charity, the most common involving filing an application with the Ontario Ministry of Consumer and Business Services.

Things You'll Need

• Lawyer (fee will vary)
• C$500-C$715
• Cover letter describing purpose of charity
• Two copies of "Application for Incorporation Without Share Capital" (Form 2)
• Completed "Request for a Business Number (BN)" Form RC1
• Completed T2050 "Application to Register a Charity" Form

Instructions

Apply for Recognition

1. Write a detailed cover letter that describes why your charity is "charitable in law." The government must be able to recognize that your charity will relieve poverty, provide educational advancement, advance a religious cause or any cause the law would deem is for "public benefit."

2. Download an "Application For Incorporation of a Corporation Without Share Capital" form from ServiceOntario.ca. Fill it out completely. Make three copies of the completed form.

3. Send two copies of the completed "Application For Incorporation of a Corporation Without Share Capital" form, your charity's cover letter and a fee of C$305 as a check or money order to:

   The Ontario Office of Public Guardian & Trustee
   Charitable Property Program
   595 Bay Street, Suite 800
   Toronto, ON
   M5G 2M6

4. Go to nuans-canada.ca and purchase a NUANS business name search report for Ontario. It will cost C$40. This is to ensure there is no business or charity with the same name as the name you intend for your charity.

5. Send two copies of the "Application For Incorporation of a Corporation Without Share Capital" form, a cover letter, a NUANS business name search report and C$155 in a check or money order--or C$410 to receive a faster response--to:

   The Ministry of Consumer and Business Services
   Companies and Personal Property Security Branch
   393 University Ave., Suite 200
   Toronto, ON
   M5G 2M2

Tax Exemption After Successful Incorporation

1. Send the "Initial Return" form, provided to you after successful incorporation, with no fee attached to:

   Corporate Notices Section
   Companies Branch
   Ministry of Consumer and Commercial Relations
   393 University Ave., Suite 200
   Toronto, ON
   M5G 2M2

2. Mail a copy of the Ontario Letters Patent received after successful incorporation, along with the charity's address, legal name, and notification that Canada Revenue Agency business and identification numbers will be assigned in the future to:

   The Ontario Office of Public Guardian & Trustee
   Charitable Property Program
   595 Bay Street, Suite 800
   Toronto, ON
   M5G 2M6

3. Fill out an "Application to Register a Charity under the Income Tax Act" and mail it to:

   Charities Directorate
   Canada Customs and Revenue Agency
   Ottawa, ON
   K1A 0L5

4. Complete a Request for a Business Number (BN), Form RC1 and submit it to any Canada Revenue Agency Tax Services Office. See Resource 1 to find the Tax Services Office nearest to you.

Tips & Warnings

• Although a lawyer is not required, it is advised that you hire one.

• Draw up an organizational plan, business plan, first budget and other documents in case the Ontario or federal government requests additional information at any time during the process.

• If the Ontario government decides that your organization does not meet the criteria of a charity, your letters patent and status as a corporation will be denied.

• Also, most transactions completed by a charity are HST tax exempt. Exceptions are in-house magazine publishing sales, tuck shop sales or fundraisers that involve any form of gambling.

References

• Ministry of the Attorney General of Ontario: "Charities"
• Ministry of the Attorney General of Ontario: "Non-For-Profit Incorporator's Handbook"
• Hurwit & Associates: "Initial Filings for Ontario Nonprofit Organizations"
• Canada Revenue Agency: HST Information for Charities
• NUANS Searches: "What is NUANS Report?"

Resources

• Canada Revenue Agency: Tax services offices and tax centres