What is a Non-Profit Corporation?
The main classes of corporations are business corporations and non-profit corporations.
A business corporation is formed to make a profit and to distribute the profit to its shareholders in the form of dividends. Business corporations are regulated by The Business Corporations Act which is administered by the Corporate Registry at Information Services Corporation (ISC).
A non-profit corporation, on the other hand, is formed to carry on activities for purposes other than personal financial gain. A non-profit corporation can earn a profit, but the profit must be used to further the goals of the group rather than to pay dividends to its membership. Most activities of a non-profit corporation are not of a commercial nature. Examples of non-profit corporations are sports groups, activity clubs, dance groups, daycares, and service groups.
The Non-profit Corporations Act, 1995 governs non-profit corporations in Saskatchewan. The Act is administered by the Corporate Registry at Information Services Corporation (ISC). Non-profit corporations are also subject to all laws of contract, tort, labour standards, etc.
This booklet contains information relating only to non-profit corporations incorporated provincially under The Non-profit Corporations Act, 1995. The Act does not apply to credit unions or co-operatives. A co-operative organization will need to obtain other information relating to co-operatives.
Types of Non-Profit Corporations
There are two types of non-profit corporations: membership corporations and charitable corporations. It is necessary to distinguish between the two types because the responsibilities of each vary.
A membership corporation carries on activities that are primarily for the benefit of its members. It is supported by its members through fees, donations, loans, or any combination of these. Examples of membership corporations are golf clubs, social clubs, special interest organizations, daycares, etc.
A charitable corporation carries on activities that are primarily for the benefit of the public. A non-profit corporation is a charitable corporation if it designated itself as one when it became a corporation. Even if it did not designate itself as charitable, a non‑profit will be considered to be a charitable corporation under the Act if it does any of the following...
- solicits donations from the public
- receives government grants in excess of 10% of its yearly income
- registers as a charity within the meaning of the Income Tax Act
Remember, both types of corporations have members. A corporation is not a membership corporation just because it has members; a charitable corporation has members too.
- usually financed by members through membership fees, loans, fundraising
- primarily for the benefit of members
- require at least one director
- members may receive remaining property on dissolution
- may invest its funds as directors think fit, subject to the limitations contained in any gifts and the articles or bylaws
- usually financed by government grants, donations, public property
- primarily for the benefit of the public
- require at least three directors
- members may not receive remaining property on dissolution
- may invest its funds in shares, debentures, bonds, mortgages, or other financial instruments (including mutual funds) in which trustees are by law permitted to invest
- have more stringent audit and financial review requirements
Creating a Non-Profit Corporation
Incorporating gives an organization legal status. It is not essential for a non-profit organization to incorporate. Whether an organization decides to incorporate or not depends upon its activities, nature, and type of organization.
When a non-profit organization is incorporated it becomes a legal entity with virtually the same powers as an individual. An incorporated organization can enter into contracts, buy land, borrow money, have bank accounts, etc., in its own name.
Advantages to incorporating include...
- liability of the members and directors is limited (for example, they are not personally liable for debts of the corporation)
- continuity of the organization is assured while the membership changes
- corporation can own property in its name regardless of membership change
- ability to bring a legal action in its own name (an unincorporated body cannot)
- chances of receiving government grants may increase because of the stability the organization appears to have
An unincorporated association is created by an agreement between individuals, and has no legal status. The members are personally liable to the creditors for the full amount of any debts. An unincorporated body cannot sue or be sued; members must sue or be sued personally. Title to property has to be in all the members' names if the group is not incorporated. This can make selling the property difficult. Some limitations associated with being an unincorporated association may be overcome by the creation of a trust, but a discussion of trusts is beyond the scope of this booklet.
Where to Incorporate
An organization may incorporate federally or provincially. This decision is based on the location of the organization. If the organization is to carry on its activities in more than one province under the same corporate name and wishes to move its registered office around the country with ease, it will incorporate federally. A local organization that will remain in the community or province usually incorporates provincially. An organization that is incorporated federally may also be required to register provincially, depending on the nature of its activities in Saskatchewan. This booklet deals with incorporating a corporation provincially.
Similarities may exist for incorporating federally. For further information on incorporating federally, contact Corporations Canada at the address listed in Getting More Information.
Registering as a Charity
If an organization is created in Canada, is non-profit and is charitable in purpose, it may qualify as a charity within the meaning of the Income Tax Act. By submitting a formal application and the required documents to the Canada Revenue Agency (CRA), an organization may become a registered charity and receive a registration number.
Benefits of becoming a registered charity are that the organization maintains its tax exempt status and can issue official receipts to donors, to be used in claiming tax deductions.
For the necessary forms and information to register as a charity, contact the CRA at the address listed in Getting More Information.
How to Incorporate a Non-Profit Organization
One or more persons may incorporate a corporation. The individuals must be at least 18 years of age and mentally competent. They cannot be bankrupt. Whether or not the non-profit organization needs the help of legal or accounting professionals to incorporate depends on the nature of the organization. If the organization is or may become large and complex, professional help may be needed.
There are two options for submitting an application for incorporation:
- Apply online through Business Registrations Saskatchewan at www.isc.ca/businessregistrations. This easy to use online service will not only allow you to complete all the steps to incorporate your non-profit organization, it will also get your non-profit organization registered with Workers Compensation Board (WCB) and the Ministry of Finance (for PST).
- Download an Incorporation Kit from the Corporate Registry website www.isc.ca/corporateregistry. This website has all the necessary forms and the instructions for how to complete them. It is typically faster and more convenient to complete the work online. Simply submit the completed paperwork to the Corporate Registry by fax, e-mail, mail or in person. You will need to register with Workers Compensation Board (WCB) and the Ministry of Finance (for PST) separately if you register your non-profit organization this way.
The four forms you need are Request for Name Search and Reservation, Articles of Incorporation, Notice of Registered Office and Notice of Directors. Once the forms are completed and returned to the Corporate Registry with the necessary fees, the Corporate Registry will issue a Certificate of Incorporation.
Request for Name Search and Reservation
The organization's name must be the same on each form, including abbreviations and punctuation. There are some guidelines to keep in mind when choosing a name. The name must end with "Inc.", "Incorporated", "Incorporée", "Corp." or "Corporation." The name must also include a distinctive element to distinguish the organization from other organizations in a similar industry, as well as a descriptive element that explains the type of work you'll be doing.
It is a good idea to have the name of the organization searched before completing the incorporation forms. An organization can easily complete their request for a name search and reserve online using the Business Registrations Saskatchewan website (www.isc.ca/businessregistrations). If the proposed corporation's name is already being used, or is misleading or deceptive in any way, the Corporate Registry will not accept the name. If the name is available, it may be reserved for 90 days upon request. Having the name searched before completing the forms saves time in the event that the name is not available or acceptable. A fee is charged for this service whether it is done before or at the time the other forms are submitted.
Articles of Incorporation
The Articles of Incorporation identify the unique characteristics of each corporation. This includes...
- who the incorporators are
- name of the corporation
- number (minimum and maximum number) of directors
- whether it is a membership or a charitable corporation
- whether there is more than one class of membership
- objectives of the corporation
- whether the activities of the corporation are restricted
- who the corporation's remaining property goes to if the corporation winds up its operations
Do not designate a corporation as a membership corporation solely because it has members. Remember that a charitable corporation has members too.
In the articles, it is only necessary to state "one class" of members if all members have the same rights and privileges, even if members have different titles, such as honorary members or founding members. However, if members have different privileges, the articles must state the different classes. For example, if certain members cannot vote on particular issues, those members form a different class.
If your organization is considering registration as a charity under the Income Tax Act the articles must restrict the activities of the corporation to what are considered charitable activities by the Canada Revenue Agency. If your organization is considering this it is a good idea to submit a draft of your articles to the CRA before deciding on how to word the purpose of your corporation and restrictions on activities.
It is a good idea to keep the provisions in the articles to a minimum because, although they can be changed, there is a process that must be followed. Amendments to articles must be passed by a special resolution of the members of the corporation. A special resolution must be passed by at least two-thirds of the total votes at a general meeting. A vote to amend an article can only be held at a general meeting with at least 15 days notice to the members of the meeting and of the resolution to change the articles. A change in the articles must also be filed with the Corporate Registry. Provisions that do not need to be in the articles can be stated in bylaws, which are simpler to change (see the section entitled Bylaws).
Notice of Registered Office
A corporation must have a registered office in Saskatchewan. It cannot be a post office box. The registered office is usually the place where the corporate records are kept. This includes things like minutes of meetings, financial records, membership lists and other information. If the registered office is changed the Corporate Registry must be notified and a Form 3 - Notice of Registered Office must be completed.
Notice of Directors
When you apply to incorporate as a non-profit you must also list who the directors of the corporation will be. Together the directors form a board that has the overall responsibility for managing the activities and affairs of the corporation.
A membership corporation can have just one director but a charitable corporation must have a minimum of three directors. Your articles may also provide that the corporation must have a certain number of directors or set out the minimum and maximum number of directors your corporation can have.
Any mentally competent person who is at least 18 years of age and who is not bankrupt can be a director. At least one director must live in Saskatchewan and at least 25% of the directors must be resident Canadians. If a non-profit has less than four directors, at least one director must be a resident Canadian. A director does not have to be a member of the corporation unless required by the corporation's bylaws.
If the corporation is a registered charity, there will be limits as to the degree that directors can be related to or affiliated with each other. You should check CRA guidelines for further details in this regard.
Any change of directors must be reported to the Corporate Registry using Form 6 - Notice of Directors.
Running a Non-Profit Corporation
A non-profit corporation, whether it is a membership corporation or a charitable corporation, has members. The members are like the owners of the corporation. When an organization is first incorporated the directors are named at this time. This first board of directors meets and determines things like how people can become members of the corporation. The board may, for example, set a fee for membership and decide to issue membership cards to those who have purchased a membership. This first board of directors holds office until the first meeting of the members. At this meeting the members elect directors to hold office for not more than three years. In subsequent years the members continue to elect directors. The board of directors runs the corporation. Members oversee the work of the board of directors. Members and the board of directors must comply with The Non-profit Corporations Act, 1995 and their organization's articles and bylaws.
One of the most important roles of the members of a corporation is to elect the board of directors. However, the work of the members is not complete once they have elected a board to run the corporation. The Non-profit Corporations Act, 1995 gives members certain rights including the right to...
- receive notice of meetings
- call a special meeting of the members (requires agreement of 5% of members)
- vote at a meeting of members
- remove directors
- confirm, reject or amend bylaws made by directors
- change Articles of Incorporation
- receive financial statements
- appoint an auditor or in some limited situations choose to not appoint an auditor
- have access to the corporation's records
There may be different classes of members in a non-profit corporation. These classes have different rights and privileges only if the articles or bylaws of the corporation stipulate the differences.
Some members' rights can be changed by the articles or the bylaws. For example, each member has the right to one vote at member meetings, unless the articles state otherwise. The rights given in the Act apply where no changes have been made through the articles or bylaws. Some rights, however, cannot be changed. For example, the right of access to the corporation's records cannot be taken away. The Act states which rights can be altered by the articles of the corporation, which can be altered by the bylaws, and which rights cannot be altered.
Members exercise their rights at meetings. Generally, a majority of voting members must be present or represented by proxy in order to transact the business of the corporation. The minimum number of members required is called a quorum. A corporation can change this requirement through its bylaws. A bylaw can state that a certain number of members less than the majority constitute a quorum.
Generally members are not liable for any liability, act or default of the corporation.
The directors are elected by the members. To serve as a director a person must be at least 18 years old, of sound mind and not bankrupt. The directors, once elected, can choose to appoint officers to fill various positions on the board, such as Chair, Secretary and Treasurer. The board can also choose to appoint people who are not directors as officers to perform certain duties for the corporation. Some powers of the board, such as changing bylaws and approving financial statements, cannot be delegated to officers.
The board of directors provides continuity and has the overall responsibility for managing the activities and affairs of the corporation and making sure that the mission of the corporation is fulfilled. The board's functions often include: budgeting, financing, planning, fundraising, setting policy, hiring and firing personnel, and handling public relations. The board can also pass bylaws (which later have to be confirmed by the members) and fill vacancies on the board that arise between Annual General Meetings of the Corporation.
The board makes decisions at meetings of the directors. Before business can be transacted at a directors' meeting, there must be a quorum. The number of directors needed to make up a quorum is determined in one of three ways. First, the articles or bylaws may state how many directors constitute a quorum. Second, the articles may state how many directors the corporation is to have; in which case, a quorum is the majority of that number of directors. Finally, the articles may state a minimum, or a minimum and maximum, number of directors that the corporation must have. In that case, a quorum is the majority of the minimum number of directors.
Duties of Directors
Directors and the officers they appoint are required to act honestly and in good faith with a view to the best interests of the organization. Directors are also required to exercise the care, diligence and skill that a reasonable prudent person would exercise in comparable circumstances. This does not mean that a director must do everything possible to take care; it means that a director must do what is reasonable in the circumstances.
If a director has special skills, for example the director is an architect, the director must use those skills when making related decisions for the corporation. If it is reasonable to do so, directors can delegate to others and rely on experts such as lawyers or auditors. A director cannot avoid being held to the standard of reasonable care simply by not taking any action. A director who does not give adequate attention to the affairs of the corporation may also be found to have not taken reasonable care.
Conflict of Interest
Directors must not put themselves in a position where their personal interests might conflict with those of the corporation. This would most often happen if a decision of the board could result in you gaining financially. For example, if one of the companies that the board was considering hiring was owned by you, it would be a conflict of interest for you to decide or to help decide who to hire.
Directors must also not put themselves in a position where their duty to another organization or individual and their duty to the corporation are in conflict. This could happen for example, if you served on the board of two non-profits and they were engaged in the negotiation of a contract between the two corporations.
If you have a conflict of interest you need to declare your conflict and not participate in the vote or the discussion concerning the issue. If you have a conflict of interest concerning a contract or a proposed contract you are required by The Non-profit Corporations Act, 1995 to notify the board of the conflict. This must be done in writing and/or recorded in the minutes of the meeting. If you fail to declare your conflict of interest a court can alter or set aside the contract on any terms it considers appropriate.
Liability of Directors
Directors of non-profit corporations, like directors of business corporations, are largely shielded from personal liability. In most instances they have no obligation to pay any debt or liability incurred by a corporation. The corporation itself is a separate legal person and is responsible for its own debts and obligations. This is one of the advantages of incorporating. Directors can become liable for an obligation if the directors themselves agree to be responsible, for example by giving something like a personal guarantee for a loan.
Failure to Exercise Duties
Directors can also become liable for a debt or obligation that arose because they failed to properly exercise any of their duties as directors. For example, if a director owned a construction company that bid on a building contract with the corporation and the director voted in favour of his company being hired, the director could be failing to exercise the duty to avoid being in a position of conflict of interest. A director would not be exercising the duty to act honestly and in good faith if, for example, the director took a secret payment from a landlord in exchange for voting to rent the premises in question. A director could be liable for failing to act in a way that a reasonable prudent person would if, for example, the director allowed a daycare to rent clearly unsafe premises.
A number of laws make directors personally liable for obligations that the corporation fails to perform.
For example, a director of a non-profit corporation may be ordered under The Labour Standards Act to pay the wages of employees. This may occur if the wages were earned by the employees but not paid to them. This liability is for a maximum of six months wages, which accrued during the director's term of office.
A director may also be liable in some circumstances if income tax deductions from employees' paycheques are not forwarded to the Receiver General, and if GST is not paid by the corporation. Directors may be personally liable if the corporation does not comply with certain sections of The Non-profit Corporations Act, 1995 or with occupational health and safety regulations. Directors may also be liable if the corporation causes environmental damage.
If employees or volunteers of a non-profit corporation cause damages while acting within the scope of their duties, the corporation is liable for these damages. For example, if a person is injured as a result of a fall on a badly prepared ice surface in an outdoor arena operated by a non-profit corporation, the corporation will be liable.
The Non-profit Corporations Act, 1995 provides that in general directors are not personally liable for damages if someone sues because they have been harmed by something the director did or did not do. To be protected the director must have been carrying out the duties of a director in good faith when the injury happened. Directors are not protected if they engage in criminal activity, such as fraud, that results in damages. This immunity does not affect the statutory liabilities of directors.
The non-profit corporation itself continues to be liable for damages if someone successfully sues on the basis that they were harmed, for example, by the negligent actions of an employee, volunteer or director. The damages would then be paid out of the funds of the non-profit. The non-profit itself also cannot sue the director for damages the non-profit has to pay because of something the director did or did not do.
Directors may personally arrange for the purchase and maintenance of insurance to protect themselves from liability. The Non-profit Corporations Act, 1995 also allows the corporation to purchase and maintain such insurance for the benefit of the directors. In either case, the proceeds of the policy can only be paid to a director who has acted honestly and in good faith. For example, directors cannot insure themselves against the consequences of stealing from the corporation. Directors' insurance is less common than it once was because of the dramatic increase in the premiums in recent years.
Even though directors will not be personally liable if someone sues the corporation for damages, the directors of non-profit corporations may want to seriously consider a comprehensive general liability policy of insurance for the corporation. An appropriately drawn up policy of this type will reduce the danger of financial disaster if a large judgment is made against the corporation. To assure coverage, all hazards must be reported to the insurer when the policy is drawn up and the insurer must be informed of new risks when they arise. For example, if a daycare centre operating as a non-profit corporation expands to include a playground open to the public, the insurer must be notified.
After an organization is incorporated the directors or the incorporators need to call an organizational meeting. The directors can do a number of things at this first meeting including...
- determining how people can become members of the corporation
- appointing officers
- making bylaws
- making banking arrangements
After this initial meeting, the board of directors continue to meet to deal with the affairs of the corporation. How often the board of directors is required to meet may be set out in the bylaws.
The directors must also call an annual meeting of the members. Unless the Articles of Incorporation provide otherwise, annual membership meetings must be held within 15 months of the last preceding annual meeting. However, membership corporations may choose to hold meetings every second or third year in place of an annual meeting.
The annual meeting is usually held about three months after the fiscal year-end of the non-profit corporation. The annual meeting must be held no later than 4 months after the fiscal year-end. Financial statements and the auditor's report must be sent to the membership 15 days prior to the date of the meeting and are presented at the meeting.
The directors can also call a special meeting of the members at any time. If at least 5% of the voting members agree they can require the directors to call a members' meeting. Members' meetings require at least 15 days notice. The notice must explain the purpose of the special meeting.
The law does not require a non-profit corporation to have bylaws. They are for the convenience and efficiency of the management of the corporation. Bylaws are used to supplement the articles and must not contradict the articles.
Bylaws are effective tools for opting out of some of the requirements of The Non-profit Corporations Act, 1995. Before drafting bylaws, the drafters must carefully review the Act to see which requirements can be changed by properly drafted bylaws. After establishing which requirements can be changed, the corporation can tailor their bylaws to better suit the needs of the corporation.
Bylaws may be made and changed by the directors, but members' approval is required at the next membership meeting.
Audit or Review
Both membership and charitable corporations are required to have their financial statements audited unless the corporation comes within one of the exceptions in The Non-profit Corporations Act, 1995.
A membership corporation can pass a resolution to not have its financial statements audited. If the membership passes such a resolution the corporation must then appoint a qualified person to review the corporation's financial statements unless a resolution is passed to dispense with this requirement. A resolution to not have financial statements audited and a resolution not to appoint a person to conduct a review must be passed by at least 2/3 of the members who vote on the resolution. Members who would not otherwise be entitled to vote can vote on these resolutions.
A charitable corporation must have an audit if its revenue exceeds $250,000 in the previous fiscal year. If the charitable corporation's revenue was between $25,000 and $250,000 it can pass a resolution to have a review instead of an audit. If the charitable corporation's revenue was less than $25,000 it may pass a resolution to not have an audit or a review. A resolution to not have an audit or to not have a review must be passed by 80% of the members who vote on the resolution. Members who would not otherwise be entitled to vote can vote on these resolutions.
If an audit is required, it is conducted by an auditor appointed at the annual meeting. The auditor can be a member of the corporation but must be independent of the corporation and its affiliates. For example, the auditor can be a member but cannot be a director or an officer of the corporation. The auditor does not need to be an accountant. They must present a statement on the finances of the corporation to the membership at the annual meeting. In this statement, the auditor verifies the accuracy of the financial records based on the information given to him or her. If the membership does not elect a new auditor at the annual meeting, the current auditor remains in that position for the next year.
The non-profit corporation must have a registered office in Saskatchewan. The non-profit corporation must retain an adequate set of records at this registered office or at a place that is fit and reasonable and where the records are always accessible to the directors of the corporation for inspection.
An adequate set of records includes...
- bylaws with all the amendments
- minutes of meetings and all resolutions
- register of members entitled to vote
- copies of documents sent to the Corporate Registry including Notice of Directors and Annual Return
- financial records
As long as the records can be read and a copy can be produced the records can be kept in almost any form including electronically. Records must be safeguarded against loss, destruction or falsification.
Access to Records
In a membership corporation, any member is entitled to access the records. In a charitable corporation, any person is entitled to access the records.
On request and without charge members are entitled to a copy of the articles and bylaws. With 10 days notice, members are also entitled to a list of members and addresses that is not more than 10 days old at the date of the request. The membership list is supplied for a fee and an affidavit is required. This list can only be used to influence voting or in connection with other affairs of the corporation.
Every corporation must file an annual return, along with a set fee, with the Corporate Registry. Non-profit corporations must also file financial statements with the Corporate Registry every year, showing the assets, liabilities, revenue and expenditures of the corporation. If an audit or a review is required this must also be filed with the Corporate Registry. The Corporate Registry sends out an annual reminder advising corporations of the due date for annual returns. The annual return can be filed online through the Corporate Registry at www.isc.ca/CobraWeb/CobraLogin.asp. However, the financial statements cannot be submitted online and must be sent in separately.
Changes to be Reported to the Corporate Registry
Any change in the address or location of the registered office of the corporation or any change in directors of the non-profit corporation must be sent to the Corporate Registry on the prescribed forms.
Amendments to the Articles of Incorporation must be reported to the Corporate Registry on the prescribed forms along with the appropriate fees. Amendments are effective after the Corporate Registry issues a certificate of amendment.
A corporation can set its fiscal year-end for any month of the year. An annual meeting must be held within four months after the fiscal year-end to present the financial statements and the auditor's report to the membership. For example, if a corporation's fiscal year-end is December 31, an annual meeting must be held prior to April 30 of the following year.
Dissolving a Non-Profit Corporation
Dissolving a non-profit corporation in Saskatchewan can be accomplished directly by the members, by outside authorities such as the Corporate Registry under The Non-profit Corporations Act, 1995, or by a court acting on a request. Who dissolves the corporation depends on the circumstances of the case.
The reason for dissolving a non-profit corporation may be one of the following...
- the main objective of the corporation has disappeared
- there is a deadlock in the management of affairs
- the conduct of the directors has been unfairly prejudicial to a certain member or class of members
A voluntary dissolution must be passed by special resolution which means that a minimum of two-thirds of the members voting for the dissolution must vote in favour of the decision. The corporation then collects and disposes of all properties in accordance with the Act. A Form 17 - Articles of Dissolution is sent in to the Corporate Registry along with a final financial statement. Note: Assets and liabilities must show zero balances. The Corporate Registry then issues a certificate of dissolution. The corporation ceases to exist on the date of the certificate of dissolution.
In some cases a statement of intent in the Form 19 - Statement of Intent to Dissolve may also be required before a Form 17 - Articles of Dissolution can be completed. This is typically filed when a corporation has a number of unknown creditors. At this point, the corporation ceases to carry on activities, except those necessary for the liquidation. Please contact the Corporate Registry directly for more information.
A certificate of intent of dissolution can be revoked at any time before the final certificate of dissolution is issued. To revoke, the corporation notifies the Corporate Registry through a Form 19 - Revocation of Intent to Dissolve, and they issue a certificate of revocation of intent effective on its date. The corporation can then resume activities.
If a Form 19 - Statement of Intent to Dissolve is filed then the corporation must send notices to all creditors and publish notices for four consecutive weeks in a newspaper in the place where the registered office is located.
The Corporate Registry may dissolve a corporation that has not carried on its activities within three years after the date of incorporating or has not carried on any activities for three years. The Corporate Registry gives 120 days notice to the corporation and to each director and publishes a notice of the decision to dissolve the corporation in the Saskatchewan Gazette. After the period expires and no one has successfully objected, the Corporate Registry issues a certificate of dissolution and the corporation ceases on that date.
The Corporate Registry or any interested person may apply to the court for dissolution. Grounds for dissolution include when the corporation...
- has failed for two consecutive years to comply with the requirements of the Act with respect to the holding of members' meetings
- is carrying on activities restricted by the articles or contrary to the articles
If someone other than the Corporate Registry applies to court, the Corporate Registry is given notice of the application to the court and is entitled to appear and be heard.
The court may order dissolution or make any other order it considers appropriate. If the court orders dissolution, the Corporate Registry issues a certificate of dissolution. If the order is to liquidate and dissolve, the Corporate Registry issues a certificate of intent and publishes a notice in the Gazette. The court may appoint a liquidator who has the powers to carry out the liquidation and dissolution as prescribed by the Act and under the supervision of the court. The liquidator may be a director or an officer of the corporation.
How the surplus is distributed upon dissolution depends upon whether the corporation is a membership corporation or a charitable corporation.
In a membership corporation, the surplus is distributed as stated in the articles. The surplus may be donated to a similar organization or charity, or it may be divided equally among the members. If the surplus is divided among members, it may be subject to taxation in their hands. If the articles do not specify otherwise, the surplus will be distributed to the members.
In a charitable corporation, the articles may name a specific charitable corporation or government to which any surplus is to be distributed. If nothing is specified in the articles, the surplus amount will be distributed with the approval of the court and then only to a corporation carrying on the same or similar activities, a registered charity, or a government. If money was received for a specific purpose, it must be returned to the donor, if possible, or it must be donated to an organization with a similar purpose. The surplus cannot be divided among the members as in a membership corporation.
Investigation of a Non-Profit Corporation
Any member of a non-profit corporation may apply to a court for an investigation of the corporation. The court will order an investigation where it finds grounds to do so.
Grounds for investigation may include...
- the activities of the corporation are carried on with the intent to defraud any person
- the activities are carried on in a manner oppressive or prejudicial to the members
- the corporation was formed or is to be dissolved for fraudulent or unlawful purposes
- the persons concerned with the activities have acted fraudulently or dishonestly
Canada Revenue Agency
Saskatoon Tax Services Office
340 3rd Avenue North
Saskatoon SK S7K 0A8
Regina Tax Services Office
260-1783 Hamilton Street
Regina SK S4P 2B6
Provides information on requirements for filing tax returns for a non‑profit corporation that is not registered as a charity, as well as the forms to register as a charity.
Canada Revenue Agency
Toll free: 1-800-267-2384
Provides information regarding eligibility and qualifications to register as a charity under the Income Tax Act, as well as the necessary forms.
Saskatchewan Co-operative Association
120-128 4th Avenue South
Saskatoon SK S7K 1M8
Phone: (306) 244-3702
Provides information on Co-operatives.
Information Services Corporation
Information Services Corporation (ISC)
1301 1st Avenue
Regina SK S4R 8H2
Phone: (306) 787-2962
Provides information on incorporating provincially. The Provincial Incorporation Kit may be obtained from this website and submitted via fax, e-mail, mail or in person. The Corporate Registry is responsible for registering and regulating non-profit corporations and provides online information about creating and running a non‑profit corporation. The website also provides forms for ongoing filings such as annual returns, notices of change and amendments.
Business Registrations Saskatchewan
Information Services Corporation (ISC)
Business Registrations Saskatchewan is a joint online service offered by the Corporate Registry, Saskatchewan Ministry of Finance and Saskatchewan Workers' Compensation Board (WCB). The site provides access to all the basic information related to starting an organization in Saskatchewan in one centralized online location and allows you the ability to conveniently complete the steps to incorporate your non-profit corporation.
9th Floor, Jean Edmonds Towers South
365 Laurier Avenue West
Ottawa ON K1A 0C8
Provides information on incorporating federally.
B19-3085 Albert Street
Regina SK S4S 0B1
Phone: (306) 787-6894
Toll free: 1-800-226-7302
The Non-profit Corporations Act, 1995 may be ordered (for a fee) from the Queen's Printer, or may be downloaded free of charge from their website.ISBN/ISSN number: 978-1-926545-46-2