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Nonprofit and charitable organizations play a crucial role in Markham, Canada, offering various services and programs that benefit the community. These organizations are formed not to make profits for their members or directors, but to pursue a public benefit, social cause, or charitable purpose. The law governing these organizations is complex and involves federal and provincial regulations, tax rules, and compliance requirements. As part of the Greater Toronto Area, Markham's nonprofit sector operates within Ontario provincial laws, as well as applicable federal statutes.
Legal assistance is essential for anyone involved in starting, running, or managing a nonprofit or charitable organization in Markham. Common situations where legal help is valuable include:
A lawyer experienced in nonprofit and charitable law can guide organizations in making informed decisions, reducing legal risks, and focusing on fulfilling their mission effectively.
Nonprofit and charitable organizations in Markham are subject to a variety of laws and regulations, including:
Depending on their activities, organizations may also be subject to additional municipal bylaws in Markham, including those relating to zoning, signage, and special events.
A nonprofit organization is formed for purposes other than generating profit, such as social, cultural, or community-based activities. A charity is a specific type of nonprofit that has obtained charitable status from the CRA, which allows it to issue tax receipts for donations and access additional benefits. All charities are nonprofits, but not all nonprofits are charities.
While it is possible to operate as an unincorporated association, incorporating your organization under Ontario or federal law provides limited liability protection, a legal identity, and better access to funding.
You must apply to the Canada Revenue Agency and meet specific requirements under the Income Tax Act. This process involves detailed application forms, providing your governing documents, and describing your organization's activities and purpose.
Nonprofits can earn revenue (such as through services or products), but profits must be reinvested in the organization's activities. Profits cannot be distributed to members, directors, or officers.
Nonprofits must have a board of directors, hold regular meetings, maintain accurate records, and follow bylaws and constitutions that comply with the ONCA or federal act.
Only organizations that are registered charities with the CRA can issue official donation receipts. These receipts can provide tax benefits to donors.
Annual corporate filings with the appropriate government office and, for charities, annual information returns (T3010) to the CRA are required. Proper financial record-keeping is also essential.
Charities are restricted in their political activities and must ensure that such activities are non-partisan and connected to their charitable purpose. Nonprofits have more flexibility but should avoid jeopardizing tax-exempt status.
Incorporation, maintaining good governance, adhering to legal obligations, and acquiring directors’ and officers’ liability insurance are key ways to manage and limit liability.
It’s important to respond promptly, provide clear records and documentation, and, if needed, seek advice from a lawyer experienced in nonprofit and charity law to protect your organization's interests.
If you need more information or guidance, you can consult the following resources:
If you believe you need legal assistance regarding a nonprofit or charitable organization in Markham, consider the following steps:
Navigating nonprofit and charity law can be complex, but with the right information and legal support, your organization can succeed and make a lasting positive impact in Markham.
