How to Register a Charity in St. John’s: Key Considerations for Newfoundland and Labrador

Starting a charity can be an exciting and rewarding experience, especially if you are looking to make a positive impact in your community. However, it’s crucial to understand the process of registering a charity in Canada, especially when it comes to local requirements in St. John’s, Newfoundland and Labrador. Whether you are setting up a charity for social services, environmental protection, or education, this guide will walk you through the key considerations and steps for registering a charity in Newfoundland and Labrador.

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1. Understanding the Difference Between a Charity and a Nonprofit Organization

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Before diving into the registration process, it's important to understand the distinction between a charity and a nonprofit organization. While both are similar in that they do not distribute profits to owners or shareholders, there are significant differences.

• Charity: A charity is an organization that is established for charitable purposes, such as relieving poverty, advancing education, or supporting the arts. Charities can issue tax receipts for donations, and are eligible for tax-exempt status under the Canada Revenue Agency (CRA).
• Nonprofit Organization: A nonprofit does not have to focus on charitable purposes. It can be any organization that operates for the benefit of its members, but it cannot distribute profits. Nonprofits cannot issue tax receipts for donations.

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If your organization’s goal is to raise funds and offer tax receipts to your donors, then you will need to register as a charity with the CRA.

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2. Federal vs. Provincial Registration: Which Is Better?

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When registering your charity in Newfoundland and Labrador, you have two options for incorporation: federal and provincial. While you may be tempted to choose provincial incorporation for convenience, federal incorporation is typically the preferred option for charities operating across multiple provinces.

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Federal Incorporation:

Federal incorporation is recommended for charities that plan to operate beyond the borders of Newfoundland and Labrador. This allows your charity to operate across all of Canada without needing additional registration in each province. To incorporate your charity federally, you will need to follow the Canada Not-for-profit Corporations Act (NFP Act). Federal registration provides several advantages:

• National Scope: Your charity can operate across the entire country.
• Consistency: You only need to deal with federal regulations rather than different provincial requirements.
• Recognition: Federal incorporation is generally recognized and respected across Canada.

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Provincial Incorporation:

If your charity plans to operate only within Newfoundland and Labrador, you may choose to incorporate under the Newfoundland and Labrador Corporations Act. Provincial incorporation is easier and may be faster, but it limits the charity’s operations to just the province unless it registers extra-provincially. This means your charity won’t be able to operate in other provinces without additional registration.

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3. Registering Your Charity with the Canada Revenue Agency (CRA)

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Once your charity is incorporated, the next step is to apply for charitable status with the Canada Revenue Agency (CRA). This is a crucial step for obtaining tax-exempt status and being able to issue official donation receipts for tax purposes.

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To register, you must:

• Submit a Detailed Application: The application must include your organization’s governing documents, including your bylaws, mission statement, and a list of your directors. You’ll also need to provide a detailed description of your charitable activities and how you plan to achieve your goals.
• Charitable Purposes: The CRA will review whether your charity’s purposes fall within the recognized charitable categories, such as the advancement of education, relief of poverty, or the promotion of health.
• Comply with Reporting Requirements: Once registered, you’ll need to file annual returns with the CRA and maintain proper accounting records.

This process can take several months, so it’s important to be patient and ensure that all the required information is submitted.

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4. Extra-Provincial Registration

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If you incorporate your charity federally or provincially, you may still need to register extra-provincially if you plan to operate in other provinces. Extra-provincial registration allows your organization to conduct business outside of Newfoundland and Labrador.

If your charity is incorporated under the Newfoundland and Labrador Corporations Act and wants to operate outside of the province, it will need to register in each province where it plans to conduct activities. For example, if you want to expand your charity’s work to Ontario or British Columbia, you will need to file for extra-provincial registration in those provinces.

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5. What Are the Costs of Registering a Charity?

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While the costs of registration vary depending on the type of charity you are incorporating and whether you’re doing so federally or provincially, here are some of the typical fees you can expect:

• Federal Incorporation Fees: For incorporating federally, the fee is around $200. If you need to expedite the process, there is an additional fee.
• Provincial Incorporation Fees: Incorporating provincially in Newfoundland and Labrador is generally less expensive, with a fee of around $150.
• CRA Registration: There is no fee to apply for charitable status with the CRA, but there are costs involved in preparing the application, especially if you hire a charity lawyer or accountant to assist.

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6. Maintaining Your Charity’s Status

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Once your charity is registered, you must maintain its charitable status by following all legal requirements. This includes:

• Annual Filings: Submit annual returns to the CRA, including a detailed financial statement, to ensure your charity remains in good standing.
• Proper Documentation: Keep track of all donations, expenditures, and programs. The CRA may audit your charity, so it’s essential to have organized records.
• Comply with Fundraising Regulations: Ensure you follow the rules for fundraising, including how donations are used and reported.

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7. Getting Legal Help

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The process of registering a charity can be complicated, and it’s always a good idea to consult with an experienced charity lawyer. A lawyer can help you ensure your governing documents are in order, advise on the best structure for your organization, and assist in the registration process with the CRA. They can also help you navigate complex provincial and federal regulations.

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Conclusion

Registering a charity in St. John’s, Newfoundland and Labrador, involves several steps, including choosing between federal and provincial incorporation, submitting a detailed application to the CRA, and meeting ongoing compliance requirements. By understanding these key considerations and taking the time to complete each step properly, you can ensure your charity operates smoothly and successfully in Newfoundland and Labrador or across Canada.

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If you need assistance, consider reaching out to a Newfoundland and Labrador Charity Lawyer or a Canadian Charity Lawyer who can guide you through the process and help set your charity up for success.

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