• What is a non-profit company?
  
  
• Private vs. Public Non-Profit Companies
  
  
• Canada Revenue Agency Requirements for Charities
  
  
• How is a non-profit company formed?
  
  
• Non-Profit Company Names
  
  
• Non-Profit Company Structure
  
  
• Non-Profit Company Operating Rules
  
  
• Required Additional Information
  
  
• Where do I go to incorporate my non-profit company?

What is a non-profit company?

Non-profit companies are organizations regulated by the Companies Act. They are formed to promote art, science, religion, charity or other similar endeavors, or they may be formed solely for the purpose of promoting recreation for their members.

Private vs. Public Non-Profit Companies

There are two types of non-profit companies – private and public.

Private non-profit companies have restrictions on the number of members or shareholders, shares or membership transfers and invitations to the public to subscribe for any shares or debentures of the company. At least two people are needed to form these companies.

Public non-profit companies do not have any of the restrictions of the private companies. At least three people are needed to form these companies.

The private company provisions are defined under definitions in the Companies Act.

Canada Revenue Agency Requirements for Charities

If your organization intends to register as a charity, your objectives may not meet the requirements of the Canada Revenue Agency (CRA). Prior to submitting information to CRA, you should determine what they consider to be charitable purposes and ensure your objectives meet their criteria.

General information about charities (external site) is also available along with CRA's policy for dissolution of a charity (external site).

If your non-profit company, incorporated pursuant to the Companies Act, will be intending to contact the Alberta Gaming and Liquor Commission, please note that the AGLC Charitable Gaming Policy, Section 2.1, Standard 1. h) states:

Applicants who are incorporated under any statute must have bylaws that upon dissolution of the applicant group, require any assets remaining after paying debts and liabilities to be:

• Disbursed to eligible charitable or religious groups or purposes
  
  
• Transferred in trust to a municipality until such time as the assets can be transferred from the municipality to a charitable or religious group or purpose approved by the Board
  

How is a non-profit company formed?

To form a non-profit company, you must provide a non-profit company name, describe the 'type' of non-profit company, the purposes for which it was incorporated, provide the internal rules for the company, and give an address for the company.

A list of directors is also required, depending on the type of non-profit company being incorporated. The following information is provided to assist you in this process.

Non-Profit Company Names

The first step in incorporating a non-profit company is to choose a name. There are different types of names. You can have a "named" name, such as "Alberta Resorts Limited," or a numbered name, such as "123456 Alberta Ltd."

A non-profit name is usually made up of three parts, or elements.

The required 'distinctive element' is a unique word or location that makes the non-profit company’s name different from others. In the example "Alberta Resorts Limited," the distinctive element is "Alberta".

The required 'descriptive element' describes what the non-profit company is or does. The descriptive element in our example is "Resorts".

The 'legal element' is optional in a "named" name. The legal element, if present, must be "Ltd." or "Limited".

A NUANS Report is required to ensure that the proposed name is available.

A "numbered" name is also comprised of three mandatory parts - the numbered part, which is assigned by Corporate Registry, the word "Alberta", and either "Ltd." or "Limited". A NUANS report will not be necessary for this type of name.

To incorporate with a "numbered" name, you must specifically request a numbered name from the Corporate Registry office which will assign the number on incorporation..

If you choose to have a name that is similar to another corporation or non-profit group’s name, you will need to obtain written permission from that group to use the name.

Non-Profit Company Structure

The second step in forming a non-profit company is to set out your Memorandum of Association. The Memorandum of Association document is drawn up specifically for each non-profit company by, or on behalf of the individuals forming the company. This document includes the objects of the company and the type of non-profit company; limited by guarantee, or limited by share.

The Memorandum of Association must have a clause stating that no dividends or income will be paid to members and that all profits or any income, if any, must be used to promote the company objects. Objects cannot indicate the carrying on of a profit making business.

In a company limited by guarantee, each member agrees to help pay the company’s debts and liabilities before it winds up or stops carrying on its activities. The maximum amount of contribution each member must make must be set out in the Memorandum of Association.

In a company limited by shares, the Memorandum of Association must set out details describing the shares. These details will include that a fixed number of shares must be authorized. An unlimited number is not acceptable.

The memorandum of association will state that the share structure is divided into shares without a nominal or par value, or divided into shares comprised partly of one of the foregoing classes and partly of the other.

Non-Profit Company Operating Rules

The third step in forming a non-profit company is to set out your Articles of Association which are the operating rules for the company. The Articles of Association document is drawn up specifically for each non-profit company by, or on behalf of the individuals forming the company.

Companies "Limited by Shares" may adopt "Table A" of  the Companies Act instead of preparing and filing Articles of Association. If "Table A" is adopted it must be signed by the same people who signed the Memorandum of Association.

Companies "Limited by Guarantee" may adopt " Table A" of the Companies Act for their Articles. In this case the portion of "Table A" that refers to shares, liens, transfers and alteration of capital, etc. should be removed.

Required Additional Information

When you form your non-profit company, you must tell us where the company is located (registered office) and where you want your mail to go (mailing address) if this address is different. Directors are not always appointed at the time of incorporation.

If the subscribers of the Memorandum of Association and Articles of Association are stated to be the first directors, then director information will be entered on records by Corporate Registry at the time of incorporation.

Where do I go to incorporate my non-profit company?

Submit the completed documents in duplicate, together with the NUANS Report and the incorporation fee, to the Corporate Registry office. Corporate Registry personnel examine all non-profit company incorporation submissions and, if the requirements are met, will issue a Certificate of Incorporation under the Companies Act.