3 December 1990 Internal T.I. 903087 F - Non-profit Organization

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

19(1)

December 3, 1990

Dear Sirs:

Re:  Non-Profit Organization

This is in reply to your letter of November 5, 1990 and further to your earlier letter of June 25, 1990, requesting non-profit status for the 24(1). Included with your latest letter was a copy of 24(1) joining pamphlet and a photocopy of the by-laws.

Our comments

An association that wishes to be a non-profit organization that is not organized exclusively for social welfare, civic improvement, pleasure, or recreation must then be organized exclusively for any other purpose except profit. Where profit is an objective the organization cannot meet the organized exclusively for non-profit purposes test. No only must the organization be organized as indicated above but it must in fact be operated exclusively for non-profit purposes, and additionally, no part of its income may be paid, payable or otherwise made available for the personal benefit of any proprietor, member or shareholder.

24(1)

24(1) However, with changes to your by-laws and adherence to the factors in Interpretation Bulletin IT-496 that are considered when determining whether a club, society or association is, in a particular taxation year, exempt from income tax pursuant to paragraph 149(1)(l) of the Act, 24(1) could very well, in the future, meet the requirements of a non-profit organization. In this respect you may wish to consult with your legal advisor. A copy of IT-496 is enclosed for your purposes.

Finally, we note that you were correct in your presumption that all corporations are required to file annual T2 corporation income tax returns. This requirement is set out in subsection 150(1) of the Act, the sole exception being corporations which are registered charities.

We trust our comments will prove helpful.

Yours truly,

for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch