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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
5-930585
XXXXXXXXXX
Franklyn S. Gillman
Attention: XXXXXXXXXX
February 26, 1993
Dear Sirs:
Re: Approved Research Institute
This is in reply to your letter dated February 24, 1993 wherein you requested that we inform you of the criteria our Minister uses in granting an organization the status of an approved research institute pursuant to paragraph 37(1)(a) of the Income Tax Act (the "Act").
Our Comments In order for any organization to become an "approved association", it must meet the criteria of a non-profit organization and be able to demonstrate that it is able to carry out scientific research and experimental development on an ongoing basis. More specifically, the requirements are as follows:
- 1. It must have the facilities and personnel capable of carrying out scientific research and experimental development as defined in the Act.
- 2. It must carry on only activities that are unquestionably scientific research and experimental development.
- 3. It must satisfy the requirements for non-profit status, such as no personal benefit to members, no control of other associations, satisfactory provisions for distribution of assets upon dissolution, etc.
- 4. The general public must be a beneficiary of the results of successful research.
- 5. The funding of the association must be sufficient to ensure ongoing scientific research and experimental development.
If you wish to proceed with a request for an approved association we would require the following information:
- (a) Your comments on how the association will satisfy with the requirements set out above.
- (b) Copies of the organization's charter, code of ethics and by-laws which should indicate that it will satisfy all requirements in clause 37(1)(a)(ii)(A) of the Act and its post-amble.
- (c) A description of the association's arrangements for obtaining funds.
- (d) A description of the association's arrangements for disbursing funds.
- (e) Financial statements for prior years, if any, and budgets for the current or future years.
- (f) Details of the research activities to be carried out by the association in the future and evidence that it has the staff and facilities to carry out such activities.
In particular details of budgets, disbursements of funds, staffing arrangements and the scientific research and experimental development projects under way or to be carried out in the future would be helpful.
We trust these comments will be of assistance.
Yours truly,
for Director
Manufacturing Industries, Partnerships
and Trusts Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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