Completing Form 4031, Articles of Continuance (transition)

Registered charities and registered Canadian amateur athletics associations (RCAAAs) incorporated under Part II of the Canada Corporations Act have until July 31, 2017, to receive a certificate of continuance under the Canada Not-for-profit Corporations Act (NFP Act), by filing Form 4031 with Corporations Canada. The information on this page will help you complete the form.

• Statement of purpose
• Number of directors
• Non-profit clause (non-distribution to members)
• Remuneration of directors

Statement of purpose

To maintain your registered status with the Canada Revenue Agency (CRA), item 6 “Statement of the purpose of the corporation” of Form 4031 must have purposes that are only charitable.

No change to purposes

If you are keeping the same purposes as those stated in Article III of your Letters Patent issued under the Canada Corporations Act (CCA), you should use the same words when completing Item 6 of Form 4031.

Amending your purposes

If you plan to change your purposes from those that are stated in Article III of your Letters Patent issued under the CCA, we recommend that you contact us to make sure that your new purposes are charitable before sending Form 4031 to Corporations Canada.

If you plan to change your purposes or add new ones, we strongly recommend using the CRA model purposes. This is a list of purposes that are acceptable to the CRA.

For each changed or new purpose, we need a detailed statement of activities that describes how you will achieve the purpose. This allows us to decide if you continue to meet the legal requirements for registered status. For information on how to complete a statement of activities, go to Describing your activities.

There are no fees to transition to the NFP Act. If you choose to change your purposes after the transition is complete, you will have to request a certificate of amendment from Corporations Canada. The fee for a change is $200.

Number of directors

The NFP Act introduces the definition of a soliciting corporation.

The NFP Act requires a soliciting corporation to have a minimum of three directors (two of whom are not officers or employees of the corporation or its affiliates).

Generally, a corporation will be considered a soliciting corporation under the NFP Act if, in a single financial year, it has received more than $10,000 in public money (this includes solicited public donations, solicited or unsolicited government grants or similar financial assistance, and funds from another soliciting corporation).

If you are incorporated or continued under the NFP Act and anticipate receiving public donations or government grants, we recommend that you have at least three directors at all times (two of whom are not officers or employees of the corporation or its affiliates). This way, you can avoid having to continually assess your status as a soliciting or non-soliciting corporation and adjust your board structure accordingly.

Therefore, your articles of continuance should have a minimum of three directors.

A registered charity may have its own reasons for wanting to be a soliciting corporation or a non-soliciting corporation under the NFP Act.

Non-profit clause (non-distribution to members)

The NFP Act contains a clause limiting the distribution of property, increases to the value of property, and profits to members of the corporation. As well, to maintain its registered status under the Income Tax Act, no part of the income of an incorporated charity can become payable to or available for the personal benefit of any member.

We recommend that the following clause be included in Item 10, “Additional provisions, if any” of Form 4031:

The corporation shall be carried on without the purpose of gain for its members, and any profits or other additions to the corporation shall be used to support its purposes.

Remuneration of directors

The provisions of the NFP Act allow for the remuneration of directors; however, the Income Tax Act and charity law generally limit the remuneration of a charity’s director or other governing official.

The Charities Directorate accepts that a charity may remunerate its directors or other governing officials for services they actually perform on behalf of the charity, as long as the payments are a reasonable compensation for the service provided. The Directorate also accepts that a charity may reimburse the out-of-pocket expenses its directors or other governing officials paid while carrying out their duties.

We recommend that the following clause be inserted in Item 10, “Additional provisions, if any” of Form 4031:

Directors shall serve without remuneration, and no director shall directly or indirectly receive any profit from his or her position as such, provided that a director may be reimbursed for reasonable expenses paid in performing his or her duties. A director shall not be forbidden from receiving compensation for services provided to the corporation in another capacity.

Related links

• Charitable purposes and activities

• Transitioning to the new Not-for-profit Corporations Act

Date modified:

2017-03-29