Non-Profit Organization

A non-profit organization (NPO) is an entity established and administered exclusively for non-profit purposes (This link will open a new window)

The income of an NPO must not be distributed to its proprietors, shareholders or members, or otherwise made available to them for their personal benefit (unless these persons are clubs, societies or associations whose primary purpose is the promotion of amateur athletics in Canada).

The following persons or entities are not considered NPOs:

  • individuals
  • successions 
  • charities

Example

A recreational club is set up in your city. The club derives most of it income from membership dues and spends all or almost all of its income on recreational activities for its members. It can therefore be considered an NPO.

To maintain its NPO status and related advantages, an organization must meet certain obligations.  

For more information on the taxation of NPOs, click Taxation of Non-Profit Organizations.

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