Non-Profit Organization

A non-profit organization (NPO) is an entity established and administered exclusively for non-profit purposes.

No part of its income must be payable to any proprietor, member or shareholder, or otherwise made available to them for their personal benefit, unless the proprietor, member or shareholder is a club, a society or an association whose primary purpose is the promotion of amateur athletics in Canada.

NPOs are active in various fields, including the cultural, social, philanthropic, national, patriotic, religious, charitable, scientific, artistic, professional, athletic, sporting and educational fields.

The following persons or entities cannot be considered NPOs:

  • individuals
  • successions 
  • charities

A recreational club is set up in your city. The club derives most of its 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

Exemption from income tax

Non-profit organizations (NPOs) are generally exempt from income tax provided they are established and administered exclusively for non-profit purposes. For more information, see Exemption from Income Tax.


Even though NPOs are exempt from income tax, they must still meet certain obligations.

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