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Posted on August 8, 2017 at 2:43 PM by Josh Yaworski
Should your group incorporate?
Non-profit organizations, whether big or small, are not required by law to incorporate. Many non-profits operate without going through this legal process. The application process can be time consuming, but if your group hopes to apply for grants, then incorporation is often a stipulation.
Most non-profit organizations in Alberta incorporate under the Societies Act. Incorporation under this statute is the simplest and least costly way to become incorporated.
A non-profit corporation is a legal entity created under federal or provincial law. Why would a group choose to do this? Aside from seeking grants, incorporation offers the officers, directors, and individual members limited liability for the actions of the corporation. A non-profit corporation may own property, enter into contracts and agreements, and is able to sue and be sued.
Other benefits to incorporating an organization are continuous existence when there is board and membership turnover. When a group holds an incorporation number, there tends to be increased credibility, especially when fundraising or recruiting volunteers.
Incorporation stabilizes an organization by making bylaws mandatory. This way, certain operating rules are documented and cannot be changed too easily.
There are two sides to every coin. Perceived disadvantages may be that there are record keeping requirements, annual returns, fees, accounting obligations, and if you hire staff, then employment regulations to comply with.
Given all the facts, members can discern whether it would be advantageous to incorporate. The choice to incorporate should be an informed decision. Legal advice is optional, but it is advisable. A committee willing to see the application process through will result in the organization achieving its goal of incorporation. For more information about how to proceed, visit the Service Alberta website.