Corporations Canada recently launched a new assistance tool to help corporations under the Canada Not-for-profit Corporations Act (“CNCA”) determine if they are considered soliciting or non-soliciting. A corporation is considered soliciting when it has received more than $10,000 in income from public sources in a single financial year. Public sources include gifts or donations from non-members, grants from government and funds from another corporation that also received income from public sources.
Each year, CNCA corporations must file an Annual Return (Form 4022) and, as part of the filing, must list whether they are soliciting or non-soliciting. If a corporation is soliciting, there are additional requirements that must be met under the CNCA such as filing financial statements with Corporations Canada. For more information on these requirements, you can visit Corporations Canada’s website at: https://ised-isde.canada.ca/site/corporations-canada/en/not-profit-corporations/requirements-soliciting-corporations-under-canada-not-profit-corporations-act-nfp-act
The tool is a helpful reminder of the categorization of soliciting vs. non-soliciting as there are still many CNCA corporations mistakenly mischaracterizing themselves as non-soliciting and then not complying with the soliciting corporation requirements.
Unfortunately, there are some complexities in determining in some cases whether a corporation is soliciting or non-soliciting, and this tool will not always answer the question. There are others who realize they are soliciting corporations but don’t file their financial statements, and Corporations Canada has reminded a Federal non-profit corporation under the CNCA, for which failure to file financial statements can result in consequences, including but not limited to dissolution. Also remember that if you are a registered charity you need and a soliciting corporation you need to file your financial statements with both Corporations Canada and the Charities Directorate of CRA.