Advantages and obligations of becoming a registered charity

Before applying for registration with the Canada Revenue Agency, you should be aware of the advantages and obligations. 

Advantages 

Advantages

  • You can issue official donation receipts for gifts that you receive from individuals and corporations.
  • You are exempt from paying income tax.
  • You are eligible to receive gifts from registered charities.
  • You gain increased credibility in the community.
  • Many goods and services you provide are exempt from goods and services tax/harmonized sales tax (GST/HST).
Obligations 

Obligations

Your main obligations are to: 

  • devote your resources (funds, personnel, and property) to your charitable purposes and activities
  • maintain direction and control of the use of all your resources (funds, personnel, and property)
  • file your annual Form T3010, Registered Charity Information Return, within six months of your fiscal year-end
  • meet your annual spending requirement (disbursement quota)
  • keep reliable and complete books and records
  • issue complete and accurate official donation receipts
  • maintain your status as a Canadian legal entity 

Also, you should inform the Charities Directorate of any changes to your mode of operation or legal structure.

If you do not meet your obligations, you may be subject to a penalty and may have your registered status revoked.

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