Setting Up a Non-Profit or Charity in Canada 2025 — How to Incorporate, Register, and Maintain Compliance

Creating a non-profit or charity is one of the most impactful ways to give back to your community—but it must be structured properly to comply with CRA and Revenu Québec regulations. In 2025, with increased scrutiny on charitable activities and donor receipts, organizations must demonstrate transparency, accountability, and fiscal discipline. Mackisen CPA Auditors Montreal helps new and existing non-profits incorporate, register, and manage finances with full legal compliance and CRA approval.

Legal and Regulatory Framework

Income Tax Act (Canada) Section 149(1)(f): Grants tax-exempt status to registered charities and non-profit organizations.
Charities Registration (Security Information) Act: Establishes conditions for charitable registration with the CRA Charities Directorate.
Quebec Companies Act Part III and Ontario Not-for-Profit Corporations Act: Govern incorporation of non-profit entities provincially.
CRA Guidance CG-002: Defines charitable purposes under four recognized categories—relief of poverty, advancement of education, advancement of religion, and community benefit.
Taxation Act (Quebec) Section 1000: Requires all Quebec-registered charities to file CO-17.S and TP-985.22 returns annually.

Key Court Decisions

Vancouver Society of Immigrant and Visible Minority Women v. M.N.R. (1999): Defined the boundaries of charitable education versus advocacy.
Bayit Lepletot v. The Queen (2017): Clarified that incidental business activities are acceptable if profits fund charitable programs.
National Anti-Poverty Organization v. Canada (2008): Upheld CRA’s power to revoke status for political or non-charitable activities.

Why CRA and Revenu Québec Audit Non-Profits

Both agencies audit to ensure funds are used for charitable purposes and not private benefit. Common audit triggers include excessive administrative expenses, missing T3010 filings, or political activity. CRA’s 2025 modernization initiative now cross-verifies charitable donations against tax receipts. Mackisen ensures all filings, donations, and reports comply with federal and Quebec standards.

Mackisen’s Strategy

1. Incorporation Planning — Draft bylaws, objects, and incorporation documents compliant with CRA requirements.

2. Charity Registration — File T2050 (federal) and TP-985.22 (provincial) with CRA and Revenu Québec.

3. Donation Receipt Setup — Implement CRA-compliant donation systems and recordkeeping.

4. Financial Governance — Establish budgets, internal controls, and board reporting standards.

5. Audit and Review Engagements — Perform annual financial reviews to maintain CRA status.

Real Client Experience

A Montreal community organization lost charitable status due to late filings. Mackisen restructured governance, submitted reinstatement applications, and regained status within six months. A Quebec education non-profit secured CRA registration in record time using Mackisen’s pre-approved charitable object templates.

Common Questions

Do non-profits pay tax? Generally no, if income is used solely for charitable purposes.
Can non-profits earn business income? Yes, if revenue supports charitable objectives.
Is registration mandatory? Yes, to issue donation receipts or receive grants.

Why Mackisen

Mackisen CPA Auditors Montreal specialize in non-profit and charitable incorporation, audit, and governance. Our CPAs ensure legal compliance, transparent reporting, and long-term funding eligibility. Call Mackisen CPA Auditors Montreal today for your 2025 Non-Profit Consultation. The first meeting is free and sets your organization up for success.