Incorporation Laws And Forms
Not under scrutiny of incorporation agreement. The gifts were made in Alberta, with the head office in Alberta and the directors in Alberta...so that they would not come under the scrutiny here of the PGT.
Maxwell Gottlieb, a partner with Cassels Brock & Blackwell in Toronto told that this is no longer a major consideration, since changes to tax laws in the February 2007 budget have precluded activities of this type.
"Depending on your circumstances, you may want to have a provincial organization established in a jurisdiction where the scrutiny is less than it is here. I'm not suggesting that the activities are unethical or improper, but it's not necessary to have somebody look over your shoulder if you've gotten proper advice to confirm that in fact what you're doing is in accordance with rules and regulations and policies," Mr. Gottlieb said.
"So you will find that you may go jurisdiction shopping for an appropriate jurisdiction in which to undertake a specific activity." It is not uncommon for a charity to incorporate one entity in Ontario for Ontario-based activities, and a separate entity elsewhere for activities outside of the jurisdiction. Both the federal and the Ontario incorporation Acts are relatively archaic compared to modern corporate statutes, Mr. Gottlieb noted. Efficient running
"Many of the things that you might expect to see in a corporate statute to ensure the efficient running of the organization are absent," he said. In Ontario, for example, the board of a charitable corporation must have a fixed number of directors, telephone meetings are not allowed, and quorum requirements are higher than for federal corporations. The federal Act seems to be more aware of the deficiencies, however. Through policy statements dealing with the operation of a non-share capital corporation, it allows more flexibility-such as telephone meetings or flexible boards-to ensure greater efficiencies in operation. These policy statements represent only what Industry Canada will allow to occur, however; they do not specifically authorize or prevent certain procedures not authorized or prevented by statute. Mr. Gottlieb said his personal preference is to incorporate federally rather than in Ontario, although in certain circumstances he will use an Ontario corporation for activities within the province.
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