Organizations must adhere to certain legal requirements listed under the Income Tax Act in order to be considered a registered charity; if they do not, organizations risk being de-registered, which means they are no longer eligible for certain tax benefits.

Legally, a charity must devote substantially all its resources to charitable activities which carried on by itself. In addition, more than 50% of its directors, trustees, officers or similar officials must deal with each other at arm’s length, which means that they must act independently of each other. As well, no more than 50% of its funds can come from one person or organization, unless that one person/organization is the federal, provincial or municipal government, another registered charity or another non-profit organization.

Our charitable registration no. is 12977 8882 RR 0001.

Non-Profit

In addition to being a registered charity, CMHA/Peel is an incorporated non-profit organization. It’s incorporated so it can exist as a separate legal entity, with its own property and bank account. Incorporation ensures the organization’s continued existence and personal protection in issues of legal liability.

Non-profit organizations do not exist for commercial purposes. Its members must not benefit personally as investors. Where commercial enterprises are in the business of making money by selling good or services, non-profit organizations do not profit from the goods or services they provide. Under the Income Tax Act, no part of a non-profit organization’s income is payable to or otherwise available for the personal benefit of any proprietor, member or shareholder. All levels of government can pass laws and bylaws regarding non-profit activity. Under the Income Tax Act, the federal government regulates tax exemptions and under the Excise Act, it regulates goods and services tax exemptions. At the provincial level there are special rules for non-profits for taxation and at the municipal level, non-profit organizations’ activities are licensed.

By law, incorporated non-profit organizations must have a Board of Directors. The Board of Directors is in charge of and directly accountable for the overall directions and policies of the organization. The Articles of Incorporation outline what power the Board of Directors has while the organization’s Bylaws specify how the Board is to act.

By-laws
By-laws are legally required when an organization is incorporated. They outline the following:

• rules under which the branch is governed
• where the head office is
• what the seal and symbols of the branch are
• restrictions concerning membership, voting, directors and meetings
• the Branch’s relationship to other divisions; auditing, etc.

CMHA/Peel Branch has recently revised By-law no. 2 in order to permit more than one vice chair on the Board of Directors. Click here to read the By-law no. 2.

By-law no. 1 was revised in 2005. Click here to read the By-law no. 1.

The following summary explains the reasons for the revisions to By-law no. 1

By-Law No. 1
What?
Ontario Corporations Act
Letters Patent

CMHA/Peel was founded November 22,1983
Supplementary Letters Patent filed August 15, 2003

By-Law No. 1

Last updated September 1995

Why?

High profile governance problems in news today
Many regulatory changes since 1995
Re-write of governance policies in 2003-2004 resulted in conflicts with the existing By-Law
CMHA/Peel is growing very fast now

How?

Board selected a working group
Keith Salmon, Ron Dabor, and Gayle Olsson
Used CMHA/Ontario By-Law as template
Many discussions with working group and the Board
Many drafts, but the final reviewed by a lawyer familiar with the Corporations Act
Legal recommendations were incorporated

And then?

A majority voted to adopt the by-law at the June, 2005 Annual General Meeting and the By-Law was forwarded to the Public Trustees Office to replace the previous By-Law.

All governance documents are available to members of the organization at the CMHA/Peel offices, 250 Clarence Street, Brampton.