Federal vs. Provincial Incorporation for Co-ops

Excerpt:

Introduction

Incorporating your organization as a co-operative provides some formality and protection

to the organization. Incorporation is a process that grants your organization legal rights and recognition under the law – the same rights and privileges that are granted to a person. This gives the co-operative the ability to purchase assets, take on debt and raise capital for projects and operations. It also means that the co-op is now an entity that is subject to any restrictions or rules that are outlined in the legislation they incorporated under.

There is special legislation, both in Ontario and at the federal level, which dictates how co-ops can operate and what is required in order to be considered a co-operative under the law. In Ontario, this legislation is called the Co-operative Corporations Act, and at the national level it is the Canada Cooperatives Act.

Co-operatives can either incorporate at a provincial level or at a federal level, depending on how your organization meets different criteria about how and where you operate.

The Canada Cooperatives Act

The Canada Cooperatives Act is responsible for setting out the appropriate rules and procedures for federally-incorporated co-operatives. Matters that relate to this piece of legislation are administered by the Corporations Branch of Industry Canada, and therefore federally incorporated co-ops are also regulated by this body. However, in many cases, individual co-ops are bound by and responsible to other government agencies as part of their

operations – like Revenue Canada for tax issues, or other government agencies that provide permits or regulation on specific parts of a co-op’s operation.

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FACTSheet_-_Choosing_fed_or_prov_inc