Businesses and Non-profits

Starting a Non-profit: What Type of Organization Is Best for You?


There are many ways to form a non-profit organization in Quebec. There is a formal registration process for some, but you can also create an organization on your own. You might not even need to start a new organization to have an impact.

Read the summaries below or take our quiz to explore what’s best for you.

Incorporated non-profit organization (without charity status)

For someone who is committed to working with others to form an organization that helps the community or members of the organization. Are you worried about being held responsible for the organization’s debts and liabilities? Do you hope to hire staff? If so, incorporation may be right for you!

Key points

  • Incorporation creates a legal entity separate from an organization’s members and board of directors. If something goes wrong, generally, the organization will be held legally responsible and not members or directors personally.
  • This organization is not a registered charity and so usually cannot issue tax receipts for donations. (If the organization meets specific criteria, it can apply to become a registered charity.)
  • Incorporated non-profits are not restricted in their political activities like registered charities.
  • The organization can usually run a limited surplus without paying income tax. But for most organizations, the extra money cannot be shared among members.
  • This type of organization has a democratic decision-making structure centered around members and a board of directors.
  • Expect to spend some time and money incorporating and following required decision-making procedures and reporting requirements. (But not as much time as you would as a registered charity!)
  • You can incorporate with the Quebec government (Quebec uses the term “non-profit legal person”) or the federal government (Canada calls it a “not-for-profit corporation”). There are pros and cons to both options.

Example: You want to start an organization advocating for a social cause. You will promote political candidates who support that cause. You’ll fundraise through grants and fundraising events.

Registered charity

For someone who is committed to working with others to create an organization that fights poverty, advances education or religion, or serves the community in another recognized way. The organization might fundraise by accepting donations and is prepared to follow special government rules.

Key points

Example: You run a food bank in your town and have a strategic plan in place to expand your operations to other towns through foundation grants and charitable donations.

Contractual association (without charity status)

For someone who wants to work with others to achieve a common goal that is not profit-making for its members. This person may not want to spend a lot of time doing administrative work and may feel that incorporation is not necessary to manage risk.

Key points

  • You can form a contractual association by adopting a constitution with others (for example, creating by-laws) or even by making a verbal agreement.
  • A contractual association that is not a registered charity can serve members or the community at large.
  • If you wish to become a registered charity, you must have a constitution that meets federal requirements.
  • Contractual associations are not incorporated. The board of directors (or people acting like directors) can be held personally responsible for debts or harm caused by their decisions.
  • Without charity status, most contractual associations cannot issue tax receipts for donations. But there are exceptions, for example, for some amateur sports associations.
  • Contractual associations that are not registered charities are generally not limited in their political activities.
  • Contractual associations can mostly decide on their own how they want the organization to make decisions. (If not, there are some rules in Quebec’s Civil Code.)
  • You don’t have to register your association with Quebec’s enterprise register, but you can.

Example: You want to create a bird watching group that meets up monthly. You will set criteria for who can be a member and participate in meet ups.


For someone who wants to work together with others to start a business that meets the needs of co-op members. This person wants to benefit from an established democratic decision-making structure (1 person, 1 vote) and follow cooperative principles.

Key points

  • You can create a cooperative provincially or federally, but federal cooperatives must have activities and a physical place of business in more than one province.

Important! The rules below are for cooperatives created under Quebec law.

  • Cooperatives serve members while also promoting cooperatives and community development.
  • Depending on the type of cooperative, you must have 3-5 members to start.
  • In most cases, members must personally use the cooperative’s services and purchase shares.
  • A cooperative is a “legal person” separate from its members and board of directors, so these people are generally not personally responsible for the cooperative’s debts.
  • Unlike registered charities, cooperatives cannot usually issue tax receipts for donations.
  • Cooperatives have rules to follow when distributing profits. For example, some money must be set aside for the future. Also, cooperatives pay members based on how much business each member does with the cooperative.
  • Cooperatives have a formal, democratic decision-making structure: 1 person, 1 vote regardless of the amount of money a member contributes to the organization.
  • Cooperatives usually have a board of directors. They may have a separate general manager.
  • Cooperatives can raise money in different ways, for example, through loans (with some restrictions) and by selling shares (also with some restrictions).
  • Funding sources and support exist specifically for cooperatives in Quebec.
  • For more information about cooperatives:

Example: You’re an artist who wants to create, present, or sell your art in a space that is shared with other artists and managed by all of you collectively.

Social enterprise (for-profit business that helps the community)

For someone who wants to work alone, or with others, to start a business that has a positive social impact.

Key points

  • In Quebec, there is no special “social enterprise” legal structure. “Social enterprise” is a general term that can apply to any organization that sells a good or service and aims to achieve a social goal at the same time.
  • The good or service may serve the community, and you can also use profits to achieve social goals.
  • You can choose a legal structure that allows you to make decisions and finance your business according to your needs.
  • Sometimes non-profits and charities also sell goods or services to fund their missions. But there are limits on how they can do this. For example, the business of a registered charity must be run by unpaid volunteers or connected to the charity’s purpose.


  • You want to sell biodegradable toothbrushes and give a certain percentage of your annual profits to organizations that protect rainforests. You want to keep the rest of the money for yourself.
  • You start an organization that offers workshops to parents on a sliding scale. The user fees more than cover the cost of offering the workshops.

Alternatives to forming a new organization

The more you look into forming an organization, the more you realize you can make a larger impact by joining forces with an existing group. You might want to partner with another group as a volunteer or donate to that group for a specific program.

Key points

  • Partnering with another group means less administrative work and risk for yourself.
  • You can benefit from already established expertise in an area that interests you. (This could help you develop a business or development plan for your own organization later.)
  • When you donate to a registered charity you can get a benefit on your income taxes. You could also leave an organization a donation in your will.
  • If your objective is to give away a large sum of money, you could speak with a lawyer about setting up a trust, which itself can become a registered charity.


  • After coming up with an idea to provide support to Spanish-speaking entrepreneurs, you decide to partner with an existing organization to adapt their materials for Spanish-speakers.
  • You make a donation to an organization you admire for a specific project.
  • More information.