NPM700 Lecture 2: The Legal Context of Nonprofit Management 2 3
Document Summary
Without share capital implies, in any situation, that money can"t be distributed to members. Co-operatives operate on a voting basis each member has one vote and proxies are not allowed. They can carry on businesses but if these businesses generate too much profit, the organization is at risk of losing it"s tax exempt status. A cra audit shows serious non-compliance (e. g. fundraising activities: interim sanctions. Now, since 2004, monetary penalties are applied for failure to file an annual return on time, instead of revocation of charitable status. Also, the ability to issue tax receipts and receive funds from other charities may be suspended. Fundraising is not a charitable purpose in itself. A charity"s fundraising activity is unacceptable when it is: Provides more than just an incidental private benefit. Directors and officers have liability over and above the liability of the organization. In particular, they must honour their fiduciary duties: A duty of diligence or to act in good faith.
