LAND TRUST STARTER GUIDE

Appendix 3: Guide to the Legal Steps to Forming a Land Trust

This document provides a recommended step-by-step process to guide the necessary process of forming a new land trust once you have decided that this is the right kind of organization to carry out your mission. Legal advice is highly recommended – this is not intended to replace the need to obtain formal legal counsel through a lawyer. The steps listed here are detailed in the checklist to follow:

• • • Make sure to give detailed plans for your current and proposed activities and clearly demonstrate that they further your charitable purposes.

Checklist

• Whether to incorporate federally or provincially/territorially depends upon what the organization intends to do and where it intends to do it. If the organization intends to carry on its activities in more than one province/territory or in areas of primarily federal responsibility (e.g. Indigenous purposes), then it would be advisable to incorporate federally to avoid the need to register in various provinces/territories. If the organization intends to carry on activities only in a specific province/territory then the incorporation may be done through the provincial/territorial process.

• For Indigenous and other land trusts that wish to uphold Indigenous governance, laws and protocols, the land trust may wish to obtain a declaration by traditional leadership and/or a Band Council Resolution that indicates authorization and support for the land trust in advance of or at the same time as applying for incorporation under federal/provincial/territorial law.

• For the corporation to be considered for registration as a charity under the Income Tax Act, the corporation must be considered to be carrying on charitable activities exclusively, as reflected in the corporation’s charitable objects or purposes.

• When you incorporate (either federally or provincially/territorially) and then apply to CRA for charitable or equivalent registration, there could be additional time and expense incurred if CRA required the corporation to amend its Letters Patent or Articles of Incorporation to satisfy the CRA requirements for charitable or equivalent registration. This is why you must ensure your governing documents include charitable purposes at law prior to applying for incorporation.

• See if there are additional steps to charitable registration in your province/territory (e.g. If incorporating a charitable corporation in Ontario, the Office of the Public Guardian and Trustee (OPGT) must approve the corporation’s objects or purposes and has provided pre-approved standard objects for charities. However, the charitable objects of land trusts are not covered by any of these pre-approved objects. As a result, the OPGT must pre-approve the land trust’s custom-made charitable objects prior to incorporation, which results in additional processing time and expense.)

• Check out the requirements for property/land tax exemption or reduction programs and, where possible, align the incorporation purposes with appropriate tax programs.

• Business and Industry Canada:
  • Choosing between federal incorporation and provincial/territorial incorporation
  • Incorporating federally
  • Incorporating in a specific province or territory

• Queen’s University Law Clinics:
  • Differences Between Federal and Provincial Not-for-Profits

• Corporation Centre Canada:
  • Non-Profit Corporation FAQ

• Futurpreneur:
  • Choosing Between Federal vs Provincial Incorporation

• To register as a charity after incorporation, ensure your Letters Patent or Articles of Incorporation satisfy the CRA requirements for charitable or equivalent registration by including charitable purposes at law. Use CRA’s guide on How to draft purposes for charitable registration.

• Consider the geography, purposes, and key terms/languages. Indigenous names written in the Latin alphabet may be used, depending on the legislation.

• It must be determined that the proposed name of the land trust is available (meaning, not being used by another entity in Canada). This is done by obtaining a NUANS corporate name search and conducting a Trade-mark search:
  • For a NUANS corporate name search, go to the Government of Canada’s Nuans – Corporate name and trademark reports ($13.80 fee)
  • For a Trademark search go to Canadian Trademarks Database (no fee)

• See Corporations Canada Questions and Answers, Articles of Incorporation (Form 4001) and Initial Registered Office Address and First Board of Directors (Form 4002) forms and instructions for federal incorporation.

• Find your applicable provincial/territorial incorporation instructions.

• By-laws might need to be drafted before submitting the application to incorporate, or within a certain period after becoming incorporated, depending on the legislation.

• Consider ways to include alternative, less formal, and/or decolonized approaches in the by-law, perhaps reflecting with permission Indigenous governance approaches in your area. These might include: terms (council or circle vs. board), representation (elders, youth, women, other-than-humans, organizations), procedures (consultation with community on significant items), decision-making (consensus vs. voting), and the like.  

• See Corporations Canada’s By-law Builder for federal corporations.

• See applicable incorporation guides for provincial/territorial incorporation.

• Ensure charitable purposes at law are used in your application for Incorporation.

• Submit your application to the appropriate provincial/territorial entity with applicable fee.

• Ensure all items and specific provincial/territorial requirements are included with your application.

• Ensure charitable purposes at law are used in your Articles of Incorporation.

• Submit Articles of Incorporation and Initial Registered Office Address and First Board of Directors forms to Corporations Canada with applicable fee online.

• Ensure all items included with form as provided for in federal incorporation forms and instructions.

• Draft online application for charitable registration under the Income Tax Act, including how you will implement your purposes, existing activities, etc.

• Where appropriate, apply for recognition by CRA as some form of equivalent status. This could include as a “public body performing the functions of government” or “qualified donee”.

• Keep in mind that most land trusts are charities that do things themselves and, thus, are a “charitable organization,” not a public or private foundation.

• Compile all supporting documents required in the application.

• Review all supporting documents, including past meeting minutes, newsletters and media, to ensure that they either align with your proposed purposes and activities, or otherwise are explained in the application’s supplementary materials.

• If there are non-arms length relationships among Directors, explain these and any conflict of interest policies you have to address them in supplementary materials.

• Consult CRA’s Policies and guidance about applying for registration.

• Browse CRA’s links on how to apply for charitable registration (i.e., their personalized document checklist, tips and examples to help you describe your charitable activities).

• The CRA requires you to submit a complete application with all applicable information and documents. If an application is incomplete, they will reject it and return it to you.

• During the application review process, CRA may contact you with questions and seek additional information. Be sure to respond promptly (there may be a deadline) and consistently.
  The expected response time can vary with large lags in time between receipt of the Application and response from CRA.

• Keep in mind that the charitable status can come into effect at the time of application or at a specified time. The latter may be useful if you are near the year-end and don’t want to report in detail on or have little financial activity in the current year.

• Be sure not to accept donations where the donor expects a charitable tax receipt at a time before the charitable status comes into effect. If you really need to receive a tax-receipted donation before this time, then make appropriate arrangements to do so through another charity or government partner. The funds or lands donated could then be later transferred to the new land trust when it has its charitable status in effect.

• See applicable provincial/territorial required documentation.

• By-laws must be sent to Corporations Canada within 12 months of incorporation.

• Canada’s Ecological Gifts Program (EGP) offers landholders of ecologically sensitive land significant tax benefits if they gift their land, or an eligible interest or right in land such as a conservation easement, covenant or servitude, to a qualified recipient. This acts as a significant incentive to support donating appropriate lands to a qualified land trust.

• To apply to become a qualified recipient, an environmental registered charity must send a request in writing to the National Secretariat, Ecological Gifts Program, Canadian Wildlife Service, ECCC, 351 St. Joseph Boulevard, Gatineau, QC K1A 0H3 or by email to ec.pde-egp.ec@canada.ca.

• To find our more about the program and what to include in your application package, read through the Canadian Ecological Gifts Program Handbook.

Please note that this document may contain links to other websites over which Alliance of Canadian Land Trusts has no control. ACLT provides no endorsement, representation or warranty of any kind regarding the products, services, content or appropriateness of such websites.