Summary Policy

Date
September 3, 2003 (Revised March 09, 2009)

Reference Number
CSP - D15

Key Words
Dissolution clause

Policy Statement

Under the Income Tax Act, a registered charity can only transfer its remaining assets to a qualified donee upon its dissolution. Therefore, a registered charity's governing documents should include a clause to the effect that upon winding up or dissolution, all its remaining assets after payment of its debts must be distributed to one or more qualified donees.

However, where a Notice of Intention to Revoke a Charity’s Registration (Form T2051A) has been issued, a registered charity can only transfer assets to an eligible donee during the winding-up period. 

References

• Eligible Donee, CSP-E09.
• Governing Document, CSP - G06.
• Qualified Donee, CSP - Q01.
• Revocation, CSP - R12.
• Winding-up Period, CSP-W03
• Registering a Charity for Income Tax Purposes, T4063.
• Income Tax Act, R.S.C. 1985 (5^th supp.) c. 1, ss. 149.1(1) to (4), 188(1.1) and (1.3).