These are also known as the letters patent, which legally incorporate the organization and provide limited liability. It is the “certificate” issued by the Companies Branch of the Ministry of Consumer and Corporate Relations once your correct application has been processed.

The application for incorporation asks for the organization’s legal name, address, names and addresses of the founding directors, and the objects for which the organization was created. Legal advice should be obtained in preparing this document as special provisions, ancillary powers and other supporting documents may also need to be stipulated for your organization.

Although incorporation creates an entity with a legal status separate from the individuals involved, not all liability is removed from the board of directors. Under Canadian law, some courts may find directors individually or jointly liable, especially if it can be proven that they have acted improperly or negligently.Any member of the board is also personally responsible for up to six months of employees’ wages. They can even be held liable for the agency’s failure to make employee income tax deductions.

Have you considered these essential steps that will allow board members to do their job? As soon as the letters patent are received, ask yourself these questions.

• We have established a director quorum.
• We have officially adopted by-laws.
• We have made appropriate banking and financial arrangements.
• We have designated custody and use of the corporate seal.
• We have established a system for the appointment of auditors and audit regulations.
• We have a system for the preparation, safekeeping and access to minutes, reports and board documents.
• We have appointed the officers of the board (i.e. Treasurer, Chair, Co-chair, Secretary etc).
• We have recently reviewed the articles which give our agency legal status.
• We have a system to ensure that board members have read and understood the original founding documents.

We need to:

Although legal advice is typically sought at this point, you may decide that your incorporation process is relatively straightforward. If you decide to proceed without a lawyer, be sure to refer to:

• Corporations Act
• Corporations Information Act
• Not-For-Profit Incorporator’s Handbook.

You can order these from Publications Ontario by calling 416-326-5300 or toll-free 1-800-668- 9938. For information on incorporation you can also call the Companies Branch of the Ministry of Consumer and Corporate Relations at toll-free 1-800-361-3223.

For the purposes of this Guide, it will be assumed that the majority of community-based literacy agencies are incorporated legal entities, as per current MET recommendations. If in doubt on these matters, seek legal advice!