Glossary of Terms

Certification:

The document must bear the stamp or seal of the government authority which issued the document in case of an incorporated entity. We accept photocopies as long as they are legible, but reserve the right to ask for originals. In the case of a constitution or trust, the document must be signed by at least three of its officers and include the effective date.

Governing Documents:

Documents which set out, limit and circumscribe the purposes and powers, and set down the fundamental characteristics and general structure of the organization (i.e. non-profit status). If an organization is not incorporated, it may be established under some other form of governing document (see "constitution document" or "trust document").

(the) Community of Artists:

Represents the community of artists from one or more of the following sectors of activity in the arts community across Canada in an official language of Canada: theatre, opera, music, dance, painting, sculpture, drawing, crafts, design, photography, the literary arts, film, sound recording and other audio-visual arts, and such other sectors as the Minister of Canadian Heritage may recognize.

Constitution Document:

A document which legally establishes an organization and which is the absolute rule of action and decision for all parts and officers of the organization and which controls the organization until the document is formally amended as provided for therein (see "governing document"). The basic requirements for a constitution document are listed in Appendix A.

Incorporating Documents:

Documents which establish an organization as a corporate entity under a statute. Examples of incorporation documents are Letters of Patent, Application for Incorporation, Certificate or Articles of Incorporation, Memorandum of Association (see also "governing documents").

Gift:

At Law, a gift (donation) is a voluntary transfer of property without consideration (benefit) received in return. Note that there are three elements, all of which must be met in order to qualify as a gift for tax purposes: (1) it must be voluntary; (2) it must be property and (3) there must be no consideration. Fiscal Year : It is generally 12 months. Your organization must keep a record of its income and expeditures, assets and liabilities for this period. Quite often an organization identifies its fiscal year end in its by-laws.

Charitable Organization:

A registered national arts service organization must satisfy the operational requirements of a charitable organization as imposed by the Income Tax Act. The detailed information, please refer to page 3 of the enclosed Information Circular 80-10R.

Bylaws:

Rules and regulations adopted by an organization, corporation or similar entity for its internal administration and management. For example, by laws often identify the duties of officers, the fiscal year end of the organization and the disposition of assets upon the organization's dissolution.

Trust Document:

A document which establishes a trust to hold property to be administered by Trustees for the benefit of others (see governing documents). The basic requirements for a trust document are listed in Appendix B.

Statute:

An act of federal or provincial legislation which declares the law pertaining to a certain subject (e.g. the Income Tax Act, The Canada Corporations Act, the British Columbia Society Act, The New Brunswick Companies Act). Statutory law is legislatively created law.

Qualified Donees:

A term exclusive to the Income Tax Act. Qualified donees are a specific type of entities to which a registered national arts service organization may gift its funds and resources. Please refer to Appendix C for a list of these entities.

Non-profit Organization:

Section 149(1)(1) of the Income Tax Act defines a "non-profit organization" as follows:

"A club, society or association that, in the opinion of the Minister, was not a charity within the meaning assigned by subsection 149.1(1) and that was organized and operated exclusively for social welfare, civic improvement, pleasure or recreation or for any other purpose except profit, no part of the income of which was payable to, or otherwise available for the personal benefit or, any proprietor, member or shareholder thereof unless the proprietor, member or shareholder was a club, society or association the primary purpose and function of which was the promotion of amateur athletics in Canada."

National Arts Services Organization:

Section 149.1(6.4) of the Income Tax Act states the following:

Where an organization that applies in prescribed form to the Minister of National Revenue for registration, that Minister may register the organization for the purposes of this Act.

has, on written application to the Minister of Canadian Heritage describing all of its objects and activities, been designated by that Minister on approval of those objects and activities to be a national arts services organization
has, as its exclusive purpose and its exclusive function, the promotion of the arts in Canada on a nation-wide basis,
is resident in Canada and was formed or created in Canada,
complies with prescribe conditions.

Where the organization so applies or is so registered, this section, paragraph 38(a.1), sections 110.1,, 118.1, 168, 172, 180 and 230 and Part V apply, with such modifications as the circumstances require, to the organization as if it were an applicant for registration as a charitable organization or as if it were a registered charity that is designated as a charitable organization, as the case may be.

The activities of the organization must be confined to one or more of:

promoting of one or more art forms;
conducting research into one or more art forms
sponsoring art exhibitions or performances;
representing interest of the arts community or a sector thereof (but not individuals) before legal or governing bodies;
conducting workshops, seminars, training programs and similar development programs relating to the arts for members of the organization where such activity results in the members including the value of the program in their income under paragraph 56(1)aa) of the Act;
educating the public about the sector represented by the organization;
organizing and sponsoring conventions, conferences, competitions and special events relating to the sector represented by the organization;
conducting studies and surveys of interest to members of the organization relating to the sector represented by the organization;
acting as an information centre by maintaining resource libraries and data bases relating to the sector represented by the organization;
disseminating information relating to the sector represented by the organization;
paying amounts to which paragraph 56(1)n) of the Income Tax Act applies in respect of the recipient and which relate to the sector represented by the organization.

Judicial Review:

Judicial review is the exercise of a law court's inherent power to determine whether action is lawful or not and to award suitable relief. Instead of substituting its own decision for that of some other body, as happens when an appeal is allowed, the court of review is concerned only with the question of whether the act or order under attack should be allowed to stand or not. If, for example, the Department of Canadian Heritage refuses to designate a particular group as a national arts service organization, the applicant is restricted to judicial review. But in some instances of revocation of an organization's designation and registration under the Income Tax Act, the applicant has appeal rights under that Act.

Arm's Length:

A concept which determines whether taxpayers are related to one another. Normally, persons who are related by blood, marriage or adoption, or persons who have close business ties or corporate association, are deemed not to deal at Arm's length@. As well, persons who are not related may not deal at arm's length depending on the situation. Examples of unrelated persons who do not deal at arm's length might be persons who are business partners, major shareholders in a closely held corporation, and persons involved in an employer-employee relationship. If you are unsure whether persons are not related are still dealing at arm's length you should seek the advice of the Charities Division at Revenue Canada, Taxation at (613) 954-6215.

Nation-wide:

The organization's activities must be carried on across Canada by means of eligibility criteria or other standards established for the entire artistic sector across the country or other indicators such as geographic boundaries of activities, competitions or geographic representation of artists from all parts of the country.

Registered National Arts Service Organization:

An organization that has been registered by the Minister of National Revenue under new section 149.1(6.4), and which registration has not been revoked.