A new cycling club is asking, is incorporation really necessary? Spoiler alert, it is as it offers liability protection, clarity, and credibility even thought no one likes to volunteer to fill in government paperwork.

The following is meant for general information and is not intended as legal or professional advice. Consult a lawyer for your specific circumstances.

1. Three Types of Charitable/Nonprofit Organizations
2. What Has Incorporation Ever Done For Me?
3. Persnickety but Not Complex
4. Annual Reporting
5. 1. Does the Alberta club have to become a registered society in the province?
6. 2. Could the Alberta club fall under the BC club’s provincial registration
7. 3. What Should the Mother Club ‘Do’ to Support Daughter Clubs
8. The Burden of Volunteering and Incorporation
9. Notes and References
10. Further Reading
11. Annex – Typical Benefits of Incorporating

I have been asked to help to set up a local cycling club in Alberta. It will only be the second chapter for this British Columbia (BC) based nonprofit outside of that province. A series of questions arose pertaining to the legal structure of the Alberta club, with three questions in particular:

1. Does the Alberta club have to become a registered society in the province; what are the costs and benefits?
2. Could the Alberta club fall under the BC club’s provincial registration and still exclusively operate in Alberta?
3. Looking ahead, what should the ‘mothership’ club do to make it easier to form daughter clubs in other provinces?

Three Types of Charitable/Nonprofit Organizations

There can be a lot of confusion when it comes to the possible legal structures, so let’s start with the basics here in Alberta. In a previous post, Volunteering Definitions, I listed the three main types of nonprofit organizations:

• Non-Profit: a broad collection of organizations typically registered as a charitable corporation or a society here in Alberta, but which can NOT issue a tax receipt. 
• Unincorporated Association: a collection of individuals working toward a common non-profit goal but without the protection afforded in law as a corporation or society.
• Registered Charity: is an organization approved and registered by the Canada Revenue Agency (CRA).  It may be a society, corporation, trust or other entity.  It can also engage in some limited for-profit activities (think of a candy shop in a hospital). 

Why anyone would want to bother with the first type, Nonprofit, when the second one, Unincorporated Association, is so much easier? In a word, risk management. Okay two words, but basically it reduces the risk to the board and provides credibility.

The third category, Registered Charity, is a red herring as it is not an organization type but instead a certification of sorts from the CRA. The requirements to become a charity are stringent and reporting obligations much greater than that of a simple society. Fortunately, this is a topic that can be ignored for this post as the cycling club will not be seeking charitable status.

What Has Incorporation Ever Done For Me?

Incorporation and ongoing yearly compliance are irksome but not onerous. More on the incorporation part in a moment. But first, why bother in the first place? The benefits of incorporation can be summarized as follows:

1. Reduce Board Liability. The nonprofit is a legal entity and assumes the liability rather than the board members. Well sort of. Board members still need to act in good faith, but this is an important layer of risk mitigation for a volunteer board.
2. Clarity in the Community. From opening a bank account, applying for a grant, contracting with a porta-pottie service, being a legal entity has its benefits. An association relies on a volunteer being that identity and taking on any associated risks.
3. Forced Clarity of Roles. If drafted by a newbie, a society’s bylaws will tend to be over written and prescriptive. Drafted by an old-hand, they will be both minimal and just enough to cover most changes in things like a disgruntled member or departing board member (see the discussion on Service Alberta’s bylaws below).
4. Clarity on Taxes. For a small nonprofit (SNP) with revenues barely breaking a $1,000 a year, not really a problem. For a larger organization running a festival with sales receipts in the six figures, this can be a real problem. Incorporated, the revenue and associated net profit/loss belongs to the organization [1]. Unincorporated, the Canada Revenue Agency or the collection agency for the porta-pottie company may come knocking.

Additional benefits associated with incorporation are detailed in an Annex below.

Persnickety but Not Complex

Incorporation in Alberta is straightforward… and persnickety. For example, if you use your own bylaws, expect the Service Alberta Analyst to ensure that you have thought of the basics. Alternatively, you can use the template provided on the government’s website [2].

As bylaws are almost never read or referred to again, I would suggest using the default that Service Alberta provides. Fill in a few blanks and nary a murmur from Service Alberta. They bylaws can be augmented through organizational policies. The bylaws and the Application to Form an Alberta Society requires the same people sign in both places.

A name search (to ensure the name is unique) and the payment of $51.50 rounds out the process. Plan to go back and forth a little with Service Alberta. Their job is to make sure you have thought of everything which will save you time in the long run. Persnickety but necessary!

Annual Reporting

Each nonprofit must submit an annual report, the bad news. The good news is that if there were no changes from a previous year, last year’s pdf will probably work fine. The one thing that will change is the need for audited financial statements.

Audited can mean that a CPA firm has conducted financial audit (and may even have created the financial statements). This is probably over kill for a small nonprofit with a few dozen transactions that can be signed off by two non-board members.

1. Does the Alberta club have to become a registered society in the province?

To answer the first of the three questions, the Alberta club does not need to be incorporated but it should be. Cycling is a moderate risk activity. Falls and motor vehicle accidents are just two of a myriad of risks. The volunteer board of the chapter must be protected from these risks. Incorporation is one layer of a multi-layer strategy that also includes insurance, waivers, training, and safety protocols.

2. Could the Alberta club fall under the BC club’s provincial registration

Based on one reference the answer is, probably not. While an occasional activity outside of BC is cool (e.g. running a cross Canada bike tour), running ongoing programming probably negates any benefits provided by the BC incorporation. B.I.G. Charity Law Group has this to say for when extra-provincial registration is required [3]:

Maintaining a physical address, employees, conducting ongoing programs or activities, soliciting donations or fundraising, holding regular meetings, having significant property, or meeting other province-specific thresholds for “carrying on activities”. Mere occasional contact with a province generally doesn’t trigger registration requirements.

3. What Should the Mother Club ‘Do’ to Support Daughter Clubs

In the short run, the Mother Club should support the Alberta nonprofit incorporation. This includes ensuring that its insurance policies allow for operations in Alberta.

The Mother Club needs to be aware of non-governance obligations operating in different provinces. For example, in Alberta, volunteers are considered ‘unpaid employees’ under the provincial occupational health and safety legislation (see Safety and the Volunteer: How to Comply With/Excel at AB’s OHS Requirements). What other lurking provincial obligations are there? Ideally, the Mother Club uses the highest standards (were reasonable) and applies them nationally.

Down the road, if additional non-BC clubs are planned, the Mother Club needs to incorporate federally. This requires some initial administration effort, likely de-incorporating the BC (and Alberta) societies, but is well worth it for the long term growth potential.

If the club wants to expand outside of Canada and into the US, having a national level corporation may help with the complexity of US registration.

The Burden of Volunteering and Incorporation

I know of at least one organization that has delisted itself as an Alberta Society because it was too much effort to maintain incorporation. I am a little surprised at this decision and certainly, I would not be on the board because of the risk. At the same time, I understand that The Burden of Volunteering is a real thing and filling out paperwork is not high on the list of desired volunteer activities.

Alberta has fallen behind BC and Ontario in allowing for things such as online reporting. Perhaps fodder for future posts. In the meantime, my advice to the cycling club: incorporate in Alberta and then unincorporate when the federal incorporation takes effect.

Although bothersome, incorporation is well worth the effort to protect a nonprofit’s most valuable volunteers – its board members.

Notes and References

1. Agency, Canada Revenue. “Income Tax Guide to the Non-Profit Organization (NPO) Information Return.” Guidance. June 22, 2017. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4117/income-tax-guide-non-profit-organization-information-return.html.
2. “Incorporate a Society | Alberta.Ca.” August 22, 2025. https://www.alberta.ca/incorporate-a-society.
3. “Federal vs. Provincial Incorporation for Canadian Nonprofits: Pros and Cons.” Accessed September 2, 2025. https://www.charitylawgroup.ca/charity-law-questions/charitable-purpose https://www.charitylawgroup.ca/charity-law-questions/federal-provincial-incorporation-canadian-nonprofits-comparison.
   

Further Reading

• The Benefits of Incorporating your club society or Nonprofit in Alberta

Annex – Typical Benefits of Incorporating

The following was compiled from a variety of sources.

1. Limited Liability: Incorporation protects the personal assets of directors and members from the organization’s debts and legal actions.
2. Legal Identity: An incorporated nonprofit becomes a distinct legal entity, allowing it to own assets, enter into contracts, sue, and be sued in its own name.
3. Name Protection: Incorporating your non-profit gives it a unique name, preventing confusion with other entities and protecting its brand identity.
4. Enhanced Credibility: A formal, legally recognized structure increases trust and credibility with the public, donors, and volunteers.
5. Access to Grants: Many foundations and government programs require non-profits to be incorporated to be eligible for grants and funding.
6. Tax Exemptions: Non-profits can be eligible for tax exemptions on their activities and may qualify for other tax-related benefits, though they must still file relevant information returns.
7. Formal Structure: Incorporation provides a recognized structure for the organization’s mission, with power divided among a board of directors.
8. Long-Term Agreements: Incorporation simplifies and secures long-term agreements, such as those for venues or equipment, by providing a stable legal framework.