CHAMP - CRA backtracks on giving internal divisions separate BN numbers

March 11, 2018 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: What's New from the Charities Directorate of CRA, Canadian Charity Law, Applying for Registered Charity Status, Receipting by Canadian Registered Charities, Transparency

CRA has noted on the Charities IT Modernization Project (CHAMP) page that internal divisions will be able to access the CRA online system without obtaining a new BN number.  In September of 2017 we blogged about developments relating to "head bodies" and "internal divisions".  Previously they had said that they will be issuing new distinct BN numbers to each internal division but now they will not.

CRA recently added to their CHAMP the following:

I am a head body with internal divisions. Will the internal divisions be able to access the portal?

Yes. Internal divisions will be able to access the portal under the 15 digit BN they have already been assigned. Head bodies can provide authorized representatives for their internal divisions with access to the portal by following these simple instructions. More information is also available on our Represent a client page.

The CRA also updated their internal divisions guidance recently.   It had said:

3.    What is an internal division?

The term internal division is not defined under the Act. However for the purpose of this guidance, we consider an internal division to be a branch, section, parish, congregation or other division of a registered charity that is established in Canada and that receives donations on its own behalf. It operates as an extension of and under the authority of the head body and it must further the charitable purpose of the head body. It is not a legal entity in its own right and does not have its own governing documents, but instead operates under the governing document of its head body. An internal division is registered separately with the CRA from its head body but remains in a subordinate position to the head body. It has its own charitable number.  

Now the CRA states (with the additional information in bold):

3.    What is an internal division?

The term internal division is not defined under the Act. However for the purpose of this guidance, we consider an internal division to be a branch, section, parish, congregation or other division of a registered charity that is established in Canada and that receives donations on its own behalf. It operates as an extension of and under the authority of the head body and it must further the charitable purpose of the head body. It is not a legal entity in its own right and does not have its own governing documents, but instead operates under the governing document of its head body. An internal division is registered separately with the CRA from its head body but remains in a subordinate position to the head body.

The internal division will be given a registration number that includes the nine digit Business Number (BN) of its head body followed by the program identifier "RR". The difference between an internal division’s registration number, and its head body’s registration number is the last 4 digits, referred to as the reference number. Each will have its own reference number. For example, when a head body has the registration number 123456789RR0001, its internal division might be given the registration number 123456789RR0002. This is consistent with the CRA’s policy of one BN per legal entity.  

 As internal divisions will not be receiving new BN numbers they will also not need to adjust their official donation receipts.

As there are changes with CHAMP will continue to blog about them.

Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

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