20 January 1995 External T.I. 9500745 - APPROVED ASSOCIATION

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Requirements for Approved Association Status

Position TAKEN:

N/A

Reasons FOR POSITION TAKEN:

N/A

		5-950074
XXXXXXXXXX	J. Thompson

Attention: XXXXXXXXXX

January 20, 1995

Dear Sirs:

Re: Application for "Approved Association" Status

This is in reply to your facimile transmission dated January 11, 1995 in which you requested the requirements necessary for an organization to become an "approved institute or association" for purposes of the scientific research and experimental development (SR&ED) tax incentives under the Income Tax Act (the "Act") and the Regulations thereto.

In order for an association or organization to obtain "approved" status, certain information and documents in respect of the association must be submitted to the Department for approval.

The requirements concerning the application and granting of approved status are as follows:

1.To be considered an "approved" association for the purposes of section 37 of the Act, the association must receive written approval from this Department.

2.In order for an organization to become an approved association it must meet the criteria of a non-profit organization and be able to demonstrate that it is able to carry out SR&ED in Canada on an ongoing basis. More specifically, all of the following requirements must be met:

(a) It must have the facilities and personnel capable of carrying out SR&ED as defined in the Act.

(b) It must carry on only activities that are unquestionably SR&ED.

(c) It must satisfy the requirements for non-profit status such as; no personal benefit to members, no control of other associations, satisfactory provisions for distribution of assets upon dissolution, etc.

(d) The general public must be a beneficiary of the results of any successful research.

(e) The funding of the research institute must be sufficient to ensure ongoing SR&ED.

3.There is no charge by our Department to approve an association. However, in order to enable this Department to examine a request and provide approval, we would require copies of the following documentation relating to the organization and its activities:

(a) identification of the legislation or statute under which the institute was created;

(b) copies of the organization's charter, code of ethics and by-laws which should indicate (i) that the organization does satisfy all requirements described in clause 37(1)(a)(ii)(A) of the Act and the post- amble thereto and (ii) how its property will be distributed in the event of a wind-up;

(c) a detailed description of the association's arrangements for obtaining funds;

(d) a detailed description of the association's arrangements for disbursing funds;

(e) organizational brochures or any literature describing the institute's objectives and activities;

(f) financial statements for prior years, if any; and

(g) details of the research activities to be carried out by the association in the future and evidence that it has the staff and facilities to carry out such activities.

We hope that you will find the foregoing comments helpful. Should you require any additional information please do not hesitate to contact us.

Yours truly,

for Acting Director
Manufacturing Industries,
Partnerships and Trusts Division
Rulings Directorate
Policy and Legislation Branch