Incorporation and Grant Eligibility

Most programmes will not fund an unincorporated applicant, and several will not fund the wrong kind of incorporated one. The entity is the first eligibility question and the slowest one to change.

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Entity ChoiceProvincial or FederalPurposesFixing a Structure

Whether you can hold a grant is decided by what the applicant legally is. That is settled at incorporation, and changing it later is slower than every intake window.

Who does this work. Lexaltico LLP’s government funding and grants service is led by Mitch Parmasar, who is not a lawyer and does not provide legal advice. Where a matter calls for legal advice — a funding agreement, a governance question, a repayment demand — it is handled by a lawyer at Lexaltico LLP. The firm is responsible for all of the work described on this page.

Quick Answer

Do we need to incorporate to get a grant?

For most programmes, yes. Funders generally require an applicant with its own legal existence, a bank account in its own name and financial statements, and an unincorporated business or community group has none of those. Which form of incorporation also matters: a for-profit corporation, a non-profit corporation under the Not-for-Profit Corporations Act, 2010, and a registered charity are treated as three different kinds of applicant, and a programme open to one is frequently closed to the others.

Ontario law · Lexaltico LLP, Toronto · introductory call

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THE THRESHOLD

An Applicant Needs Its Own Legal Existence

Programmes need to contract with something. They ask for a legal name, a registration, a bank account in that name and financial statements, and they will pursue that entity if money has to be repaid. A sole proprietorship or an unincorporated association cannot supply most of that.

So incorporation is less a strategy for getting funding than a precondition for being considered. The exceptions are real but narrow: some programmes for individuals, and arrangements where an eligible organisation holds a grant on an unincorporated group’s behalf.

WHICH FORM

For-Profit, Non-Profit or Charity

These are three different applicants. NRC IRAP, for instance, is for profit-oriented businesses and not for non-profits. Ontario Trillium Foundation community funding is for eligible non-profits and similar bodies, not for businesses. Some foundation funding requires a registered charity, because the funder can only give to qualified donees.

Choosing the form for funding reasons alone is a mistake — it has tax, governance and control consequences that outlast any grant — but knowing which funding each form opens and closes should be part of the decision rather than a discovery afterwards.

PROVINCIAL OR FEDERAL

Less Decisive Than People Expect

Whether to incorporate provincially in Ontario or federally is a real decision, driven by where the organisation operates, name protection and filing obligations. It is rarely the thing that decides grant eligibility: programmes generally ask whether you are incorporated in Canada and established in the relevant place, not under which statute.

It is worth checking the specific programme rather than assuming either way, but this is not usually where an application fails.

PURPOSES

For a Non-Profit, the Objects Do the Work

For a non-profit applicant, the purposes stated in the articles define what the corporation exists to do, and a funder reads them when assessing eligibility. A project outside them is a project the organisation is not constituted to undertake.

Purposes drafted at incorporation from a template are the usual source of trouble: either narrow, describing the single activity the founders had in mind, or so broad that an assessor cannot tell whether anything falls inside them. Amending them needs a properly passed resolution and a filing, and takes weeks.

GETTING IT RIGHT

Incorporating With Funding in Mind

A few things cost nothing at incorporation and are awkward to retrofit: the operating name actually registered, a bank account in the corporation’s own name from the first day, a share or membership structure that is clear on paper, a minute book that exists, and purposes broad enough to cover what the organisation intends to do next.

None of that is exotic. It is the difference between an eligibility review that takes an hour and one that produces a list of repairs.

IF IT IS ALREADY WRONG

Most of It Is Fixable

A company trading under an unregistered name, banking personally, with no minute book and objects that do not cover the work, is a common position and a repairable one. The repairs are ordinary: register the name, open the account, reconstruct the records, amend the articles.

What they are not is fast. This is the recurring theme of every eligibility question: the work takes weeks and the intake window is four, which is why it belongs before a programme is chosen rather than after.

HOW WE WORK

What Lexaltico Does on an Entity Question

Where a client is about to incorporate and funding is part of the plan, the useful step is a short conversation about which forms open which funding before the articles are filed. Where the entity already exists, it is an eligibility review and a list of repairs.

Programme requirements and fit are led by Mitch Parmasar, who is not a lawyer. Incorporation, the objects, amendments and the structure itself are handled by a lawyer at Lexaltico LLP. Fees are quoted and agreed in writing before work begins.

Common Questions

Frequently Asked Questions

Do we need to incorporate to get a grant?

For most programmes, yes. Funders need an applicant with its own legal existence, a bank account in its own name and financial statements.

Can a sole proprietor get a government grant?

Rarely from programmes designed for businesses, which generally require incorporation. Some supports for individuals exist, and they are a different category.

Does it matter whether we incorporate provincially or federally?

Usually not for eligibility — programmes ask whether you are incorporated in Canada and established in the relevant place. Check the specific programme, but this is rarely where an application fails.

Will incorporating as a non-profit open more funding?

It opens different funding and closes some. Non-profit and for-profit programmes are largely separate, and some funders require registered charity status on top.

Our objects do not cover what we now do. Does that matter?

For a non-profit applicant, yes. Funders read the purposes in the articles, and amending them needs a properly passed resolution and a filing.

Should we incorporate just to be eligible?

Not on that basis alone — the form has tax, governance and control consequences that outlast any grant. But the funding each form opens should be part of the decision.

We incorporated badly. Can it be fixed?

Usually yes. Registering the operating name, opening a corporate account, reconstructing records and amending articles are ordinary work — just not quick.

How long before an intake should we sort this out?

Months rather than weeks. Almost nothing that determines eligibility can be changed inside a four-week window.

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Talk to Us About Incorporation and Funding

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What kind of organisation is it? optional

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Is there an application or response deadline? optionalMost funding programmes close on a fixed date and do not reopen, so tell us any date you have.

Which programme, if you know it? optionalFor example SR&ED, IRAP, CSJ, or an Ontario or municipal grant.

Please do not send confidential documents or details through this form. We will ask for what we need once we have spoken and confirmed we can act for you.

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