{"id":18182,"date":"2024-10-31T09:54:02","date_gmt":"2024-10-31T13:54:02","guid":{"rendered":"https:\/\/www.millerthomson.com\/?post_type=insights&p=225741"},"modified":"2026-04-23T13:22:03","modified_gmt":"2026-04-23T17:22:03","slug":"payments-to-directors-and-connected-persons-key-info-for-ontario-charitable-corporations","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/social-impact\/payments-to-directors-and-connected-persons-key-info-for-ontario-charitable-corporations\/","title":{"rendered":"Payments to directors and connected persons: Key info for Ontario charitable corporations"},"content":{"rendered":"\n

Directors of \u2018charitable corporations\u2019 operating in Ontario are subject to strict requirements to act without personal benefit \u2013 meaning they cannot be paid for serving as directors or for other services provided to the corporation unless authorized by court order, or pursuant to Ontario Regulation 4\/01 under the Charities Accounting Act <\/em>(the \u201cRegulation\u201d). The Regulation eliminates the need for a court order for most payments to directors or \u2018connected persons,\u2019 for goods, services, and facilities (hereafter called \u201cservices\u201d) that they provide to a charitable corporation, provided that specific conditions are met. This article summarizes the conditions that must be met before Ontario charitable corporations can authorize a payment to a director.<\/p>\n\n\n\n

The Regulation applies to corporations deemed to be trustees under the Charities Accounting Act<\/em>. Guidance[1]<\/a> from the Ontario Public Guardian and Trustee (the \u201cGuidance\u201d) refers to such a corporate trustee as a \u201ccharitable corporation,\u201d which it defines as any non-share capital (not-for-profit) corporation operating in Ontario that is a registered charity or has exclusively charitable purposes; the definition does not include trustees of charitable trusts or non-incorporated charitable organizations (charitable corporations will hereafter be referred to as \u201ccharities\u201d).  “Connected persons” are defined under the Regulation and Guidance as including the family members of a director, the employer of a director or their family members, and certain corporations or partnerships in which the director or a family member is involved.<\/p>\n\n\n\n

Conditions for payment authorization<\/h2>\n\n\n\n

To make payments to directors or connected persons, a charity must meet the following conditions outlined in the Regulation and supported by the Guidance:<\/p>\n\n\n\n