17 operations and meetings. They still help the corporation meet its requirements under the law. Corporate Records A corporate entity must maintain cur- rent copies of its constituting documents (Articles of Incorporation, Articles of Continuance, Letters of Patent, Supplementary Letters of Patent, etc.), bylaws and minutes of meetings or reso- lutions. Organizations operating in more than one province would also be expect- ed to have copies of their extra-provin- cial registration. Meetings Compliance with the various corporate acts requires minutes of meetings of both directors and members. Members generally meet annually while directors generally meet more often – both should have records of all their formal meet- ings. If issues are discussed at informal meetings, it is a good idea to make records of those as well. Often, the fact that it had the discussion is in itself valuable and it would be unwise for a charity to self-censor its minutes. Format There is no specific requirement that the record of happenings at meetings be kept in any particular way for the CRA’s purposes (although for purposes of con- sistency, groups may wish to follow standard processes). Therefore, meetings that simply have notes of what was said and confirmed as accurate by the bulk of the attendees at the meeting are suffi- cient for most purposes. Keep in mind that most corporate stat- utes do mandate that certain issues be dealt with by the members and/or direc- tors and there may be technical require- ments be met in the resolution. Transactional Records The vast majority of records held by a charity are its ‘transactional’ records. They are created by the day-to-day transactions of the organization and include its bank account statements, cheques, records of employee payment, invoices, statements of account, deposit books, etc. These are generally easy records for the organization to obtain as they are created by third parties. The challenge for most charities is to orga- nize these records into some logical for- mat in order that their T3010 can be produced at the end of the year. This role generally falls to a bookkeeper or some other individual prepared to keep these records. On the assumption that the bulk of these records are being created by a third party, and that the charity simply needs to keep them, the charity will not face any difficulty in ensuring that its transactions are properly maintained. However, there are situations in which a charity faces difficulties because it is in a non-commercial or non-traditional set- ting. Charities that engage in relief of poverty may find it difficult to track the expen- ditures with which they give alms to the poor. This can be obvious in a situation where the charity distributes food to individuals that simply need it or seem to need it. While the CRA is obviously aware that a charity is engaged in the provision of food for the hungry, it may ask how it can be certain that food is being given only to the poor and is not, for example, being distributed to the employees of the organization or being sold. While the CRA can be forgiving in such situations, it can, in some cases, be extremely difficult to ensure that records are maintained, to demonstrate that the charity’s resources are being properly used. Some foreign countries present another problem in that often the normal trans- actional records we would expect in Canada – say on the purchase of office supplies – simply may not exist there. Receipts and invoices are simply not used in some parts of the world. Charities should seek alternate means to track their resources. Additional Records Again, while there is no legal definition of ‘additional records’, these may include emails or letters to the organiza- tion — and they may include records that the organization purposely creates in order that the CRA, if it ever looks to see, will accept as proof that the organi- zation is properly meeting its responsi- bilities. Emails to and from the organization and letters to the organization must clearly be maintained. Charity officials should be careful to separate out their personal from official comments as an official may be unable to claim privacy over these emails. Moreover, emails between individuals may not necessarily be entered into the charity’s records (say in a situation where they are not being saved by a corporate server). In these circumstances, directors should make sure to copy the charity so that the char- ity’s obligations to keep records is met. Creating Records The organization may also seek to create records to show that it meets the legal tests involved. For example, to ensure that a charity’s resources are properly used in a foreign country the charity may have the volunteers make reports, take pictures or record videos that are not otherwise necessary. Obviously, a charity must first understand the legal principle that it seeks to establish before creating the record. On this point, the charity should seek legal advice before proceeding. Fundamentally, it is important that a charity understand what it must show in its records to comply with the law should the CRA investigate. Continuous education regarding a charity’s obliga- tions is critical so that the administra- tion of the organization understands when to ask for reports of directors or others in whatever circumstances. Where must they be kept? The books and records of an organiza- tion must be kept, by law, at its regis- tered office address. This, however, is often an impossible task because the legal documents may be more easily kept at a lawyer’s office, accounting records may be with the accountant, and other records may be with the organiza- tion. It can be inconvenient and costly to keep all the records in one place – particularly if they are voluminous. The CRA seems to understand the prac- tical difficulties in this aspect and does not, as a matter of course, seek to con- firm the location of these records. During an audit, CRA auditors generally either ask for information to be provid- ed to them or meet at a mutually conve- nient location where the records are produced.
