Would an organization otherwise qualifying under s. 149(1)(l) lose its exempt status because of a clause in its articles providing that in the event of it winding-up, dissolution, or merger, all property must be transferred to a municipal authority within the meaning of paragraph 149(1)(c)? CRA responded:
Where a municipal authority is a member of an entity referred to in paragraph 149(1)(l), the latter would lose its tax-exempt status by reason of the clause in its enabling documents that provided that in the event of a winding-up, merger or dissolution, all its assets and accumulated income must be transferred to the municipal authority as described in paragraph 149(1)(c). There would be loss of entitlement to the exemption under paragraph 149(1)(l) since the condition, that no part of the income can be payable to, or otherwise made available for, the personal benefit of any member of the association, would not be satisfied.
However, the member-benefit rule would not be breached if the municipal authority was not a member.