INCORPORATION OF COMPANY
Corporations in Canada can be incorporated under either the federal Canada Business Corporations Act or under the equivalent provincial or territorial legislation. Both federal and provincial corporations can be privately held corporations or can be publicly held corporations. Public corporations are governed by the applicable provincial securities legislation. While a corporation can be considered a public corporation once it meets certain criteria and will in turn be required to adhere to securities legislation.
Incorporation under a provincial jurisdiction will entitle a corporation to operate within that particular province, with additional registrations required for each subsequent province the corporation is carrying on business in. A provincially registered corporation will obtain the exclusive right to use its registered business name within the province of incorporation, however they will be required to register the business name in all other provinces they are carrying on business in provided that such name is available, subject to the registered or unregistered trademark and trade-name rights of others. A screening process exists to ensure that business names are not too general or misleading with names being pre-cleared for use prior to incorporation.
Incorporation procedures for both federal and provincial corporations are generally with the filing of the articles and by-laws of the corporation with the applicable corporate registry office and can generally be completed within a day provided that the corporation's name has been approved. Provincial and federal incorporation filing fees are moderate, however the filing fees associated with the incorporation of a Nova Scotia ULC have recently increased to $6000.00 CDN.
Name of the corporation
A federal corporation's name must end with one of the following: Limited, Limitée, Incorporated, Incorporée, Corporation, Societe par actions de regime fédéral, Ltd., Ltée, Inc., Corp. or S.A.R.F.
A federal corporation's name must be in English, French or it may have a version in both languages. If you are conducting your principal business operations in Quebec, it is preferable to select a French name in addition to any English name.
Choosing a corporate name can be a difficult task. To increase the chances of your proposed name being accepted, try to select a name that is as distinct as possible, yet accurately describes your business. If your proposed corporate name uses common or popular names, the chances of it being accepted decrease. Furthermore, you may not be allowed to use a name which is either identical or deceptively similar to one that is already used by another corporation or competitor in your jurisdiction.
Alternatively, a federal corporation may be assigned a number as its legal name. This speeds up the incorporating process and permits immediate delivery of the Articles of Incorporation. The corporation may then register a trade name and be known to its customers as doing business under the trade name. Although the corporation must be identified by its actual name (i.e., the number followed by Canada Inc. or Ltd.) for all formal and legal matters and relations (e.g., contracts), the corporation may use its trade name for exterior signs, business cards, letterhead, etc.
The Director may, on request, reserve for ninety days a name for an intended corporation or for a corporation about to change its name. If requested to do so by the incorporators or a corporation, the Director shall assign to the corporation as its name a designating number followed by the word "Canada" and a word or expression, or the corresponding abbreviation
JURISDICTION TYPE OF REPORT COST DELIVERY
||$25 2 hours|
|Federal - expedited NUANS
||$35 10 minutes|
||$25 2 hours|
|British Columbia Provincial
||$60 48 hours|
||$60 48 hours|
||$80 5 business days|
|New Brunswick NUANS
||$25 2 hours|
|Nova Scotia NUANS
||$25 2 hours|
||$25 2 hours|
||$25 2 hours|
||$70 5 business days |
||$80 3 business days|
The registered office of a corporation is the location officially designated as such by the corporation to the relevant government department or authority. The registered office may be a commercial or residential address, but should not be a post office box. You will need the complete address.
The registered office is typically the principal place of business of the corporation (e.g., store, plant or office) and does not have to actually be an "office". If the corporation will have more than one place of business, you may select any of the places of business.
A corporation may issue as few or as many shares as it deems desirable. The crucial matter is the proportion of shares that is initially issued to each shareholder, rather than the actual number. Nonetheless, it may be advantageous to issue a larger amount of shares. It may facilitate selling a portion of these shares at a later date since each share will have a lower value. Also, subsequent share issues from the corporation may be more attractive to investors since the value of the shares would be lower given the larger number of shares that were already issued.
It is not uncommon for the total amount of shares issued to all initial shareholders to equal 1000 shares. However, you may decide to increase or decrease this amount.
Shareholders are the person(s) who hold (i.e., own) the shares in the corporation. Whoever holds the shares of a corporation essentially "owns" the corporation. By reason of the votes that are usually attached to the shares, the shareholders control the corporation.
Every private corporation must have at least 1 shareholder and there may be several (but not more than 50) shareholders.
Directors of the corporation
Directors are the individuals who administer the affairs of the corporation and make all major decisions for the corporation. Every corporation must have at least 1 director, and there may be several. Only individuals (i.e., physical persons) may be directors of a corporation.
A federal corporation requires that at least 25% of directors be Canada residents. Directors may also be shareholders and officers (see below) of the corporation. A director must be:
at least 18 years old
- of sound mind (mentally competent)
- an individual (a corporation cannot be a director)
not in a status of bankrupt.
Officers of the corporation.
Officers are the persons who hold certain senior management positions, such as President, Vice-President, Secretary and Treasurer, among others. A corporation must appoint a President and a Secretary. Officers may hold more than one office or position. Officers may also be directors and shareholders of the corporation. In fact, this is typical in small corporations. There is no Canadian residency requirement for officers. It is required to know for each officer their complete residential address and their profession.
One must select the fiscal year-end of the corporation
A fiscal year is any 12-month period used by a corporation as its official accounting period. A fiscal year-end is the official last day of the fiscal year of a corporation. The fiscal year-end does not need to be December 31, but is typically the last day of the chosen month.
It is not uncommon for corporations to select December 31 as their fiscal year-end. However, one may change this date if he has specific reasons for doing so.
One may select the auditors or accountants of the corporation. If you do not, you may still incorporate.
Auditors are the professionals who check the accuracy, fairness and general acceptability of a corporation's accounting records and attests to them. A corporation must generally appoint an auditor to prepare the annual financial statements of the corporation. The auditor should be a chartered accountant and cannot be a director or officer of the corporation. Alternatively, you may appoint accountants to prepare the financial statements of the corporation but who will not act as auditors of the corporation.
Shareholders of a private corporation may choose not to appoint an auditor for any given fiscal year. All the shareholders must agree to this decision. This decision remains valid only until the next annual meeting, where all the shareholders of the corporation must once again consent to not appointing an auditor for the following fiscal year.
GOVERNMENT INCORPORATION FEES
Federal corporations have a government incorporation fee of $200. Named corporations also require an additional search report at a cost of $30.
Federal corporations must also pay the relevant provincial registration fees below:
||Provincial Government Fees|
|Prince Edward Island
The completed documents and fees payable to the Receiver General for Canada are to be sent to:
The Director, Canada Business Corporations Act
Jean Edmonds Tower, South
365 Laurier Ave. West
Ottawa, OntarioK1A 0C8