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- Select Corporate
Jurisdiction
- Select Corporate Names
- Determine Corporate Name
Availability
- Complete Articles of
Incorporation
- Submit & Register
Articles of Incorporation
- Purchase Corporate Seal
& Minute Book
- Complete Corporate By-Laws,
Organizational Minutes & Issue Shares
- Obtain
Other Permits & Licenses
- Set Up Bank Account
- Start Your Business!
While this list is
intended to describe the basic steps required to create a corporation, readers
should be aware that it is not exhaustive, and that certain steps may be
performed simultaneously. Highlighted links connect to the Glossary of
Terms in a new window.
In Canada, incorporators can choose to
incorporate in one of 13 provincial
and territorial jurisdictions or one federal jurisdiction of
incorporation. In most cases, the choice of jurisdiction is limited to
either the home province/territory of the incorporator or to federal
jurisdiction.
Federal (Canada)
corporations, are incorporated pursuant to the Canada
Business Corporations Act and have the constitutional right to carry on business
anywhere in Canada under their registered corporate name, subject to registration requirements in each province or
territory. Provincial corporations are incorporated pursuant to the
applicable provincial corporate statute, and only have the right to carry on
business within the province or territory of incorporation. (i.e. an
Ontario Corporation can only carry on business within the Province of
Ontario). Provincial corporations can however make an extra-provincial
registration to carry on business in another province or provinces (i.e. if an
Ontario corporation wants to set up offices in Alberta it could apply to the
Province of Alberta for registration as an extra-provincial corporation in
Alberta).
Another important difference between a federal and provincial corporation is the
scope of protection given to the name of the corporation. Incorporating
federally under the Canada Business Corporations Act
(CBCA), provides protection
for corporate names across Canada. Once a particular corporate name is
registered as a federal corporation, no one else may use that name or a
confusing name for their corporation anywhere in Canada. This federal corporate
name protection is
second only to trademark protection in terms of its scope and effectiveness for
protecting business names. Because of the scope of corporate name
protection provided under the CBCA, proposed corporate names are thoroughly
scrutinized by the federal Corporations Directorate according to strict
name
granting guidelines. As a result, many names that would be acceptable for
corporate registration provincially are rejected by the Corporations Directorate
as being too vague or non-descriptive of the business. Click here for more
information on the federal Name-Granting Guidelines.
Provincial incorporation provides corporate name protection only within the
province or territory of incorporation. As a result, if an individual
incorporates "123 Corporation" in Ontario another person could incorporate
"123
Corporation" in British Columbia at a later date. If you are only intending
on operating your corporation within one province or territory, this should not
be an issue for you to worry about. If you intend to incorporate
provincially and then register the corporation extra-provincially in another
province or territory at a later date, you may be disappointed to find out that
your corporate name, or a similar one, has already been registered in the other
province, and you will have to choose a new name for the other province.
The final difference between federal and
provincial corporations is the cost of incorporation. For federal
corporations, the federal Corporations Directorate currently charges a fee of
$250.00 to register the Articles of Incorporation ($200 if filed
electronically). For Ontario Corporations, the
Government of Ontario currently charges $360.00 for registration and
certification of Articles of Incorporation ($342.50 if filed electronically).
In deciding which jurisdiction in which to
register, prospective incorporators should ask themselves the following
questions:
- Where will the corporation carry on
business? In one or more provinces, or across Canada?
- Is federal name protection important for the
business? Will the corporate name be used in other provinces or
territories?
- Is the corporate name unique enough to
justify protecting it with federal incorporation?
- Will you decide to incorporate additional
companies in the future? If so, it is generally recommended to incorporate
these new companies in the same jurisdiction as the first corporation, so that
future corporate changes can be made cheaply and easily.
For a table listing the differences between Federal and Provincial
Corporations, click here.
For more information on using online legal services to
incorporate a Federal Corporation offered by the Virtual Law Office of Eric P.
Cohen, click here.
For more information on using online legal services to incorporate an Ontario
Corporation offered by the Virtual Law Office of Eric P. Cohen, click
here.
For more information on using online
incorporation services to incorporate a company in another jurisdiction offered by NBN
Business Services Inc., click
here.
Selecting a corporate name can be the most
frustrating part of incorporating a company. Although there are no
mandatory requirements to choose a particular name, each jurisdiction has its
own set of guidelines and requirements for proposed corporate name
approval.
As mentioned in the last section on jurisdiction, the
name
granting guidelines used by the federal Corporations Directorate are the most
stringent of any jurisdiction in Canada. In most cases, the federal Corporations
Directorate will require any proposed name to consist of a distinctive and
descriptive portion. The distinctive portion identifies the particular
corporation, while the descriptive portion identifies the particular activities
of the corporation. As a general rule, for federal corporations, if the
distinctive portion of the name consists solely of individual letters, or an
acronym, a minimum of four letters must be used. Many proposed corporate
names are rejected after much time, energy and money has been spent in
attempting to have them approved. As a result, it is advisable for all
federal incorporators to choose a minimum of three alternate names in advance,
so that if their first choices are rejected, they have an alternate names to
submit.
Corporate names can either be created by the
incorporator, or they can be the corporate number assigned to the corporation by
the incorporating jurisdiction (i.e. 123456 Ontario Inc.). A numbered
corporation is a good choice when a fast and relatively inexpensive
incorporation is required. In this situation, the corporation may be
created using a numbered name and Articles of Amendment may be filed later to
change the name. Alternatively, a numbered corporation may be used where
the incorporator will operate the business under another business name
registered to the corporation (i.e. 123456 Ontario Inc. doing business as
(d.b.a.) Fantasy Baseball Camp).
The following general rules apply to any
proposed corporate name:
- Under the laws of most jurisdictions, the
incorporator is responsible for ensuring that the chosen corporate name complies
with the applicable law in that jurisdiction
- Corporate names must generally not be the
same or similar to that of any other existing business name or trademark, if the use of the proposed name
would be likely to deceive the general public.
- Corporate names can be in either English,
French, in both English and French, or in a combined English and French form.
- Corporate names usually consist of a
distinctive element and a descriptive element.
- Corporate names must end with a legal element
consisting of one of the following:
| Limited (Ltd.) |
Incorporated (Inc.) |
Corporation (Corp.) |
| Limitée (Ltée.) |
Incorporée (Inc.) |
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Click here for more
information on the federal Name-Granting Guidelines.
Before submitting a proposed corporate name to
the government for approval, the name must be searched using the Newly Upgraded
Automated Name Search ("NUANS") system. A NUANS report must then
be submitted with the Articles of Incorporation (unless you are incorporating a
numbered company in which case a NUANS report is not required) to demonstrate
that there are no identical or deceptively similar names already registered in
the jurisdiction. A NUANS report consists of three pages of registered
trade names and two pages of trade marks similar to the proposed name.
Specific types of NUANS searches are completed
depending on the desired jurisdiction of incorporation. For federal
incorporation, a "Canada-biased" report is required. For an
Ontario incorporation, an Ontario report must be obtained. If it is likely
that in the future, a corporation will apply to carry on business in a
jurisdiction other than the jurisdiction of incorporation, it is recommended
that a NUANS report for that jurisdiction be obtained for the proposed corporate
name as well so that the incorporator has advanced knowledge of any potential
problems with the proposed name.
For federal corporations, the Corporations
Directorate offers a name pre-clearance service. If an incorporator is
unsure of the suitability of a particular name, he or she may forward a NUANS
report for that name to the Corporations Directorate in Ottawa in advance of
filing the Articles of Incorporation for a name decision. If the proposed
name is accepted, it is reserved while the Articles of
Incorporation are prepared (the name reservation lasts for a maximum of ninety
days). If the name is not accepted, the incorporator
has saved the time and effort of submitting useless Articles of Incorporation
and he or she can submit a new name or provide additional information to the
Corporations Directorate to allow it to accept the proposed name.
Click here to purchase a federally-biased NUANS
report with or without name pre-clearance service directly from NBN Business Services Inc.
online.
In most Canadian jurisdictions, business
corporations are created by filing articles of incorporation with the
appropriate government agency. Although incorporators are free to complete
and submit articles of incorporation without hiring a lawyer, it is advisable to
seek legal assistance because of the specialized legal nature of the
documents.
Before completing articles of incorporation, Incorporators will have to make
basic decisions about their corporation as follows:
- Where will the registered office be located?
- How many and what classes of shares will the
company be authorized to issue?
- Should there be restrictions on share
transfers to ensure that the corporation remains "private?"
- How many directors will be appointed?
Will there be a set number of directors or a minimum and maximum number?
- Should there be restrictions on the types of
activities or type of business that the corporation may conduct?
- Are there any other restrictions or clauses
that should be included in the articles?
Answers to the questions listed above vary
according to the specific requirements of each individual's situtation. As
a result, specific legal and/or tax advice should be obtained by the
incorporator prior to completing the articles of incorporation.
Once the articles of incorporation and supporting
documents are completed, they must be signed in duplicate by at least one
incorporator who is competent, at least 18 years of age and not bankrupt.
Incorporators may, but do not have to be directors or
shareholders of the
company after it is incorporated.
For more information on using online legal services to
incorporate a Federal Corporation offered by the Virtual Law Office of Eric P.
Cohen, click here.
For more information on using online legal services to incorporate an Ontario
Corporation offered by the Virtual Law Office of Eric P. Cohen, click
here.
For more information on using online
incorporation services to incorporate a company in another jurisdiction offered by NBN
Business Services Inc., click
here.
Articles of Incorporation and supporting
documents, including a NUANS report and filing fee must be filed with the
appropriate government agency before the corporation is created.
For federal corporations the Corporations
Directorate requires the following documents to be filed:
- 2 copies of Articles of Incorporation (Form
1)
- Notice of Registered Office (Form 3)
- Notice of Directors (Form 6)
- Federally-biased NUANS report
- Filing fee (currently $250 by cheque payable
to Receiver General for Canada)
Federal incorporation documents are to be
delivered to the following address:
Corporations Directorate
Industry Canada
9th Floor, Jean Edmonds Towers South
365 Laurier Avenue West
Ottawa, ON K1A 0C8
For Ontario corporations, the Companies Branch of
the Ministry of Government Services requires the following
documents to be filed:
- 2 copies of Articles of Incorporation (Form
1)
- NUANS report
- Consent of the Director (if a director named
in the Articles of Incorporation is not an incorporator) (Form 2)
- Filing Fee (Currently $360 by cheque payable
to Minister of Finance or credit card if registering in person)
Ontario incorporation documents can be delivered
by mail or registered in person at the following address:
Companies Branch
Ministry of Government Services
393 University Avenue
Toronto, ON M7A 2H6
For more information on using online legal services to
incorporate a Federal Corporation offered by the Virtual Law Office of Eric P.
Cohen, click here.
For more information on using online legal services to incorporate an Ontario
Corporation offered by the Virtual Law Office of Eric P. Cohen, click
here.
For more information on using online
incorporation services to incorporate a company in another jurisdiction offered by NBN
Business Services Inc., click
here.
All corporations are required by law to keep
certain corporate records including, but not limited to:
- a copy of the Articles of Incorporation
- all corporate by-laws
- minutes of shareholder meetings
- shareholder resolutions
- minutes of directors' meetings
- resolutions of directors
- directors register
- securities register
- share transfer register
- a copy of any forms filed with the government
- a copy of any unanimous shareholder agreement
All of these documents are usually kept in a
binder or case known as a corporate minute book. Although there is no
specific type of minute book required (incorporators can use a simple binder if
they choose), it is useful to have a professional minute book prepared and
updated each year to reflect the ongoing business of the corporation. A
professionally updated minute book allows for quick organized reference to
corporate documents, and is extremely important in a variety of corporate
transactions, such as the sale of the corporation to another shareholder (the
purchaser's lawyer will usually want to examine the corporate minute book in
advance of the sale to ensure that all legal requirements have been met by the
corporation).
A corporate seal is used to emboss the
corporation's name on legal documents. There is currently no legal
requirement for a corporate seal for either federal or Ontario corporations,
however, most corporations continue to seal certain legal documents to verify
their validity.
Click here to purchase a corporate minute book
and/or seal online from NBN Business Services Inc.
After the corporation has been created, its
structure must be organized. The organization of the corporation is documented
in written form and maintained in the corporate minute book. The initial
organization of the corporation is achieved by a meeting of directors or
shareholders of the corporation or by written resolutions signed by all
directors or shareholders. Included in this initial organization are the
following:
- approval of corporate by-laws
- issuance of shares to shareholders
- election of directors
- appointment of corporate officers
- other organizational resolutions
- shareholder agreements (optional)
After you have set up your corporation and are
maintaining it according to the legal requirements, you must turn your attention
to other legal requirements such as the following:
- Register for a federal Business Number (for all
corporations). The Business Number is used by the federal government to
identify businesses for a variety of accounts:
- federal corporate income taxes
- import/export account
- GST collection
- employer payroll source deductions
- Register any non-corporate business
names (business names other than the exact registered corporate name) used by
the corporation in the province in which the business operates. This is a
provincial legal requirement.
- Register for a provincial sales tax account (if
applicable)
- Register for provincial Employer Health Tax,
& Worker's Compensation
- Obtain any Provincial and/or municipal licenses
Remember that there are a variety of industry
specific laws and regulations that you must be aware of in order to operate your
corporation legally. Consult a competent lawyer in your province or
territory for specific legal advice, or click here to contact a Eric P. Cohen,
an Ontario lawyer.
In order to set up a corporate bank account, you will need to supply the bank
with a copy of your articles of incorporation and any articles of
amendment. All authorised signing officers of the corporation must sign on
to the account at the bank before they are permitted to sign cheques or access
the corporate account. The bank may also require certain corporate by-laws
or other resolutions to be passed before opening the account.
Now that all of the many legal requirements are
satisfied, you can concentrate on operating and growing your new business!!
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