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Article Index
Incorporation in Canada
Choosing a Name
Incorporation Agreement
Registered Office
Shareholders
Directors and Officers
Resources
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Incorporating a business in Canada used to involve completing various paper forms and submitting them to a government office. Today the process is digital. It now involves filling-in and submitting applications online at provincial or federal registries. Before you do this, you need to make a number of decisions about the corporate name, shares and shareholders, your registered office, and more.

You do not have to do the filing process yourself. There are service companies which, for a fee, will do the actual online filing for you, but even then you will need to do most of the work yourself. And once you have done the preparation (which only you can do), why pay someone else to type the information into online forms? This article takes you through the steps.

We strongly recommend you read all the material in these pages before you start your incorporation process.

Where to Incorporate

For a typical Canadian business, the decision where to incorporate is simple: the province or territory in which the company will do business.

Federal incorporation makes little sense for a small business — it brings added paperwork and is best suited to companies which expect to have a physical presence in more than one province.

You may be tempted (depending on which province you live in) to do a federal incorporation because it is less expensive than doing an incorporation in your province. The reality is, your ongoing costs of paperwork for the federal corporation will be a lot more than the costs of maintaining your provincial corporation!

An on-line presence — selling or marketing via the Internet — is not a physical presence. Internet retailing start-ups really don′t need the added paperwork of federal incorporation if they will be operated from one province or territory.

You do not need a federal incorporation to do business with people in another province. What you do need to do is register with that province, that you are doing business there. A federal incorporation, with all the added annual paperwork it brings, really only makes sense when you are large enough to start establishing a physical presence in other provinces.


Choosing a Name

This task is often more difficult than it seems. Your business name will not be accepted if it is identical to one used by another company in Canada (if you are doing a federal incorporation), or in your jurisdiction (if you are incorporating in a province or territory).

Your business name may also be rejected if it is considered “deceptively similar” to one already used by another company or competitor — “Tom Horton's Coffee and Bagel Shoppe Inc.” would almost certainly fail (even if your birth name is Tom Horton) because it is too similar to Tim Hortons Inc., the iconic Canadian coffee shop chain.

Lawyers and business consultants have always recommended you should try to come up with a name that is both distinct and accurately describes your business. With huge numbers of new businesses being formed every year, that objective is more important than ever.

You may be tempted to use your personal name as the business name: John Smith Gift Baskets, Inc. That is probably fine if your business is local and you are well-known locally; your name as the business identifier may not be a great decision if you are not famous and your ambition is to do business province-wide, or even further afield.

Invented names, like Xerox, may be a tempting option, but it takes a lot of time and effort to reach a point where the public “recognizes” the name and knows what products or services are provided by the company. Indigo, the largest book retailer in Canada, recently spun-off a new company to sell e-books online. The company name, Kobo, is “book” with the letters shuffled and is “clever” but tells you nothing about the business. Indigo has the marketing clout and together with its partners in Kobo it has the financial resources to establish the name as a recognizable brand. You and I probably do not have those resources.

Concentrate on a name which helps identify what your business offers. John Smith Print Consulting Ltd is a lot more descriptive than John Smith Consulting Ltd.

Draw up a list of four or five names you think would be appropriate for your business, because when you start the incorporation process the initial step will be to get approval for the name.

Corporate Name Rules

You need to select the name of the corporation you wish to incorporate, or you may opt for a numbered corporation (such as 123456 Canada Inc. for a federal numbered company or 12345 Saskatchewan Inc. for a provincial corporation).

Provincial Name Rules

In Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Ontario, Prince Edward Island, and Saskatchewan, a corporation′s name must end with one of the following:

  • Limited
  • Limitée
  • Incorporated
  • Incorporée
  • Corporation
  • Ltd.
  • Ltée
  • Inc.
  • Corp.

and a corporation′s name may be in English or French or it may have a version in both languages.

A Quebec company′s name must end with one of the following:

  • compagnie
  • corporation
  • inc.
  • ltée.

and a Quebec company′s name must have a French version in addition to any other language (including English).

Nova Scotia has some different rules. If you wish to incorporate in Nova Scotia, you must first decide which of three types of company you want to incorporate:

  1. a Limited company by shares (limited liability company)
  2. a Limited company by Guarantee
  3. an Unlimited Liability Company

The first type of company (limited liability company) is what we think of in other provinces as a corporation. If you are interested in incorporating the second or the third kind of company in the list above, you should seek legal and accounting advice; these specialised forms of company are not covered here.

A Nova Scotia company′s name must end with one of the following,

  • Limited
  • Limitée
  • Incorporated
  • Incorporée
  • Ltd.
  • Ltée
  • Inc.

and may not have the words “Royal” or “Imperial” as part of its legal name. As in other provinces, Nova Scotia allows numbered companies and a company′s name may be in English, or French, or it may have a version in both languages.

Federal Name Rules

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.
  • S.A.R.F.

and a federal corporation's name must be in English or 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.

Number or Name?

Unless your decision is to use a numbered company, choosing your corporate name can be difficult, so allow yourself some time.

A federal or provincial corporation may be assigned a number as its legal name (for example, 123456 Inc.). If you elect to incorporate as a numbered company, the number is issued to you immediately and you can obtain the Articles of Incorporation. The numbered company may then register a trade name and make itself known to its customers as doing business under the trade name — the company may use its trade name for exterior signs, business cards, letterhead, and similar devices. However, the company must be identified by its actual name (i.e., the number followed by the provincial name, such as 123456 Manitoba Inc. or Ltd., or followed by Canada Inc. or Ltd. for federal incorporations) for all formal and legal matters and relations (for example, contracts).

If you wish to incorporate a named company, choosing that corporate name can take some time. You need to have a NUANS search done, to identify possible conflicts with the name you want to use. When a name is approved via the search, it will be reserved for you for a period of time — typically between 50 and 90 days — and this becomes the time within which you need to take the remaining steps to incorporate.

We provide links to service providers and information about those services in the Resources page at the end of this article.


Incorporation Agreement

Before you can incorporate your company, you need to prepare a simple incorporation agreement. This document needs to be signed by each incorporator (if you are the only person incorporating the company, only you need to sign). In a typical incorporation of a new company, the incorporator(s) are also the shareholder(s) and director(s) of the company after it is incorporated.

A typical incorporation agreement contains:

  • the agreement of each incorporator to take one or more shares of the company
  • the signature of each incorporator opposite their full name, together with the date each signed the document
  • the number of shares of each class being taken by each incorporator

Most provinces supply incorporation agreements you can use. Check the Resources links at the end of this article. The company will need to keep the agreement as part of the company′s records.


Registered Office

Your corporation′s registered office is the address of the corporation in its dealings with government departments and authorities. It is most often the principal place of business of the corporation (e.g. retail store, commercial office, manufacturing plant), but it does not have to be an “office” — it can be any of the places of business for the company. Your registered office may also be your accountant′s office or your lawyer′s office.

Your registered office must be within Canada (if you are incorporating a federal company), or within the province where the company is incorporated. The registered office may be a residential or commercial address, and may not be a post office box.


Shareholders

Every private corporation must have at least one shareholder. There may be more than one shareholder, but a private corporation may not have more than 50 shareholders.

The shareholder (or shareholders) of a corporation are in effect the owners of the corporation because of the votes that are usually attached to the shares.

Remember that the structure of a corporation is different from a sole proprietorship or partnership: while you (and your partner or partners) directly own a proprietorship or partnership and are personally responsible for the liabilities of the business, a corporation is a legal entity controlled by its shareholders; the corporation is responsible for its liabilities (unless a shareholder makes a personal guarantee).

If you wish, you may have just one shareholder, yourself, or you may have a number of shareholders. If one person controls a majority of the shares, that person controls the corporation. The shareholder(s) in a corporation elect the director(s), and the director(s) oversee the business of the corporation and appoint the officers (president, secretary, treasurer, etc) to manage its day-to-day affairs.

If you are the sole shareholder, you can elect yourself the sole director and then appoint yourself president. The effect of the corporate structure is to remove your personal liability from the corporation — your personal liability is limited to the cash and property you contributed to the company (usually in exchange for shares).

Once the company is properly incorporated, a creditor′s only recourse is to the assets of your company — a creditor cannot normally seek compensation via your personal assets. You should be aware however that there  have been recent cases in Canada where directors and officers have been found personally liable for the obligations of their company —typically, these cases have dealt with unpaid wages or environmental contamination.

There are few good reasons to issue a lot of shares in a new corporation, and lots of good reasons to keep the initial number of shares to a small number.

Classes of Shares

The shares issued in a corporation determine the rights of shareholders in the corporation. They determine whether the shareholder has:

  • the right to vote at shareholder meetings on issues affecting the corporation,
  • the right to receive a dividend when declared by the directors, and
  • the right to share in the distribution of the corporation's property when the corporation is dissolved.

When setting up your corporation, you need to decide if you want to have different classes of shares with different combinations of the above rights. The shares you issue become the “authorized capital" of the company.

When setting up a typical, small corporation with a small number of shareholders, the authorized capital is usually an unlimited number of shares of one class. These are called "common shares” and include all three rights described above.

If your ownership is more complicated and you wish to create and issue different classes of shares, you should seek legal and accounting advice before proceeding, as you will want to be certain that each class of shares accurately reflects the combination of rights you want them to carry.

Caution

Remember that whoever holds the shares of a corporation “owns” the corporation because the votes that are usually attached to the shares give the shareholders control of the corporation. If you plan to issue shares to attract key staff to the business, you will want to consider limiting the rights vested in those shares. For example, you might want the shares to only include the right to receive a dividend.

How Many Shares to Issue?

The first thing to know is, how many shares are issued when a company is formed is irrelevant. You could issue 10 shares, or 1,000 shares, or 10,000 shares.

Let′s assume you will be the sole shareholder in the corporation. A typical approach to incorporating this business would be to “issue and alot” (give you ownership of) 1,000 common shares in the company in exchange for your business assets. If no other shares are issued, your 1,000 shares are the issued capital of the corporation and you have total control of the affairs of the corporation. If there are two equal shareholders in this scenario, each would be issued 500 shares.

There is a potential problem with this approach. The theoretical value of the shares you issue when you incorporate is the value of the cash and property you contributed to the company (the authorized capital of the company). I describe this as theoretical because someone buying the company the day after you incorporate would not have much else on which to base the value of the business!

Let′s jump forward a few years. Your business has been wildly successful, is pulling in hefty profits, and you are looking for an investor or two to bring some fresh capital into the business so you can expand. You want to sell them some of your shares in return for their investment. The problem you now face is, because only a small number of initial shares were issued, shares in your very successful company are seriously expensive!

So it may be useful to issue a larger number of shares when you incorporate, rather than a smaller number. There is no “rule” for how many shares to issue at the time of incorporation, but my view is that (within reason) more is better than less.

You will need the complete residential address of each shareholder.


Directors and Officers

Every company must have at least one director, and there may be several. Only individuals (i.e., living persons) may be directors of a company. Directors do not need to be shareholders, but they can be. Directors administer the affairs of the company and make all major decisions for the company. In start-up companies the sole shareholder is often the sole director of the company.

As a general rule, directors of corporations in Canada must be 19 years old or older.

Officers of a company are appointed by the directors. Officers are the people who hold senior management positions, such as President, Vice-President, and Secretary and Treasurer. A company must appoint a President and a Secretary, but because officers may hold more than one position, it is common in start-ups for the president to also be the scretary and treasurer.

Residency

There are often Canadian residency requirements for corporate directors. Where you incorporate sets the requirements:

  • Federal: at least 25% must be residents of Canada
  • Alberta: at least 25% must be residents of Canada
  • British Columbia: does NOT require that directors be residents of Canada
  • Manitoba: a majority (51%) must be residents of Canada.
  • New Brunswick: does NOT require that directors be residents of Canada
  • Newfoundland and Labrador: a majority (51%) must be residents of Canada.
  • Nova Scotia: does NOT require that directors be residents of Canada
  • Nunavut: does NOT require that directors be residents of Canada
  • Northwest Territory: does NOT require that directors be residents of Canada
  • Ontario: a majority (51%) must be residents of Canada. If there are only two directors, then only one is required to be a Canadian resident.
  • Prince Edward Island: does NOT require that directors be residents of Canada
  • Quebec: does NOT require that directors be residents of Canada
  • Saskatchewan: a majority (51%) must be residents of Canada and at least one director must be a resident of Saskatchewan.
  • Yukon: does NOT require that directors be residents of Canada

You will need to know the following for each owner, director, and officer:

  • first and last name
  • date of birth
  • their complete residential address
  • telephone number
  • SIN
  • whether they are Canadian residents
  • their profession

Resources

Below are information and links to help you do your incorporation. Scroll down the page to find the province or territory in which you wish to incorporate.

Federal

Industry Canada publishes a Guide to Federal Incorporation (PDF, 60 pages). This is worth downloading for the examples it provides of completed federal Articles of Association and other forms you will be using.

Download and fill in a Corporate Name Information Form (PDF). This step is optional, but strongly recommended.

Obtain a "Canada-biased NUANS® report" for the corporate name you propose to use.

With the NUANS report, ask for a pre-approval of your proposed name at the Corporations Canada Online Filing Centre. Obtaining name pre-approval is safer than filing your entire application for incorporation and having it rejected because the name was not approved.

Note: the Province of Quebec does not currently provide data to NUANS®. For your own protection if you already do, or plan to do business in the Province of Quebec, you should search the Quebec corporations database at CIDREQ.

Once you have the NUANS report, you must file your incorporation papers within 90 days. You should prepare to file the following documents:

I suggest that you download and print those two forms and use the printed copies to pencil-in your information.

Finally, go to the Corporations Canada Online Filing Centre and if it is your first visit, register as a new user to access the Online Filing home page. From the menu, select "Articles of Incorporation," then choose one of the four incorporation options available. Follow the menus to complete the needed documents online, then pay the filing fee with a credit card.

Alberta

Obtain a NUANS Report to name your corporation. You must submit this report either to the Corporate Registry office or to an accredited service provider at the time of incorporation and the report must be less than 91 days old and contain all 6 pages when submitted. NUANS reports

The process for searching corporate names is carried out by private search houses in Alberta. You can locate these companies via this link.

You can find the necessary forms for incorporation here on the Service Alberta website.

Authorized service providers perform most Corporate Registry services in Alberta. You can find out about fees and services providers near you here on the Service Alberta website.

British Columbia

Corporate Registry forms are available online. I suggest you download these forms from that page:

  • Information on Reserving Your Corporate Name
  • Steps to Incorporating a Company in British Columbia
  • Appendix A
  • Appendix B

Print copies of those forms so you can pencil-in the content of the different fields in the forms, then use them as a reference for completing the online forms.

Conduct a search to reserve your company name. Go to Name Requests Online to submit your request electronically. There is a video demonstration and other online information to help you, and a fee is charged for the submission, with payment by credit card. Name Requests Online is available from 6 am to 10 pm Monday to Saturday (including statutory holidays) and from 1 pm to 10 pm on Sunday.

As an alternative, you can visit one of the 115 OneStop Business Registry service centers in BC. or one of the 60 Service BC centers.

When your company name is reserved, use that information and the forms you downloaded and prepared earlier, and go online to file your application for incorporation.

Manitoba

You will be incorporating a corporation with share capital (non-share corporations are non-profit).

Follow these instructions (PDF document).

New Brunswick

Obtain a name search report from a private sector name search firm. This report must be an Atlantic based NUANS search report. Find a NUANS member company in your area.

Within 90 days of receiving the name search report, apply online for incorporation at Service New Brunswick.

Newfoundland and Labrador

You will be incorporating a corporation with share capital (non-share corporations are non-profit).

At the time you file for incorporation the Registry of Companies checks for name availability within the province of Newfoundland and Labrador only. The province is not currently a member of the NUANS system and does not maintain a provincial database for NUANS searches.

The Government of Newfoundland and Labrador has an online search site for companies, but in January 2010 it persisted in requiring "Internet Explorer 6.x with 128-bit encryption" and this does not seem to have been updated since January 12, 2003. We have tested the link in January, 2010, with:

  • Internet Explorer 8 - Works
  • Mozilla Firefox 3.5 - Fails
  • Apple Safari 4.x - Fails
  • Google Chrome 3.x - Fails
  • Opera 10.10 - Fails

Based on our tests, it appears that you can not use the online search for companies in Newfoundland and Labrador unless you have a Microsoft Windows computer and are using Internet Explorer. Apple Macintosh, Apple iPhone, Linux, Solaris, and computers using other operating systems or web browsers will be unable to access the web service.

If you think you will be doing business outside the province, or want to establish a corporate name that will not lead to conflict in other parts of Canada, you may want to contact a NUANS registered member company who can search other provinces for you.

To apply for incorporation, you need to complete these forms (all links are to PDF forms which you can download, complete, and print):

Submit the completed forms to:

Registry of Companies
P.O. Box 8700 Confederation Building,
St. John's,
NL A1B 4J6
Phone: 729-3317
Fax: 729-0232

Nova Scotia

to come

Nunavut

Download the Corporate Registries Submissions Guide, a PDF document which describes how your incorporation application can be made.

Download the Corporate Registries Guide to Territorial Incorporation, a PDF kit which includes the forms you will need:

  • Name Search and Reservation request form
  • Form 1, Articles of Incorporation
  • Form 2, Notice of Registered Office
  • Form 4, Notice of Directors

The kit also contains instructions for how to complete and submit the forms.

For more information contact:

Legal Registries Division
Department of Justice
Government of Nunavut
P.O. Box 1000, Station 570
Iqaluit, NU X0A 0H0

Tel: 867-975-6590
Fax: 867-975-6594

Northwest Territories

Download these forms and instructions (all are in PDF format):

Prepare one copy of the name search request form and submit it to the Corporate Registries together with the fee of $25 payable to the Government of the Northwest Territories. If your proposed name is rejected you will have to submit a new name for searching. If your proposed name is accepted, it will be reserved for you for 90 days and you must complete your incorporation within that time, or you will have to start again with a name search.

After your name is accepted. complete the Articles of Incorporation. Also prepare TWO copies each of the Notice of Registered Office and Notice of Directors. Sign each copy of each form (photocopied signatures will not be accepted).

Submit the forms to the Corporate Registries together with the fee of $300, payable to the Government of the Northwest Territories.

For more information contact:

Corporate Registries
Department of Justice
Government of the Northwest Territories
PO Box 1320
Yellowknife NT X1A 2L9

or

Department of Justice
Government of the Northwest Territories
1st Floor, Stuart M. Hodgson Building
5009-49th Street
Yellowknife, NWT X1A 2L9

Tel: (867) 920-8987
Toll Free: (877) 743-3302
Fax: (867) 873-0243
Website

Ontario

Do a Name Search search to get a business name report (unless you're incorporating as a numbered company). OnCorp Direct Inc. in Ontario offers search services.

Fill out and file articles of incorporation with the Ministry of Government Services within 90 days of obtaining the Name Search report. A quick way to do this is via OnCorp's services, which provide a pre-defined set of standard Articles of Incorporation, requiring you to only fill in information like names and addresses.

Complete and submit an Initial Return to the Companies and Personal Property Security Branch within 60 days after the date of incorporation. Download a PDF form, complete it and print it, then mail it to:

Ministry of Government Services
Companies and Personal Property Security Branch
393 University Avenue, Suite 200
Toronto ON M5G 2M2

Prince Edward Island

A corporation wishing to register a trade name is required to have the Consumer, Corporate & Insurance Services Division conduct a computerized name search of the proposed name prior to registration. The search fee is $40.00. Contact them at:

Fourth Floor, Shaw Building
95 Rochford Street
PO Box 2000
Charlottetown, PE
C1A 7N8
Telephone: (902) 368-4550
Facsimile: (902) 368-5283

You can search the Prince Edward Island Corporate/Business Names Registry on the Internet.

If a business name is used by a corporation, a declaration of this in writing must be filed with the Consumer, Corporate & Insurance Services Division (address above). An officer authorized by the corporation must complete the declaration on behalf of the corporation. The registration cost is $65.00.

Government incorporation forms are available online. Scroll down the page to the heading Office of the Attorney General, where you will find the forms.

Saskatchewan

New business corporations are required to do a Saskatchewan Plus search. Information and tools to do this can be found on the website of the Justice and Attorney General.

The same website has a downloadable Business Corporations Act Kit that contains a copy of the forms required to incorporate.

Send your completed incorporation forms in duplicate with the required fees to:

Saskatchewan Justice
Corporations Branch
2nd Floor, 1871 Smith Street
Regina, Saskatchewan.
S4P 4W5

Yukon

Government incorporation forms are available online.

Obtain a NUANS Report to name your corporation. You must submit this report either to the Corporate Affairs office at the time of incorporation and the report must be less than 91 days old and contain all 6 pages when submitted.

The process for searching corporate names is carried out by private search houses. You can locate these companies via this link.

Corporate Affairs can also help you with the name search. You can contact them (8:30am to 5:00pm) here:

Phone: (867) 667-5314
Toll free (in Yukon): 1-800-661-0408 local 5314
Fax: (867) 393-6251
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Third Floor, Law Centre
2130 Second Avenue
Whitehorse
About starting-successful-canada-large This document is an expansion of the chapter on starting your new business in the Starting a Successful Business in Canada Kit, 18th edition, by Jack D. James, MBA, LLB.

Read more about the book, view the table of contents, read a sample chapter, and buy your copy here.
 

After Incorporation

Don't forget after incorporating your new company that you should register for whatever other licenses, registrations, or certifications you require to legally operate your business. Such registrations may include local (municipal) as well as provincial and federal requirements.

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