Canada Business - Incorporation Canadian Companies

When incorporating a business in Canada, a company in Canada can be registered in each of the Canadian jurisdictions including federal, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Newfoundland, Prince Edward Island, Northwest Territories, Nunavut Territories and the Yukon Territory. Each jurisdiction will have a slightly different procedure, price and forms. In order to determine how to incorporate in a particular Canadian jurisdiction you must check the appropriate Corporate Registry for the province in which the business will be operating.

The basic principles of incorporating a business in Canada are as follows:

1) Choosing a Name

2) Obtaining a Nuan Name Search Report

3) Completing a form of Articles of Incorporation, a form of Notice of Directors and/or Notice of Registered Office

4) Setting Up Your Corporate Minute Book

5) Determining if you need to be extra-provincially registered

6) Maintaining Your Company's Records

Great consideration should be given to the name that you choose for your company. You must ensure this name is not similar, does not sound the same as or is remotely the same as any other corporation, business name, sole proprietorship, partnership or trade-mark registered in any of the provinces, territories or federally in Canada. It is not enough that the name is available. It can still be considered a conflict. Search houses are trained to determine whether a proposed name is available or could be a future conflict if used. With the exception of the federal jurisdiction, the governments will accept a name if it is available which may not be enough to determine whether the name could be a conflict in the future. If it turns out to be a conflict you may be forced to change the name which will be very costly regardless of the fact that your government allowed you to incorporate the name. Using a qualified search house to assist you with obtaining your name search report will cut down the chance of this happening since their are trained.

You should do a preliminary name search before ordering name search reports to incorporate in all jurisdictions in Canada. There are name granting guidelines for each jurisdiction and you will need to provide a name search report. The name search report allows the government to determine if your name is available prior to accepting your articles of incorporation. In order to ensure the proposed name is not rejected a preliminary name search should be performed.

There is no guarantee though that having a preliminary name search performed there still might be a confliction because sometimes not all relevant names will show up but it does narrow the possibility of rejection.

You will be required to provide a Name Search Report to incorporate or register in Canada. You should obtain your Nuans name search in advance since if you register online or in person, you will be required to provide the report number or a copy of the report as the case may be before you will be able to incorporate.

For Ontario articles of incorporation or if you are starting a business in Alberta, New Brunswick, Prince Edward Island and Federal jurisdictions you will be required to provide a Nuans Name Search Report. The other provinces have their own form of name search that you will be required to provide.

The federal government in particular will scrutinize your proposed name very closely before allowing your incorporation to go through. For this reason it is a good idea to obtain an advance Name Decision from the federal government before submitting articles of incorporation to incorporate federally in Canada. This service is not provided in any of the provinces and territories.

You would still do the preliminary name search to rule out any obvious conflicts and then a full Nuans name search report should be ordered. The report is submitted to the federal government and a Name Decision is requested.

If the federal government does not like the name you have choosen you will be required to provide a Nuans name search each time you pre-clear a name with them if you wish a second or third Name Search Decision. This could become costly. It is therefore a good idea to have someone with experience pre-clear the name before ordering a full federal Nuans Name Search. This is called a preliminary name search. An experienced search clerk will have better results at getting a Name Decision the first time round. Since incorporating federally is the cheapest you will more than likely save money even with the use of a search house to assist you.

If you do not wish to go through the procedure of obtaining an alpha name for your company you can register a numbered company which will have a name such as 9999999 Ontario Inc. or 9999999 Canada Ltd., and so on.

Each province, territory and the federal government will have its own form of articles of incorporation. Each government has a section on its website which outlines the requirements for incorporation and the forms to be completed. In most cases you can download these forms, fill them in and print them off. You will always be required to provide two fully originally executed copies of the forms. Frequently additional forms are required to be completed as well including a Notice of Directors and/or a Notice of Registered Office either at the time of incorporation or within so many days after incorporation. When you register online the government will request the registration number associated with the name search report you ordered.

You will be required to provide the name of the company, the registered office address (which is the address where government mail can be sent), the names of the directors and their addresses (these must be physical addresses where the directors can be located in person), the nature of business (which should in most cases be left blank to enable any business to be carried on), the share attributes (which in most cases would be an unlimited number of common shares), the attributes for the shares (which in most cases can be not applicable if only one class of shares is shown), the transfer restrictions (which should be upon approval of the directors and shareholders) and the special provisions (which provide that shares cannot be sold to the public and the number of shareholders will be less than 50).

Incorporations are governed by the business corporation statutes in the various jurisdictions. For instance in Ontario it is called the Business Corporations Act. In Ontario Section 105 of the statute provides that a director of a corporation (a) must be at least 18, (b) of sound mind, and (c) a person, (d) not bankrupt.

A certain number of the directors will need to be resident Canadians and each statute will have it own definition of what a resident Canadian is. Basically it is a person who lives in Canada, is a Canadian citizen or a Landed Immigrant. Therefore if the director is a Canadian and lives outside of Canada he or she would not be considered a resident Canadian and if all of your directors had that same classification then you would more than likely not be in compliance with the requirements.

When you incorporate the incorporation documents instructions might very well provide you with how many resident Canadians are required for a company in your province or territory.

This is the part that many small business owners do not bother to do and it is very important. Once you are incorporated you will need to appoint the officers, approve the form of share certificate, allot the shares to the shareholder and the shareholder has to pay for the shares, and elect the permanent directors. If you do not do this and you are the owner of the company and something happens to you, there will be no record of you being the shareholder and therefore the ownership of the company comes into question. As well, if you decide to sell your company down the road and you have no minute book, then you will have to pay to have one set up before you can sell and this will be much more costly than if you had done it in the first place. Your minute book can be a binder rather than an expensive minute book.

Federal companies will need to register in the province or territory where your company is situationed which is usually just a form. This let's the province or territory know that you are carrying on business in its province.

If you are a company incorporated in a province or territory you do not need to register extra-provincially in that province since your articles notify the government that you are there. However, you may wish to carry on business in another province as well. Maybe you are selling products across Canada. There are special criteria for considering whether you need to register and each province has an extra-provincial statute that outlines the requirements.

A company can carry on business under a name that is different than its own. For instance you can have a company name called Holly Incorporated and that company may register a business name called Holly Paralegal and another one called Holly Trucking Services, and so on. Frequently people will incorporate a numbered company and then register a business name such as "Joe's Dry Cleaning" under that name. You should do a business name registration search before you register the business name against the company.

For more information on Nuans name searches, business names, sole proprietorships and choosing a name go to www.canadianbusinessresources.ca