This article outlines the general steps for incorporation in Canada, explaining how to incorporate your business, from choosing where to incorporate your business through receiving your certificate of incorporation. Note that the specifics of each step for incorporating your business may differ from province to province.
1. Decide whether youre going to incorporate federally or provincially.
When you incorporate your business federally, the two advantages are:
- your corporation will be able to carry on business in all provinces and territories (as long as you register your corporation in all the provinces you will be conducting business in)
- and your corporation will be able to use the same name in each province or territory, even if another company is already doing business under a similar name.
The disadvantages of federal incorporation are:
- Federal incorporation cost more to set up;
- Theres a lot more annual paperwork, as you must keep up to date with not only the filings required by the federal Director of Corporations Branch but all filings required by the provinces.
If you incorporate provincially, your corporation only has the right to carry on business in the province or territory where your business is incorporated.
The decision to incorporate federally or provincially depends more on the scope of your company than anything else. If you are setting up a one person or small non-reporting corporation, planning to do business in one province for now, and maybe another one or two later, there's probably no need to incorporate federally. You can always incorporate your business in another province (called extra-provincial incorporation) as your business expands.
2. Choose a corporate name.
Selecting a corporate name is more difficult than choosing a name for a sole proprietorship or partnership, because there are more stringent name requirements when you incorporate your business. Generally, a corporate name is composed of three elements;
- a distinctive portion that identifies the particular corporation;
- a descriptive portion that identifies the particular activities of the corporation;
- and a legal element, identifying the company as a corporation, such as Limited, Incorporated, or Corporation.
Note that corporate names in Canada can be in English or French, in both English and French, or in a combined English French version.
But the procedure is complicated by the fact that the Registrar (of the provincial Registry or federal Corporations Directorate) will demand a corporate name that is not identical to or similar to any other existing company names.
3. Have your corporate name searched and reserved.
No matter where you incorporate your business in Canada, you will need to have a name search done to determine the suitability of the corporate name you have chosen.
In other provinces, such as B.C. and Nova Scotia, you must have a name search done once youve submitted a Name Approval Request or Name Reservation Request Form. If the results of the search are acceptable, and your name is accepted, it is then reserved for a set number of days during which you must complete the incorporation process for your business or restart the procedure all over again.
For details of the name search and name reservation process in different provinces, see my Incorporation in Canada library.
4. Prepare your incorporation documents, such as the Articles of Incorporation.
Generally, to incorporate your business, you will need to prepare the following incorporation documents:
- The Memorandum sets out the rules for the conduct of the company.
- The Articles of Incorporation the rules and regulations that will govern the conduct of the company members and directors.
- The Notice of Offices states the location of the two required offices for your corporation, the registered office and the records office.
If you are incorporating federally, you will also need to prepare a Notice of Directors (and submit a federally-biased NUANS report). If you are filing provincially, be sure you check the document requirements for your specific province before you proceed to the next step.
5. File your incorporation documents and apply for incorporation.
The federal Corporations Directorate and many of the provincial registries now have web sites where you can incorporate your business online. You may also submit your application for incorporation the old-fashioned way by mailing the incorporation forms and fees to the appropriate registrar. Here are links to the contact information for federal incorporation and many of the provincial corporate registries.
For information on what to do once you have successfully registered your new corporation and have received your certificate of incorporation, see Getting Your New Corporation Up and Running.