Step by Step Guide to Incorporating in Canada
Select the company name for your Corporation
You must select the name of the corporation or you can opt for a numbered corporation.
- The corporation’s name must end with one of the following: Limitée, Limited, Incorporated, Incorporée, Corporation, Ltd., Societe par actions de regime fédéral, 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.
- You are not allowed to use a name which is either identical or deceptively similar to one that is already used by another corporation.
- Alternatively, a federal corporation may be assigned a number as its 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.
Select a Registered Office
You must select a Canadian registered office for your corporation.
- The registered office of a corporation is the location officially designated as such by the corporation for government department’s records. The registered office may be a commercial or residential address.
- The registered office is normally the main place of business of the corporation.
You must select who will be the shareholders of the corporation.
- 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
- Every private corporation must have at least 1 shareholder and there may be several (but not more than 50) shareholders.
Number of Shares
You must select the number of shares each shareholder will have.
- A corporation may issue as few or as many shares as it deems. 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.
You must decide who will be the 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 may be directors.
- A federal corporation requires that at least 25% of directors be Canada residents.
- Canadian resident director is required (not supplied). The province of New Brunswick accepts non-Canadian residents to incorporate a Canadian company.
- Directors may also be shareholders and officers of the corporation. This is normal in small corporations.
- You will need to know the following for each director: their complete residential address, whether they are Canadian residents and their profession.
You must decide who will be the officers of the corporation.
- Officers are the persons who hold certain senior management positions, such as President, Vice-President, Secretary and Treasurer.
- A corporation must appoint a President and a Secretary.
- Officers may hold more than one office or position. For example, an individual may be the President, Secretary and the Treasurer.
- Officers may also be directors and shareholders. In fact, this is typical in small corporations. There is no Canadian residency requirement for officers.
- You will need to know the following for each officer: their complete residential address and their profession.
You 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, you may change this date if you have specific reasons for doing so.
You may select the auditors or accountants 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.
Canadian – Business Numbers
The Business Number – BN is a 15 character number that identifies your business for tax purposes.
When you register with the Canada Revenue Agency (CRA), such as registering for the GST/HST or filing corporate income tax, you are given a Business Number.
The Business Number includes four common CRA accounts:
- Corporate income tax
- Payroll deductions
- Goods and services tax/harmonised sales tax – GST/HST
You will find the following documentation included with your company formation:
- Certificate of Incorporation, issued by the provincial government department, confirming the jurisdiction, date of incorporation and constituting statue of your corporation.
- A copy of your Articles of Incorporation and, where applicable, other constituting documents submitted to the government department or authority.
- Organisational minutes and resolutions of the corporation. Please review these and have the person sign their names where indicated. These minutes and resolutions will appear in the minute book.
- Personalised corporate share certificates for each shareholder with their name, class of shares and number of shares issued.
- By-laws of your corporation. By-laws are the basic rules that the corporation and its representatives must follow regarding the operations of the corporation and their dealings with directors, shareholders and third parties.
- A NUANS search report or provincial name search, as applicable, to confirm the availability of your selected name.
- A corporate minute book to keep all your corporate records. Keep the minute book in a secure place to allow for easy reference and recording of all future corporate transactions.