Jurisdiction of incorporation.
If national presence or business name recognition throughout the country is required consider a federal corporation.
Legal elements that identify a corporation are “LTD”, “LIMITED”, “LIMITEE”, “LTEE”, “INCORPORATED”, “INC”, “CORPORATION” AND “CORP”. Corporation name must be followed by one of these identifiers.
NUANS
New updated automated name search.
NUANS search is a requirement of OBCA and CBCA.
Industry Canada in Ottawa maintains a database for names.
In Ontario a NUANS report will Cost about $25 and a federal Nuans report will cost about $35.
Articles of incorporation must accompany a NUANS report to confirm that a name is not duplicated.
Following are two important links about NUANS:
www.readsearch.com/nuans.tutorial
The second link helps you prescreen your Ontario business name and order your official Ontario NUANS reservation report to incorporate your business.
Numbered Companies
A numbered company may be used for many reasons.
If someone wants a name that is identical to already registered business and a clear NUANS report is not possible, one can use a numbered company.
If someone cannot wait for NUANS report.
Following is an example of a numbered company name:
1234567 Ontario Inc.
Clients can trade mark their business name with or without a logo.
If a corporation in Ontario (or its branch or division) wants to carry a business under a name other than the registered corporation name, it must register this business name under the business names act using form 2.
Link to form 2 http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/FormDetail?openform&ENV=WWE&NO=007-07197
Directors
Every corporation must have one or more directors to manage its affairs.
Directors must be individuals 18 or older who are not undischarged bankrupts or held by court to be of unsound mind.
Majority of the directors of every Ontario Corporation that is not a nonresident corporation must be resident Canadians.
The term “ordinary resident” comes from the income tax Act and refers to individuals who treat Canada as their home and reside there for at least half of each year.
A landed immigrant who is ordinarily resident in Canada may be a director, such a person cannot be a director if he or she has been ordinarily resident for more than one year from the time he or she first became eligible to apply for Canadian citizenship.
First Directors
First directors of a corporation are named in the articles of incorporation.
They hold office from the moment of incorporation until at least the first meeting of shareholders.
The powers and responsibilities of the first directors are the same as those of any other director.
First directors cannot resign their position until their resignation is approved by the shareholders and replacement directors have been elected.
The articles of incorporation for federal corporations do not name the directors, but a notice of directors (form 6) must be filed with the articles.
For Ontario corporations form 1 must be filed with ministry within 60 days of incorporation.
Link to form 1
http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/FormDetail?openform&ENV=WWE&NO=007-07200
Shelf Corporations
Law firms often have shelf corporations on hand for clients who need a corporation immediately and cannot afford to wait for a new corporation to be incorporated.
This type of corporation stays dormant till transferred.
Non-offering Corporations
These types of corporations are also known as private or closely held corporations and they do not sell their shares on the stock market and they provide an important tax advantage.
Canadian controlled private corporations (CCPC) are entitled to claim a small business deduction on active business income (ABI) earned in Canada.
The current federal limit is $500,000 and federal tax rate is 11%.
Active business income does not include investment in stocks, bonds and rental income.
A CCPC must be controlled by resident Canadians, which means at least 51% of the voting shares are owned by resident Canadians.
Registered Office
A corporation must keep its books and records at the registered office.
Registered office cannot be a post office address.
Disclaimer:
This information is for educational purposes only. It does not constitute any legal advice or opinion. Please do not use any of its contents without seeking a professional advice.
References:
The fundamentals of corporate law and procedure
By Mark Walma and Patricia McCann – Smith
Publisher: Edmond Montogomery Publications Limited, Toronto, Canada.