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If you’re forming a company with a small group of shareholders, a private company can be a good option. Learn the legal issues and steps involved in incorporating a private company.
==What you should know==


This script discusses incorporating and maintaining a company.
===You have options on how to structure a new business===
You have options on how to structure a new business. You could use a sole proprietorship, form a partnership, or incorporate a company. For an explanation of the pros and cons of each approach, see our information on [https://dialalaw.peopleslawschool.ca/starting-a-small-business/ starting a small business].


==There are different ways to form a business, other than a company==
Before incorporating, you may also want to get advice from a lawyer and an accountant. They can help you decide the best way to set up the company’s authorized share structure (called the capital structure, and explained below), and how to structure the company for optimal tax planning.
To learn more on whether you want to incorporate a company, refer to Script [[Starting a Small Business (Script 265)|265]] on “Starting a Small Business”.  Also, before incorporating, you may want to seek advice from a lawyer and an accountant. They can help you decide the best way to set up the company’s “authorized share structure” (explained later) and structure the company for optimal tax planning.


==There are basically two types of companies==
===There are two types of companies===
Under BC’s ''Business Corporations Act'', these are:
[https://www.canlii.org/en/bc/laws/stat/sbc-2002-c-57/latest/sbc-2002-c-57.html Under BC’s ''Business Corporations Act''], there are public companies and private companies.
*a public company
*a private company


A public company has its shares listed and traded on a stock exchange. A private company is typically a small company with very few shareholders, and its shares aren’t offered for sale to the public. This script only applies to private BC companies.
A '''public company''' has its shares listed and traded on a stock exchange and must follow securities laws.


All private BC companies are incorporated online
A '''private company''' is typically a small company with very few shareholders (sometimes called a '''closed corporation'''). Its shares aren’t offered for sale to the public.
Use the Corporate Online services found at [http://www.corporateonline.gov.bc.ca www.corporateonline.gov.bc.ca]. You can use a credit card to pay for the fees.


==Decide on a name for your company==
This information deals with private companies in BC.
The name must end in “Limited,” “Ltd.,” “Inc.,” “Incorporated,” “Corp.” or “Corporation,” or the French equivalent to these words. Your new company name needs to be distinctive and have a descriptive element, or you can choose a numbered BC company name. The Corporate Registry has more information on choosing a name – seewww.bcregistryservices.gov.bc.ca and click on the “B.C. Companies” link. Note that if you decide to carry on business under a trade name, you have to display the full legal name of your company on certain documents like contracts and invoices.


==You must then reserve the name with the Corporate Registry==
===All private BC companies are incorporated online===
The easiest way is to reserve online at [http://www.corporateonline.gov.bc.ca www.corporateonline.gov.bc.ca]. If the name you want to use is available, it will be reserved for 56 days.
You can use the BC Registry Services’ [https://www.corporateonline.gov.bc.ca/ Corporate Online] to incorporate a company. You can pay the fees by credit card.


==Decide who is going to be involved in your company==
Consider consulting a lawyer and accountant before incorporating a new BC company, as the standard '''articles''' (the set of rules that govern the company) and the authorized share structure provided through a basic online incorporation are simplistic and may not properly meet your needs.
The shareholders are the owners of the company. The directors have the responsibility and control of the company. They may appoint officers, such as a president or secretary. Typically, the officers handle the day-to-day operations of the company and are overseen by the directors. You can have a one-person company and be the sole shareholder, director and officer.


==Are there any requirements for directors?==
===Incorporating a federal company===
Yes. Some of the requirements are:
You can incorporate a '''federal company''' [https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-c-44/latest/rsc-1985-c-c-44.html under the ''Canada Business Corporations Act'']. A federally incorporated company has the right to carry on business anywhere in the country and will have its name protected across Canada. But a federal incorporation usually takes more time, and the corporation is often more expensive to operate than a BC company.
*A private company must have at least one director.
*A director doesn’t have to live in BC or Canada, but they do have to consent in writing to act as a director.  
*A director must provide the Corporate Registry with an address where they can receive documents during standard business hours. If there’s no such office, then the Registry requires the director’s home address.
*A director must be at least 18 years old and cannot have certain criminal convictions, be a bankrupt person (who hasn’t yet been granted formal discharge from bankruptcy) or have been found by a court to be incapable of managing own affairs.


==The company must have a registered and records office==
===BC companies can carry on business in other provinces===
The registered office for your company is where legal documents can be delivered. The records office is the address where all records for the company are kept. The registered and records offices must be in British Columbia and may be at the same address.
A private BC company can carry on business in other provinces if it registers itself extra-provincially in those provinces. But unlike a federally incorporated company, an extra-provincially registered BC company may have its application to register its name in another province refused by the Registrar of that other province.  


Every company must also have both a mailing address and a delivery address for its registered and records offices. The registered office mailing address is where the company will receive its mail. The registered office delivery address is where the company is given any notices like legal documents. The registered office mailing address may be a post office box, but the registered office delivery address must be a street address that’s accessible to the public during business hours.
==Form the company==


==You need to decide on an “authorized share structure”==
===Step 1. Decide on a name for the company===
The number of shares your company is authorized to issue to its shareholders is called the authorized share structure. This can be a limited number of shares or an unlimited number.
The name must end in “Limited”, “Ltd.”, “Inc.”, “Incorporated”, “Corp.” or “Corporation”, or the French equivalent to these words. Your new company name needs to be distinctive and have a descriptive element, or you can choose (or be assigned) a numbered BC company name. The [https://www2.gov.bc.ca/gov/content/governments/organizational-structure/ministries-organizations/ministries/citizens-services/bc-registries-online-services Corporate Registry] has more information on choosing a name.


There are two main kinds of shares: par value shares and shares without par value. Par value shares have a minimum price at which they must be sold. Shares without par value don’t have a minimum price. You can also have different classes of shares with different attributes and rights, such as common shares and preferred shares, voting rights, the right to receive dividends, as well as different series of shares within a class of shares. The specifics can be complicated, so professional guidance from your lawyer or accountant is recommended.
If you decide to carry on business under a trade name (called a DBA or a doing-business-as name), you must still display the full legal name of your company on certain documents like contracts and invoices.


==To incorporate a company, certain incorporation documents must be prepared==
===Step 2. Reserve the company name===  
These include:
The easiest way to reserve the company name with the Corporate Registry is using [https://www.corporateonline.gov.bc.ca/ Corporate Online]. If the name you want is available, it will be reserved for 56 days.
*an Incorporation Agreement
*the Incorporation Application
*the Articles
*your Notice of Articles


==What is the Incorporation Agreement?==
===Step 3. Decide who will be involved in the company===
This is an agreement between the incorporator (or incorporators) and the company. It describes the number, kind and class of shares each incorporator agrees to take once the company is incorporated. The incorporator must agree to take at least one share of the company and therefore become the company’s first shareholder. The Incorporation Agreement must be signed by the incorporator before submitting the Incorporation Application to the Corporate Registry. You don’t submit the Incorporation Agreement itself to the Corporate Registry, but a signed original should be placed in the company’s records book.  
The '''shareholders''' own the company and vote to appoint the '''directors'''. The directors control and govern the company and oversee how it is run. They may appoint '''officers''', such as a president, secretary and senior management. Typically, the officers handle the daily operations of the company and are overseen by the directors.


==The Incorporation Application is a document available through Corporate Online==
====One-person company====
The person who completes the Incorporation Application is called the Completing Party. The Completing Party must ensure that the Incorporation Agreement and Articles are properly prepared and signed by the Incorporator.  
You can have a one-person company and be the sole shareholder, director and officer. In BC, unlike in other provinces, there is no requirement to have a BC resident director. There are [https://www.canlii.org/en/bc/laws/stat/sbc-2002-c-57/latest/sbc-2002-c-57.html#sec124_smooth other restrictions under the law] on who can be a director of a BC company.


==The Articles are the rules and regulations for the conduct of your company==
====Shareholders====
You can use the sample set in the Business Corporations Act or have them specially drafted to suit your needs. The Incorporator must sign the Articles of the company. You don’t need to submit the Articles to the Corporate Registry, but you should file a copy in the company’s records book.
Consider carefully who the shareholders of your company should be. Even minority shareholders have considerable rights that can affect how a company is run. Shareholder disputes can be destructive. Removing an unhappy shareholder from a company can be very expensive, time-consuming and hard.


==What is the Notice of Articles?==
Sometimes, it is best if investors in a new company are just creditors who lend the company money, and not also owners. Or, you can see how a person works as an independent consultant before hiring them as an employee or making them a shareholder. You can see how they get along with the existing shareholders and how they will fit in the company in the long term.
The Notice of Articles is a document that contains the following information:
*the company’s name
*the authorized share structure
*whether or not there are special rights and restrictions attached to the shares
*the addresses of the registered and records offices
*the names and residential or business addresses of the directors


==How do you submit the incorporation documents to the Corporate Registry?==
There is no requirement for shareholders of BC companies to be BC or Canadian residents.
You must “e-file” or electronically submit your Incorporation Application and attached Notice of Articles to the Corporate Registry, along with the prescribed fee, through Corporate Online. Your company will then be incorporated almost instantly. If you prefer, for an additional fee, you can specify a date and time up to ten days in future for the incorporation of the company.


When you e-file, you’ll have to set up a password (and specify a hint to help you remember the password) for your company so you can submit forms in the future usingwww.corporateonline.gov.bc.ca. After you e-file, the Corporate Registry will issue a Certificate of Incorporation and send you “certified” or true copies of the Incorporation Application and Notice of Articles.
====Directors====
[https://www.canlii.org/en/bc/laws/stat/sbc-2002-c-57/latest/sbc-2002-c-57.html#sec120_smooth Part 5 of the Business Corporations Act] deals with directors.
* A private company must have at least one director.
* A director doesn’t have to live in BC or Canada, but they do have to consent in writing to act as a director.
* A director must provide the Corporate Registry with an address where they can receive documents during standard business hours. If there’s no such office, then the Registry requires the director’s home address.
* A director must be at least 18 years old and cannot have certain criminal convictions, be a bankrupt person (who hasn’t yet been granted formal discharge from bankruptcy) or have been found by a court to be incapable of managing their own affairs.
===Step 4. Pick a registered and records office===
A company must have a '''registered and records office'''. The registered office is where legal documents can be delivered to the company. The records office is the address where all records for the company are kept. The registered and records offices must be in British Columbia and may be at the same address.


==After incorporating your company, it must be organized==
Every company must also have both a mailing address and a delivery address for its registered and records offices. The registered office mailing address is where the company will receive its mail. The registered office delivery address is where the company is given any notices like legal documents. The registered office mailing address may be a post office box, but the registered office delivery address must be a street address accessible to the public during business hours.
This includes preparing the company’s records book, preparing director and shareholder resolutions, issuing shares, and preparing a directors’ register plus a “central securities register” or share register. You may wish to talk to a lawyer about this. Maintaining a well-organized corporate record book and set of financial statements will help you get a better price when you sell your company and if the Canada Revenue Agency (CRA) decides to audit your company.


==How do you maintain your company?==
===Step 5. Decide on an authorized share structure===
Certain steps must be taken to keep your company alive. Your company must file an annual report with the Corporate Registry each year within two months of its anniversary date of incorporation. Failure to file an annual report for two consecutive years can result in the company being dissolved. Also, if the company changes its registered or records office, or if the directors resign or change their address, the company must e-file other forms with the Corporate Registry. There are fees associated with most of these filings. As well, each year, every BC company must choose to either appoint an auditor or waive the appointing of an auditor.
The number of shares a company is authorized to issue to its shareholders is called the '''authorized share structure'''. This number can be limited or unlimited. You have to decide the type and number.


==What about incorporating a federal company?==
There are two main kinds of shares: par value shares and shares without par value. '''Par value shares''' have a minimum price they can be sold for. '''Shares without par value''' don’t have a minimum price. You can also have different classes of shares with different attributes and rights, such as common shares and preferred shares, voting rights, the right to receive dividends, plus different series of shares within a class of shares. The specifics can be complicated, so consider getting advice from a lawyer or accountant.
It’s possible to incorporate a federal company under the Canada Business Corporations Act. A federally incorporated company has the right to carry on business anywhere in the country and will have its name protected across Canada. But a federal incorporation usually takes more time, and the corporation is often more expensive to operate than a BC company.


==Alternatively, a BC company can carry on business in other provinces==
===Step 6. Prepare the incorporation documents===
Your private BC company can do this if it takes steps to register itself extra-provincially in those provinces. But unlike a federally incorporated company, there’s a risk that an extra-provincially registered BC company may have its application to register its name in another province refused by the Registrar of that other province. 
The documents needed to incorporate a company are:
*the incorporation agreement
*the incorporation application
*the articles
*the notice of articles


==How can you protect your company’s brand?==
====Incorporation agreement====
Registration and use of a trademark is the best protection for your company’s name and brand. Refer to Scripts 231 and 264 to learn more about trademark law.
This is an agreement between the incorporator (or incorporators) and the company. It describes the number, kind and class of shares each incorporator agrees to take once the company is incorporated. The incorporator must agree to take at least one share of the company and therefore become the company’s first shareholder. The incorporation agreement must be signed by the incorporator before submitting the incorporation application to the Corporate Registry. You don’t submit the incorporation agreement itself to the Corporate Registry, but a signed original should be placed in the company’s records book.


==Where can you get help or find more information?==
====Incorporation application====
*You can obtain a copy of BC’s ''Business Corporations Act'' from any bookstore that sells government publications or download a free copy from [http://www.bclaws.ca www.bclaws.ca].
The incorporation application is available from [https://www.corporateonline.gov.bc.ca/ Corporate Online]. The person who completes it is called the “completing party”. They must ensure the incorporation agreement and articles are properly prepared and signed by the incorporator.  
*Visit the Corporate Registry’s website at [http://www.bcregistryservices.gov.bc.ca/bcreg/corppg/index.page www.bcregistryservices.gov.bc.ca/bcreg/corppg/index.page].
*Small Business BC has excellent information on incorporating a company and free guides. Call 604.775.5525 in Vancouver or 1.800.667.2272 elsewhere in the province, or visit [http://www.smallbusinessbc.ca www.smallbusinessbc.ca].
*You can also consult your local library, bookstore and Chamber of Commerce for other books and resources on incorporating a company.


====Articles====
The articles are the rules and regulations for your company. You can use the sample set in the [https://www.canlii.org/en/bc/laws/regu/bc-reg-65-2004/latest/bc-reg-65-2004.html regulation under the ''Business Corporations Act''], or have articles specially drafted to suit your needs. The incorporator must sign the articles. You don’t need to submit them to the Corporate Registry, but you should file a copy in the company’s records book.


[updated October 2014]
====Notice of articles====
This document has the following information:
* the company’s name
* the authorized share structure
* whether there are special rights and restrictions attached to the shares
* the addresses of the registered and records offices
* the names and residential or business addresses of the directors


===Step 7. Submit the incorporation documents to the Corporate Registry===
You must e-file or electronically submit your incorporation application and attached notice of articles to the Corporate Registry, along with the prescribed fee, through [https://www.corporateonline.gov.bc.ca/ Corporate Online]. Your company will then be incorporated almost instantly.


----
After you e-file, the Corporate Registry will issue a certificate of incorporation and send you certified or true copies of the incorporation application and notice of articles.
----


==Next steps==


===Organizing your company===
This includes preparing the company’s records book, preparing director and shareholder resolutions, issuing shares, and preparing a directors’ register plus a “central securities register” or share register. You may wish to talk to a lawyer about this. Keeping a well-organized corporate record book and set of financial statements will help when you sell your company and if the Canada Revenue Agency (CRA) decides to audit your company.
===Maintaining your company===
To keep your company alive, it must file an annual report with the Corporate Registry each year within two months of its anniversary date of incorporation. Failure to file an annual report for two consecutive years will result in the company being struck off the registry and dissolved. You can restore a company but it’s costly to do so.
If the company changes its registered or records office, or if the directors resign or change their address, the company must e-file other forms with the Corporate Registry. There are fees for most of these filings. As well, each year, every BC company must choose to either appoint an auditor or waive the appointing of an auditor.
===Protecting your company’s brand===
Registration and use of a trademark is the best protection for your company’s name and brand. See our information on [[Trademarks, Copyright and Other Intellectual Property|trademarks]].
==Who can help==
===With more information===
Check the [http://www.bcregistryservices.gov.bc.ca/bcreg/corppg/index.page Corporate Registry website].
[http://www.smallbusinessbc.ca/ Small Business BC] has information on incorporating a company and free guides. Call 604-775-5525 in Vancouver or 1-800-667-2272 elsewhere in BC.
Check your local library, bookstore and Chamber of Commerce for other books and resources on incorporating a company.
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Latest revision as of 03:19, 11 September 2020

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Oliver Hamilton, Severide Law Group in July 2018.

If you’re forming a company with a small group of shareholders, a private company can be a good option. Learn the legal issues and steps involved in incorporating a private company.

What you should know

You have options on how to structure a new business

You have options on how to structure a new business. You could use a sole proprietorship, form a partnership, or incorporate a company. For an explanation of the pros and cons of each approach, see our information on starting a small business.

Before incorporating, you may also want to get advice from a lawyer and an accountant. They can help you decide the best way to set up the company’s authorized share structure (called the capital structure, and explained below), and how to structure the company for optimal tax planning.

There are two types of companies

Under BC’s Business Corporations Act, there are public companies and private companies.

A public company has its shares listed and traded on a stock exchange and must follow securities laws.

A private company is typically a small company with very few shareholders (sometimes called a closed corporation). Its shares aren’t offered for sale to the public.

This information deals with private companies in BC.

All private BC companies are incorporated online

You can use the BC Registry Services’ Corporate Online to incorporate a company. You can pay the fees by credit card.

Consider consulting a lawyer and accountant before incorporating a new BC company, as the standard articles (the set of rules that govern the company) and the authorized share structure provided through a basic online incorporation are simplistic and may not properly meet your needs.

Incorporating a federal company

You can incorporate a federal company under the Canada Business Corporations Act. A federally incorporated company has the right to carry on business anywhere in the country and will have its name protected across Canada. But a federal incorporation usually takes more time, and the corporation is often more expensive to operate than a BC company.

BC companies can carry on business in other provinces

A private BC company can carry on business in other provinces if it registers itself extra-provincially in those provinces. But unlike a federally incorporated company, an extra-provincially registered BC company may have its application to register its name in another province refused by the Registrar of that other province.

Form the company

Step 1. Decide on a name for the company

The name must end in “Limited”, “Ltd.”, “Inc.”, “Incorporated”, “Corp.” or “Corporation”, or the French equivalent to these words. Your new company name needs to be distinctive and have a descriptive element, or you can choose (or be assigned) a numbered BC company name. The Corporate Registry has more information on choosing a name.

If you decide to carry on business under a trade name (called a DBA or a doing-business-as name), you must still display the full legal name of your company on certain documents like contracts and invoices.

Step 2. Reserve the company name

The easiest way to reserve the company name with the Corporate Registry is using Corporate Online. If the name you want is available, it will be reserved for 56 days.

Step 3. Decide who will be involved in the company

The shareholders own the company and vote to appoint the directors. The directors control and govern the company and oversee how it is run. They may appoint officers, such as a president, secretary and senior management. Typically, the officers handle the daily operations of the company and are overseen by the directors.

One-person company

You can have a one-person company and be the sole shareholder, director and officer. In BC, unlike in other provinces, there is no requirement to have a BC resident director. There are other restrictions under the law on who can be a director of a BC company.

Shareholders

Consider carefully who the shareholders of your company should be. Even minority shareholders have considerable rights that can affect how a company is run. Shareholder disputes can be destructive. Removing an unhappy shareholder from a company can be very expensive, time-consuming and hard.

Sometimes, it is best if investors in a new company are just creditors who lend the company money, and not also owners. Or, you can see how a person works as an independent consultant before hiring them as an employee or making them a shareholder. You can see how they get along with the existing shareholders and how they will fit in the company in the long term.

There is no requirement for shareholders of BC companies to be BC or Canadian residents.

Directors

Part 5 of the Business Corporations Act deals with directors.

  • A private company must have at least one director.
  • A director doesn’t have to live in BC or Canada, but they do have to consent in writing to act as a director.
  • A director must provide the Corporate Registry with an address where they can receive documents during standard business hours. If there’s no such office, then the Registry requires the director’s home address.
  • A director must be at least 18 years old and cannot have certain criminal convictions, be a bankrupt person (who hasn’t yet been granted formal discharge from bankruptcy) or have been found by a court to be incapable of managing their own affairs.

Step 4. Pick a registered and records office

A company must have a registered and records office. The registered office is where legal documents can be delivered to the company. The records office is the address where all records for the company are kept. The registered and records offices must be in British Columbia and may be at the same address.

Every company must also have both a mailing address and a delivery address for its registered and records offices. The registered office mailing address is where the company will receive its mail. The registered office delivery address is where the company is given any notices like legal documents. The registered office mailing address may be a post office box, but the registered office delivery address must be a street address accessible to the public during business hours.

Step 5. Decide on an authorized share structure

The number of shares a company is authorized to issue to its shareholders is called the authorized share structure. This number can be limited or unlimited. You have to decide the type and number.

There are two main kinds of shares: par value shares and shares without par value. Par value shares have a minimum price they can be sold for. Shares without par value don’t have a minimum price. You can also have different classes of shares with different attributes and rights, such as common shares and preferred shares, voting rights, the right to receive dividends, plus different series of shares within a class of shares. The specifics can be complicated, so consider getting advice from a lawyer or accountant.

Step 6. Prepare the incorporation documents

The documents needed to incorporate a company are:

  • the incorporation agreement
  • the incorporation application
  • the articles
  • the notice of articles

Incorporation agreement

This is an agreement between the incorporator (or incorporators) and the company. It describes the number, kind and class of shares each incorporator agrees to take once the company is incorporated. The incorporator must agree to take at least one share of the company and therefore become the company’s first shareholder. The incorporation agreement must be signed by the incorporator before submitting the incorporation application to the Corporate Registry. You don’t submit the incorporation agreement itself to the Corporate Registry, but a signed original should be placed in the company’s records book.

Incorporation application

The incorporation application is available from Corporate Online. The person who completes it is called the “completing party”. They must ensure the incorporation agreement and articles are properly prepared and signed by the incorporator.

Articles

The articles are the rules and regulations for your company. You can use the sample set in the regulation under the Business Corporations Act, or have articles specially drafted to suit your needs. The incorporator must sign the articles. You don’t need to submit them to the Corporate Registry, but you should file a copy in the company’s records book.

Notice of articles

This document has the following information:

  • the company’s name
  • the authorized share structure
  • whether there are special rights and restrictions attached to the shares
  • the addresses of the registered and records offices
  • the names and residential or business addresses of the directors

Step 7. Submit the incorporation documents to the Corporate Registry

You must e-file or electronically submit your incorporation application and attached notice of articles to the Corporate Registry, along with the prescribed fee, through Corporate Online. Your company will then be incorporated almost instantly.

After you e-file, the Corporate Registry will issue a certificate of incorporation and send you certified or true copies of the incorporation application and notice of articles.

Next steps

Organizing your company

This includes preparing the company’s records book, preparing director and shareholder resolutions, issuing shares, and preparing a directors’ register plus a “central securities register” or share register. You may wish to talk to a lawyer about this. Keeping a well-organized corporate record book and set of financial statements will help when you sell your company and if the Canada Revenue Agency (CRA) decides to audit your company.

Maintaining your company

To keep your company alive, it must file an annual report with the Corporate Registry each year within two months of its anniversary date of incorporation. Failure to file an annual report for two consecutive years will result in the company being struck off the registry and dissolved. You can restore a company but it’s costly to do so.

If the company changes its registered or records office, or if the directors resign or change their address, the company must e-file other forms with the Corporate Registry. There are fees for most of these filings. As well, each year, every BC company must choose to either appoint an auditor or waive the appointing of an auditor.

Protecting your company’s brand

Registration and use of a trademark is the best protection for your company’s name and brand. See our information on trademarks.

Who can help

With more information

Check the Corporate Registry website.

Small Business BC has information on incorporating a company and free guides. Call 604-775-5525 in Vancouver or 1-800-667-2272 elsewhere in BC.

Check your local library, bookstore and Chamber of Commerce for other books and resources on incorporating a company.

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