How to Obtain Certificate of Incorporation in Canada?
The Certificate of Incorporation is the document that details the establishment of the company as a distinct legal entity.
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Introduction: Certificate of Incorporation
The Certificate of Incorporation is the document that details the establishment of the company as a distinct legal entity. On the date specified in its certificate of incorporation, a company is deemed to have been formed or to have become a separate legal person. Even if there was a mistake in the registration process, the Certificate of Incorporation serves as compelling proof of the legitimacy of the company's incorporation. Once a Certificate of Incorporation is issued, a company may start doing business right away. The Certificate is therefore proof beyond a reasonable doubt that a company exists.
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What is Incorporation in Canada?
Incorporation in Canada is done in two ways- Provincially and Federally. Provincial Incorporation- When a company is incorporated provincially, it can only conduct business in the province where it is incorporated. With such incorporation, the name of the Company is protected only in that province which means another company may operate under the same name in another province.
Federal Incorporation- A business can operate in all provinces and territories if incorporated federally. Federal incorporation is more expensive initially and necessitates more annual paperwork than provincial incorporation. Such incorporation allows a business to run anywhere in Canada hence the name of the Company is protected throughout Canada.
The Federal Corporation Directorate in Canada issues the Certificate of Incorporation. It contains the following information-
- The Company's Name
- Incorporation Date
- Registration Number
How to get a Certificate of Incorporation?
A company shall be granted a Certification of Incorporation only when it concludes with all of its registration formalities. To register a corporation, one must:
- Get a federal business number and Corporation income tax account from the Canada Revenue Agency.
- Get a BN Number. The business number (BN) is a 9-digit account number that identifies your business to federal, provincial, and municipal governments. The BN is issued by the Canada Revenue Agency (CRA).
- Incorporate your company and its articles of incorporation through federal incorporation or provincial incorporation.
- Register as an extra-provincial or extra-territorial corporation in all other Canadian jurisdictions where one plans to run their business.
- Apply for any permits and licenses the business may require.
Now, the Company must fulfil its incorporation formalities as well
- Give a name to the Company
Every company that has been incorporated needs a name that clearly describes it legally. A company name is what you have here. Choosing a name for a corporation is the first step in the incorporation process. The company may have a number-based name, Canada Inc., or a word name made up of letters and symbols.
- Build the Articles of Association
The corporate structure of a company is established in this step.
Consider basic incorporation if one is forming a small, privately owned company. With this pre-packaged incorporation option, this procedure is simplified and the corporation will have the following features:
- Predetermined incorporation documents
- One or two share classes; ten maximum directors
- A given corporation name.
Alternatively, you can customize your articles of incorporation to suit your specific business needs. In this case, choose custom incorporation and specify:
- Corporate name
- Share structure and any restrictions on share transfers
- Corporation's number of directors
- Any restrictions you might want to set for your business or business activities
- Any other provisions.
- Language of the articles
The Articles of Incorporation can be in the official language of one’s choice.
- Establish the initially registered office address and first Board of Directors
- Pay the required fees
Laws related to a company in Canada are governed by the Canada Business Corporation Act, of 1985. Part II of the Act lays down provisions relating to the Incorporation of a Corporation in Canada.
Benefits of Incorporation in Canada
- Reduced tax rates
Corporations and their owners are subject to separate taxation. Rates of personal income tax are typically higher than those of corporations.
- Easier access to financing
Borrowing costs are cheaper for corporations. They can also raise money by offering investors shares or bonds called shareholders.
- Limited Liability
Debts of a corporation are not the responsibility of the shareholders. If your business fails, your shareholders will only lose the amount they invested.
- Separate Legal Entity
The same rights that apply to individuals also apply to corporations, including the ability to own property, obtain credit, and enter into contracts.
- Continuous Existence
Corporations continue to exist until they dissolve, merge, or renounce their charter. When an owner passes away, a business ceases to exist under other business forms.
Conclusion
A company in Canada is given a certificate of incorporation once its application has been examined and approved by the relevant body. The Federal Corporation Directorate issues the Certificate of Incorporation in Canada, an official document that contains information on the company's name, incorporation date, and registration number.
About the Author
Fatima Baig
Legal Content WriterA Post Graduate in the field of Corporate and Commercial Laws. I have worked as a freelance content writer for several Legal topics for over 5 years. I aspire to learn and grow in this field along with being able to portray my Legal skills through writing.
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