Register Canada Offshore Company
In Canada, there is a choice of 13 provincial and territorial jurisdictions and one federal jurisdiction of incorporation. While company law statutes in Canada are quite similar, incorporation under the CBCA does offer certain distinct advantages. The federal business law in Canada is the Canada Business Corporations Act (CBCA). When the CBCA was first made law in 1975, it introduced the notion of "incorporation as of right."
Legal form: There are several forms of conducting business in Canada: Sole Proprietorship – this is basically a non-incorporated business with a sole owner; Partnership – the Ontario Partnership Act defines a partnership as the relationship between persons who are carrying on business in common with a view to profit. It is not a legally separate entity from its partners. A partnership can be either General or Limited; Corporation – a corporation is a separate legal entity in law from its owners. It can sue and be sued in its own name. Each jurisdiction in Canada (the ten provinces, the territories and Canada) has its own rules for incorporation; Non-profits, Co-ops and Others – These are more specialized forms of business organizations.
Incorporation: One or more competent individuals who are 18 years of age or older and who are not in a status of bankrupt may form a corporation under the Canada Business Corporations Act (CBCA). Similarly, one or more companies or "bodies corporate" may incorporate a company. These persons are called incorporators. An incorporator (individual or corporation) may form a corporation whose shareholders, officers and directors are other persons, or may serve as the sole director, officer and shareholder of the company. An incorporator is also responsible for organizational procedures, such as filing the articles of incorporation and designating the first directors. A company can be incorporated under the laws of only one jurisdiction. It must be decided whether to incorporate federally under the CBCA, or under the laws of a province or territory instead of the CBCA.
Once the corporation is approved, it must be properly organized. For example, the officers must be elected, the corporate seal adopted, the shares registered, etc. This is done through by-laws, meetings and resolutions. The federal government requires that proper records be kept at the registered office of the corporation, which is to include a copy of the Articles of Incorporation, all by-laws, all amendments, copies of any unanimous shareholder agreements, minutes of meetings, resolutions of directors, a securities register, adequate accounting records, records containing meeting minutes and resolutions, and a register of transfers.
Name of the company: Incorporation is permitted under a number, with the number being determined by Industry Canada. The result will be something like 1234 Canada Inc. The use of a number name can make incorporation quicker. It is not recommended to use number for companies that are doing business with the public as many people are suspicious of numbered companies. However, it is possible to incorporate under a number and then carry on business with a name, provided the name is registered under the Business Names Act of the relevant province where company is carrying on business. Generally, a corporate name consists of three elements:
- a distinctive element, which helps to distinguish the corporate name from that of other businesses. Two good examples are a surname and a made-up word.
- a descriptive element, which describes the nature of the business, such as Consulting, Gardening, or Trucking a mandatory legal element, such as Incorporated, Inc., Limited, Ltd., etc.
In order to avoid confusion in the market place and to protect the consumer, all jurisdictions in Canada regulate corporate names, but the degree to which they do so varies widely. The strictest standards are used by the federal government. For a Canada incorporation, the proposed name must not be the same as or similar to that of any known entity, if the use of that name would be likely to deceive the public. The federal government requires that a Canada-biased NUANS name search report be submitted with every application for a named corporation. NUANS stands for Newly-Automated Name Search, and is a report that searches for potentially confusing name of federal, provincial and territorial businesses as well as trademarks. Please note that Industry Canada will not accept NUANS reports from other jurisdictions.
Members: Any 'person' may own a share, and this includes individuals, corporations and trusts. Shares are a form of property, and can be bought and sold. However, these rights may be subject to any limitations that may be set out in the Act, the Articles, by-laws, shareholders' agreements, etc. In general, there are three types of rights associated with shares: the right to vote, the right to receive dividends and the right to receive the remaining property of the corporation upon dissolution. These rights can be divided among different types or classes of shares. Normally, the Articles of Incorporation will provide that an unlimited number of shares can be issued of each class. Classes can be assigned names (e.g. common, preference, non-voting) or simply be listed (e.g. Class A, Class B, Class C).
Directors of the company: A Canada corporation may have either a fixed number of directors, such as three, or a variable number of directors, such as between one and five. The number or range must be set out in the application form. This number can be changed later, although it requires an Amendment to the Articles of Incorporation. Canada permits one director to manage and supervise the affairs of a corporation. At least 25% of the directors of a federal Canada corporation must be 'resident Canadians.' If the Board of Directors has four or less directors, at least one of the directors must be a resident Canadian. According to the Canada Corporations Act, a 'resident Canadian' is a Canadian citizen ordinarily resident in Canada, a Canadian citizen not ordinarily resident in Canada but who is a member of a special group (e.g. Foreign Affairs employee) or "a permanent resident within the meaning of the Immigration Act (Canada) and ordinarily resident in Canada."
The positions and powers of officers are to be set out in the Articles, by-laws and/ or resolutions of the corporation. A corporation must have a President and a Secretary. It is possible for one person to fill all positions. A shareholder and/or director may also serve as an officer. Usually it is the President who has over all responsibility for the running of the business. The Treasurer is the one who must issue the shares but also usually looks after the accounting. The Secretary is responsible for ensuring that minutes are taken at meetings, and the corporate records and Minute Book are properly kept.
Registered office: A CBCA company must have a registered office within Canada. The purpose of the registered office is to establish a location where official forms and notices can be delivered to the company. A post office box may not be used as a registered office address.
Audit and financial returns: An Ontario corporation is required to file a combined Corporation Tax and Annual Return every year. This includes the corporate information on directors, officers, etc. There is no charge for this filing. A federal corporation must annually file a Corporation Tax Return and a Corporate Information Return – two separate documents. The fee for the Corporate Information Return is $20 if filed online and $40 if filed through other means. A federal corporation based in Ontario must also annually file with the Ontario government. The shareholders may choose to waive the audit requirement, provided that all voting and non-voting shareholders agree. Most companies will retain the services of an accountant to prepare the financial statements. A company must keep up-to-date financial statements. Copies do not have to be filed with the Director under the CBCA unless the corporation distributes its shares to the public (that is, it is listed on a securities exchange).
Meetings:Newly formed corporation should hold its first meeting of directors (called an organizational meeting) shortly after incorporation. The orders of business of an organizational meeting are usually to appoint officers, issue shares, make by-laws, appoint an auditor until the first meeting of shareholders and make banking arrangements. The first annual meeting of shareholders must be called within 18 months following incorporation. After the first meeting, the directors must call an annual meeting not later than 15 months after its last meeting and not more than 6 months after its financial year end.