Incorporation is the process of enlisting your business as a separate legal entity, limiting your liability in the organisation. Incorporation provides your company rights equivalent to that of a natural person. This implies that a business once enlisted, federally or provincially, can acquire assets, derive loans and become a part of a legal action.
In Canada, commercial organisations are incorporated federally under the Canada Business Corporations Act (CBCA) and not-for-profit organisations are enlisted under the Canada Not-for-profit Corporations Act (NFP). Enlisting your business at the right time is crucial to ensure its steady development. Incorporating federally also provides your entity global recognition and offers many tax benefits to young businesses.
To get you started, here are a few key steps to incorporate in Canada:
Select a Corporation Name
To ensure successful incorporation, it is important to choose a business name which is unique as well as distinguishing of your services. Your business name needs to fulfil the following prerequisites to ensure incorporation:
- The name should be distinctive and must not overlay with any of the previously registered or trademarked entities
- The name must include a legal suffix such as Ltd. or Inc.
- The name should not include any unacceptable or inappropriate terms
Businesses can usually choose either a numbered title or a named title for their organisation. Numbered titles do not require extensive research and only include the registration of a unique numeral code. However, it is imperative to consult a corporate lawyer while opting for a named corporation. Selecting and registering a unique company name necessitates thorough research of the NUANS report and may require the filing of a Corporate Name Information Form. A skilled lawyer can help you choose a distinctive name for your organisation and ensure successful registration for your business.
Obtain a Business Number
A business number is a unique 9-digit code that provides an individual federal identity to your organisation. Although Federal Canada’s official website provides a complete checklist of information prerequisite to obtain a business number, it is recommended to consult your corporate lawyer for the same.
Register the Address of Operation
To incorporate in Canada, every business needs to retain a registered address of its operation. This is especially relevant for organisations that operate directly from the address of their residence. It is recommended to register a separate address for corporate and legal documentation to avoid disruption at your place of work and dwelling. Referring to a corporate lawyer in these cases can help you register your business address accurately.
Draft the Articles of Incorporation
Your articles of incorporation determine your business’s structure, its method of operation and the tax benefits applicable to your services. Business owners can file their articles of incorporation through the online filing centre or by completing a Federal Incorporation Form post the payment of a registration fee. To ensure successful listing, it is vital to include the following information in your articles:
- A unique business name
- The province of your operation
- The structure of your board of shareholders
- Details regarding key board members
Consulting an experienced law firm can help you complete your articles of incorporation correctly and make the process of registration easier for your organisation. Book an appointment with our legal experts to know more federal incorporation.