Articles of Incorporation in Canada

Aug 28, 2023

 

Articles of incorporation in Canada¬†are a legal document necessary to the incorporation process and filed with a provincial or territorial government or the federal government. The articles outline the corporation’s objectives and the rules it must adhere to.

 

Necessary Information

Different businesses may have some variations, but generally, articles of incorporation contain the following details:

1. The complete legal name of the corporation obtained from the name search report.
2. The complete address of the registered office, excluding P.O. boxes.
3. The number of directors, which can be a fixed quantity, a minimum requirement, or a maximum limit.
4. The full names and addresses of each founding director. In cases of federal or Ontario provincial incorporation, at least 25% of the directors must be Canadian residents. If there are fewer than four directors, at least one must be a resident Canadian.
5. Limitations on the corporation’s business activities or powers it can exercise. For example: “The corporation’s scope shall be confined to the sale and servicing of motor vehicles.”
6. Various types of shares and the maximum quantity for each category that can be issued. Shares are typically classified as common, class A, class B, preferred, or assigned other designations.
7. The rights, privileges, and restrictions associated with each class of shares. For instance, a share class might be labeled as “nonvoting,” meaning that shareholders cannot participate in activities like electing directors. Shares may also have a specified fraction of voting rights, like 1/10th of a vote per share. Preferred shareholders generally have the advantage of receiving dividends and capital returns in the event of the corporation’s dissolution, which is higher than common shareholders but lower than bondholders.
8. Any limitations on issuing, transferring, or owning shares.
9. Provisions or constraints on the borrowing authority of the directors. For example: “The board of directors is authorized to borrow money or use property as collateral for any company debt or obligation.”
10. Additional required articles, such as proxy voting requirements or majority voting rules.
11. The full names and signatures of the individuals incorporating the company.

 

Federal Incorporation in Canada

When you opt for federal incorporation, your company gains the ability to conduct business throughout Canada and enjoys enhanced credibility for international operations. Moreover, federal incorporation offers nationwide safeguards for your business name.

To federally incorporate your business, you can obtain the necessary forms from Corporations Canada. This organization, a division of Industry Canada, is responsible for administering the Canada Business Corporations Act (CBCA) and acts as the central authority for filing various documents, including articles of incorporation. Offices of Corporations Canada can be found in Vancouver, British Columbia; Ottawa, Ontario; Montreal; and Toronto.

 

Provincial Incorporation in Canada

If you plan to incorporate your business at the provincial level, reach out to the relevant provincial registrar. They usually have websites where you can access and download the necessary forms. By incorporating at the provincial level, it means your business will be limited to operating within that specific jurisdiction, and the name protection you receive will also be restricted to that jurisdiction alone.

 

Changing the Articles of Incorporation in Canada

If you want to make changes to the articles of incorporation for a federally incorporated company, you need to submit Form 4 – Articles of Amendment to Corporations Canada. In case the change involves a name amendment, you must provide a completed name search. And if you’re altering the registered address, you need to include a copy of Form 3 – Change of Registered Office Address. Finally, if there are any changes to the directors, include a copy of Form 6 – Changes Regarding Directors.

For a company incorporated at the provincial level, you should file the appropriate amendment forms specific to your province. For instance, if you’re in Ontario, you would file the Articles of Amendment Form 3 under the Business Corporations Act with Service Ontario.

 

 

 

CBES is here to assist you; feel free to contact us for expert guidance.

 

 

 

 

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