Corporation
Corporation is a separate legal entity which can own property, carry on business, possess rights and incur liabilities (Jessica Wu).
Advantage vs. Disadvantages
Legal Requirements and Incorporation:
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In most Canadian jurisdictions, a corporation may be incorporated by one or more corporations or individuals or a combination of both, unless one is less than 18 years of age, incapable or bankrupt (Anthony VanDuzer).
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Articles of Incorporation are the most important of the documents because they set out the fundamental characteristics of a corporation such as a name, jurisdiction of office and registration, class number and characteristics of shares, number of directors as well as any restrictions on transferring shares or business activity (ServiceOntario).​
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Under the Ontario Business Corporations Act the following forms must be filed electronically, by courier or by mail:
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​Articles of Incorporation, Form 1
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Consent to Act as First Director, Form 2
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A fee of $360 is payable to the Minister of Finance (ServiceOntario).
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Under the Canada Business Corporations Act, there are the following filing requirements:
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Articles of incorporation, Form 1 (s. 6)
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Initially registered office address and the first board of directors
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A name search report on the proposed name of the corporation, along with supporting information
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A fee of $250
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Additionally, under the Corporations Information Act (ss. 3 & 4), a federal corporation having its registered office or carrying on business in Ontario must file with the Ministry of Government and Consumer Services an initial notice setting out the prescribed information as of the date of filing and from time to time about certain changes in the information contained in the initial notice (Anthony VanDuzer).
Ability to Carry on Business in Different Jurisdictions:
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A federally incorporated corporation has the right to carry on business and use its name in all provinces.
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By contrast, a corporation incorporated under the OBCA can only carry on business in Ontario unless it obtains a licence under the extra-provincial licensing statute of another province.
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Unlike the situation with a CBCA corporation, this registration or licence may not be granted if the name of the Ontario corporation is not acceptable in the province where an application for the registration of licence is being made.
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Under the Ontario Extra-Provincial Corporations Act, a federal corporation is entitled to carry on business in Ontario without an extra-provincial licence (Jessica Wu).
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Registration of the business name (numbered or word) is mandatory. In Ontario, it is done under Form 2 “Registration of a Business Name for a Corporation”. To name a federal corporation, one must complete a NUANS Report and then register a legal corporate name or a trade name (Government of Canada). Furthermore, “[w]hen incorporating other than with a numbered name, the articles of incorporation must be accompanied by an Ontario/federal-based search report obtained from the automated name search system (NUANS). The NUANS system is maintained by Innovation, Science and Economic Development Canada (ISED). A NUANS is valid for a period of 90 days” (Alison Sinclair).
