Frequently asked questions

General information

What is Corporations Canada responsible for?

Corporations Canada is the country’s federal corporate regulator. It administers the laws that allow Canadians to create and maintain a corporation under the federal laws governing corporations in Canada. It should be noted that banks and trust companies are incorporated by the Office of the Superintendent of Financial Institutions.

What are the laws that Corporations Canada administers?

Corporations Canada is responsible for the administration of the following laws:

  • Canada Business Corporations Act
  • Canada Not-for-profit Corporations Act
  • Canada Corporations Act
  • Boards of Trade Act
  • Canada Cooperatives Act.

It is also responsible for compliance activities under these laws, as well as for registering railway deposits and issuing official documents under the Great Seal of Canada.

What are the benefits of incorporation?
  • Limited liability: potential loss limited to amount invested in the corporation.
  • Perpetual existence: corporation continues on after the death of the individual.
  • Tax advantages: accountants will recommend incorporation once revenues reach a certain point.
  • Raising capital: corporate form of business organization easier to raise capital through the sale of shares.
What are the benefits of incorporating at the federal level?
  • Heightened name protection: Corporations Canada applies very tough tests before granting a company the right to use a particular name. When a company's name is approved, it's protected across the country – a status second only to trade-mark protection. (Please note that the Province of Quebec does not currently provide data to Nuans. For your own protection, if you are doing, or intend to do business in the Province of Quebec, you should search the Quebec corporations database at Registraire des entreprises du Québec as well.
  • Right to carry on business anywhere in Canada: Federally incorporated companies can carry on business anywhere in Canada, and the CBCA does not set restrictions regarding the province or territory where the head office is located, corporate records are maintained and annual general meetings are held.
  • Recognition: Federal incorporation is often considered a sign of distinction, companies incorporated under the CBCA receive global recognition as Canadian companies.
  • Excellence in Client Service: Corporations Canada offers high quality service: it offers clients an online service that allows you to send documents, pay fees, and receive documents and acknowledgments back from the Director under the CBCA, via the internet.

Business corporations

What kind of businesses can incorporate under the CBCA?

Almost any type of business may incorporate under the CBCA. However, mortgage, banking, insurance, loan and trust companies, and other Financial Institutions, cooperative, Chambers of Commerce as well as not-for-profit corporations are incorporated under different statutes.

You can find further information about mortgage, banking, insurance, loan trust companies and other Financial Institutions at The Office of the Superintendent of Financial Institutions website. You can also find more information about Chambers of Commerce and cooperatives in the Forms, Policies, Fees and Legislation section of this site.

There are no restrictions, such as minimum company size, on the businesses that may incorporate under the CBCA. While all provinces and territories have similar legislation for companies operating within their borders, only the CBCA is national in scope.

Many small businesses incorporating under the CBCA have the intention (either now or sometime in the future) of operating in more than one province. They choose to incorporate under the CBCA now in order to simplify their business relations later if they decide to expand operations or grow larger.

Who can form a corporation?

One or more individuals who are 18 years of age or older, is not of unsound mind and who are not a 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.

Is a lawyer needed to incorporate?

A lawyer is not necessary to incorporate, although they may provide valuable advice.

If the proposed corporate structure (i.e. shareholdings) is going to be simple, most information can be found in Business corporations.

If the incorporator is less experienced, or the proposed structure is more complicated, he/she may wish to consult with legal counsel or other professional advisors.

Do online documents have to be signed?

Documents can be filed in electronic format using a typed signature and title of the authorized officer (an original signature is not required). However, it should be noted that signed copies of all documents must be maintained in the records of the corporation.

Do I have to get a corporate seal?

A corporation under the CBCA is not required to have a seal. If you wish to have a corporate seal for your corporation, you may purchase one from a legal stationery store or commercial supplier. However, you do have to get a corporate seal if you are a corporation under the CCA-II (not-for-profit).

If a company incorporates at the federal level, do they need to register anything with the provinces?

Yes. Whether a company is incorporated federally or provincially, they will likely be required to register their business in one or more province(s) and/or territory(ies) where they carry on business.

Corporations Canada is working with provincial and territorial officials to ease compliance with this requirement. Currently, any client completing their federal incorporation process through our Online Filing Centre has the option of filling out extra-provincial registration forms for Saskatchewan, Ontario, Nova Scotia, and Newfoundland and Labrador.

The other provinces and territories have individual requirements for registering corporations from outside their borders. Incorporators should contact the local corporate law administration office (also known as Provincial Registrars) in each province or territory in which they plan to carry on business.

Do I have to incorporate federally and provincially?

No, you either incorporate federally or provincially.

Where can I obtain a copy of the CBCA (or another Act) and its Regulations?

A copy of the Act and Regulations may be obtained through various legal publishers. The Act CBCA, or other Acts, are also available electronically through the Department of Justice.

Can I file with the Director the required financial statements in U.S. GAAP (Generally accepted accountant principles)?

As of March 8, 2005, corporations incorporated under the Canada Business Corporations Act who are also registered with the US Securities and Exchange Commission (SEC) are allowed to file financial statements and auditor's reports using the US generally accepted auditing principles (GAAP).

What percentage of directors must be resident Canadian?

As per the Canada Business Corporations Act, 25% of the directors must be "resident Canadian". (as per the definition in the Immigration Act)

For example: if there are four directors, at least one must be resident Canadian. if there are 5 directors 2 must be resident Canadian etc…

What is National Instrument 45-106?

On September 14, 2005, the Canadian Securities Administrators' National Instrument 45-106 titled Prospectus and Registration Exemptions came into effect in all Canadian jurisdictions. Among other things, National Instrument 45-106 replaced the "private company exemption" with a "closely held issuer exemption" that refers to "securities", and not just to "shares". More importantly with respect to the corporation's articles, National Instrument 45-106 stipulates that to qualify as a private issuer there must be restrictions on transfers of securities.

What are the effects of National Instrument 45-106 on the CBCA?

National Instrument 45-106, like all other Canadian Securities Administrators' national instruments, does not change the Canada Business Corporations Act (CBCA).

Corporations Canada recommends putting restrictions on share transfers in Item 4 and restrictions on transfers of other securities in Item 7 of the articles. This approach is outlined in Steps to incorporating. However the articles of incorporation, amalgamation, continuance, revival, and restated articles of incorporation will not be rejected if the restrictions on all securities transfers, including shares, are in Item 4. Corporations Canada will accept the forms whether the transfer restrictions are set out in two places or in one.

Do I need to make retroactive amendments to my articles in order for my corporation to be considered a private issuer under National Instrument 45-106?

Corporations Canada does not give advice respecting the need for amendments to a corporation's articles. It is up to the corporation to ensure that its articles meet the requirements of the CBCA, as well as other statutory, regulatory or other requirements, such as National Instrument 45-106.

If the corporation's articles must be amended in order to meet the private issuer requirements, the corporation must make these amendments by filing Articles of Amendment. The effective date for the amendments is the date indicated on the Certificate of Amendment, that is, the date on which the Articles of Amendment were received by Corporations Canada.

Any questions relating to the application of National Instrument 45-106 should be referred to the Canadian Securities Administrators.

A corporation subject to a provincial act can make retroactive corrections/amendments to its articles; my corporation is a CBCA corporation, and I would like to make such retroactive corrections/amendments. How do I proceed?
or
I have been advised to make retroactive corrections to my corporation's articles. How do I proceed?

The addition or amendment of restrictions on share transfers and securities in the context of the adoption of the National Instrument 45-106 cannot generally qualify as corrections under section 265 of the CBCA. If you disagree with the position of the Director, you may apply to the court for an order that the articles be corrected. Provisions of provincial corporate legislation cannot be applied to CBCA corporations.

Under the CBCA, a corporation's articles can only be amended by submitting Articles of Amendment to Corporations Canada (see the Amendment Policy). The date shown on the Certificate of Amendment, that is, the date on which the Articles of Amendment were received by Corporations Canada, is the effective date of the amendments.

Can the articles be bilingual?

The articles can be in the official language of your choice. This means they may be:

  • in a format that uses either official language (i.e., in French or in English);
  • in a format that employs both English and French; or
  • in a fully bilingual format, using both official languages equally.

Not-for-profit corporations

Sole proprietor / partnership

Is it better to incorporate or to register (as a sole proprietor/partnership) one's business?

This depends on the particular situation: the type and the size of business, the risks involved, the number of people involved, the geography covered and the tax situations of the individual involved.

Where may I register a sole proprietorship or partnership?

Sole proprietorships and partnerships are registered at the provincial level. A list of the registrars is available in the General Information section of this website.

Compliance

What could happen to a corporation if there are no directors (i.e., it is directorless)?

Subsection 212(1) of the CBCA allows the Director appointed under the CBCA to dissolve a corporation that does not have any directors or where all the directors of a corporation have resigned or have been removed without replacement.

I have just resigned from the board of directors of a corporation, can I sign and file the required Form 6 (Changes Regarding Directors)?

The Form 6 (Changes Regarding Directors) can be signed by any individual who has the relevant knowledge of the corporation and who is authorized to do so by the directors.

Subsection 113(1) of the CBCA requires that a corporation shall, within fifteen days after a change is made among its directors, send to the Director a notice, in the form that the Director fixes, setting out the change. Since the resignation is prior to the signature and filing of Form 6 – Changes Regarding Directors, the resigning director cannot sign any documentation/notices in that capacity. However, if the director is also an officer for the same corporation he can sign the form in that capacity.

What is the deadline for filing your first Annual Return (Form 22)?

Please refer to our Annual Return Policy

Can a corporation have a P.O. Box (Postal Office Box) as the Registered Office address?

No, the registered office must be a street address.

The purpose of the Registered Office is to have a location for service of a notice or document required to be sent or served on a corporation (section 254 of the CBCA). Where it is impossible for a corporation to have a street address (certain remote communities in the Territories do not have street addresses) then a detailed description of the Registered Office location and a P.O. Box address may be acceptable. This is, however, to be determined on a case-by-case basis.

Can a corporation be a director on the Board of Directors?

No, directors must be individuals.

Subsection 105(1) of the CBCA, disqualifies from being a director:

  1. anyone who is less than eighteen years of age;
  2. anyone of unsound mind;
  3. a person who is not an individual;
  4. and a person who has the status of bankrupt
Can a corporation incorporate another corporation?

Yes, a corporation can be an incorporator.

Subsection 5(2) of the CBCA allows one or more bodies corporate to incorporate a corporation (refer to Steps to incorporating for more details on the forms and documentation required).

What are the penalties for filing forms late?
(i.e. the Annual Return (Form 22), Change of Registered Office Address (Form 3) and Changes Regarding Directors (Form 6))

Subsection 212(1) of the CBCA allows the Director to dissolve a corporation if it is in default, for a period of one year, in sending to the Director any fee, notice or document required by this Act. Also, the Director or a complainant could apply to court to obtain a compliance order against the corporation in default (section 247).

Is the annual return the same as my tax return?

No, they are separate documents and filed with different government agencies.

Please refer to our Annual Return Policy.

Who can sign forms 1, 2, 3, 4, 6 and 22?

For forms 1, 2 and 4, paragraph 262(2)(a) states that: "Where the Act requires that articles or a statement relating to a corporation be sent to the Director, the articles or the statement shall be signed by a director or an officer of the corporation or, in the case of an incorporation, by an incorporator".

As for forms 3, 6 and 22, section 262.1(2) states that: "The forms may be signed by any individual who has the relevant knowledge of the corporation and who is authorized to do so by the directors". Here are some examples of accepted signatures:

Form 1:

  • the incorporator (a person) or a corporation

Form 2:

  • the incorporator (if it is a new corporation)
  • the director or officer (if it is an amalgation or a continuance)

Forms 3 and 6:

  • a director of the corporation
  • an officer of the corporation
  • the incorporator (if it is a new incorporation)
  • any individual who has relevant knowledge of the corporation and who is authorized by the directors

Form 4:

  • a director of the corporation
  • an officer of the corporation

Form 22:

  • a director of the corporation
  • an officer of the corporation
  • any individual who has relevant knowledge of the corporation and who is authorized by the directors
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