Introduction:
Commencing a business corporation in Canada offers numerous benefits such as limitation of liability, increased credibility in the business-sphere and access to the capital markets if necessary. To access these benefits, we have highlighted the various considerations required to navigate the process of establishing a business corporation in Canada.
1. Business Structure:
There are different types of business structures including but not limited to sole proprietorship, partnership and corporation. It is important to determine the most suitable business structure for your type of business. The subject of this write-up is the corporation and amongst the numerous benefits of registering a corporation include the limitation of liability whereby the corporation has its own identity as a legal person that can sue and be sued, own property and dispose of properties. The benefit of this structure separates the business owner from the business.
2. Name Selection and Registration:
In order register a business corporation, the intended name must comply with relevant laws. A comprehensive search is conducted to ensure the name does not conflict with an existing name or infringe on existing trademarks. It is essential to select a distinguishable name for your business corporation.
3. Articles of Incorporation:
These are the constating documents that establishes the business corporation as a going concern. Regardless of whether the business corporation is a federal or provincial corporation, the articles contains information about the business including the business name, registered office address, number of directors and first director's of the corporation.
4. Bylaws:
The bylaws determine the corporate governance structure of the business corporation. It outlines roles, duties and liabilities of the officers and directors of the business corporation. It also contains procedures, and rules for decision-making within the company.
5. Shares:
Where there are shareholders in the business corporation, you may decide to have one or more classes of shares in a business corporation which may either be certificated or uncertificated. The record of these shares should be safely kept in a minute book. The minute book which may be hard copy or online is where the corporate records are kept. where you decide to issue shares, aside from issuing the shares, a resolution to issuing the shares, subscription and acknowledgement of the shares have to be documented.
6. Tax Considerations:
You should consider consulting with a business tax professional to understand the tax obligations applicable to your business corporation and develop a strategy from the onset. Different tax rates apply to different provinces. The CRA website has enormous resources to assist you in familiarizing yourself with federal and provincial tax rates, deductions, and credits.
7. Permits and Licenses:
Depending on the business activities you choose to undertake, check that you are in compliance with the relevant laws and regulations You should see bizpal.ca for specific activities that may require permits or licenses to obtain approval.
Conclusion:
There are various steps involved in starting a business corporation in Canada and ensuring success from inception. You should seek professional advice when required and take into consideration applicable laws.
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