Diana Young Professional Corporation

Barristers, Solicitors, & Notary Public

Corporation

A corporation is a legal entity that is separate from its owners - the shareholders. No shareholder of a corporation is personally liable for the debts, obligations or acts of the corporation. That means, if a corporation fails, the shareholders of the corporation only stand to lose their investment, but will not be liable for the debts that remain owing to the corporation's creditors. Directors, officers and insiders can bear some liability for their involvement with the corporation. A corporation can be formed at either the federal or provincial level.

A corporation is identified by the terms "Limited", "Ltd.", "Incorporated", "Inc.", "Corporation", or "Corp." Whatever the term, it MUST appear with the corporate name on all documents, stationery, and so on, as it appears on the incorporation document. A corporation name can be either a number corporation with number assigned by the registry such as 1234567 Ontario Inc., or a name company with name chose by the incorporator and not used by other corporation, such as Wong's Brothers Inc.

In general, there are two types of corporation: Private Corporation and Public Corporation, according to the nature of corporate shares.

Private Corporation
A private corporation can be formed by one or more individuals. A majority of directors of the private corporation must be Canadian residents. If none of the directors reside in the province in which it does business, the corporation must appoint a Power of Attorney who resides in the province. A private corporation cannot sell shares or securities to the general public.

Public Corporation
Generally, a "public corporation" is a company that offers its shares or securities to the general public. Also, if a private company intends to become a public company to distribute shares or securities to the public in Ontario, it must comply with the special requirements outlined in the Ontario Securities Act, unless a suitable exemption is available to that particular private company.

In general, there are two types of corporation: Provincial Corporation and Federal Corporation, according to the level of governments the corporation is registered (or incorporated), i.e. Private and public corporations may be incorporated provincially or federally.

Provincial Corporation

If you plan to incorporate a business in Ontario, you must submit at least the following:

  1. Form 1 - Articles of Incorporation;
  2. Provincial NUANS Report - Newly Upgraded Automated Name Search (NUANS) report (not required for a number corporation);
  3. Fee of $360, for paper filing or a fee of $300, for online filing, payable to Ontario government, plus administration fees from service provider.


Federal Corporation

A federally incorporated corporation can carry out business throughout Canada, although it may be required to register or obtain a licence in a province in which it does business. If you plan to incorporate a business with federal government, you must make an initial filing with at least the following:

  1. Form 1 - Articles of Incorporation;
  2. Form 3 - Notice of Registered Office;
  3. Form 6 - Notice of Directors;
  4. Federal NUANS report (original) (is not required for number corporation);
  5. Fee of $250, for paper filing or a fee of $200 for online filing, payable to federal government.


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