How to incorporate a business corporation in Ontario.

How to incorporate a business corporation in Ontario. Articles of Incorporation, Form 1 under the Ontario Business Corporations Act (OBCA) must be completed and filed to incorporate a business corporation in Ontario.

Name search

Unless the corporation will have a number name, an original Ontario-biased NUANS name search report must be obtained from a private name search company and be submitted with the Articles of Incorporation. The NUANS report cannot be dated more than 90 days prior to the submission of the articles.

Corporation name

It is the responsibility of the incorporators to ensure the name for an Ontario business corporation complies with the Business Corporations Act and its Regulations.

Legal element

The word “Limited”, “Limitée”, “Incorporated”, “Incorporée” or “Corporation” or the corresponding abbreviations “Ltd.”, “Ltée”, “Inc.” or “Corp.” shall be part of the name of every corporation, but a corporation may be legally designated by either the full or the abbreviated form (S.10 (1)).

English/French versions

The name of a corporation may be in an English form only, a French form only, an English and a French form combined, or an English form and a French form which are equivalent but used separately (S.10 (2)).

When incorporating a corporation with an English and French form of the name a name search is required for each form of the name (English and French) unless the English and French forms of the name are identical and the legal element in the French form is the French version of the legal element in the English form (for example, ‘incorporee’ and ‘incorporated’). There should be a forward slash (/) separating the two forms of the name.

Versions in languages other than English

A corporation may have in its articles, a special provision permitting it to set out its name in any language and the corporation may be legally designated by that name (S.10 (4)). This would allow the corporation to legally use a foreign version of its corporate name for the purposes of conducting business. However, the foreign version would not be entered into the Branch’s electronic database (ONBIS) and, therefore, would not appear on a Certificate of Status produced in respect of the corporation name. Despite subsection (4), a corporation shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the corporation and in all documents sent to the Director under this Act (S.10(5)).

Identical names

A corporation may only acquire a name identical to that of another corporation if it meets the requirements of Sections 6(1) or 6(2) of Regulation 62 under the Business Corporations Act.

Subsection 6(1)

Except as provided in subsection (2) and section 10, no corporation may acquire a name identical to the name or former name of another body corporate, whether in existence or not unless, (a) the body corporate was incorporated under the laws of a jurisdiction outside Ontario and has never carried on any activities or identified itself in Ontario; or (b) at least ten years have elapsed since the body corporate was dissolved or changed its name.

Note: that although a Federal corporation with an identical name to a proposed Ontario corporate name may not be currently operating or active in Ontario it is entitled to commence activities in Ontario at any time in the future. Incorporators who incorporate with the same or similar name are therefore assuming the risk of an objection to their corporate name, which may result in a name hearing under section 12 of the Business Corporations Act.

Subsection 6(2)

Before the name can be duplicated under Subsection 6(2), Central Production and Verification Services Branch requires that a legal opinion accompanies the articles being filed. The legal opinion must be on legal letterhead and must be signed by an individual lawyer (not a law clerk or law firm). It must also clearly indicate that the corporations involved comply with Section 6(2) by referring to each clause specifically.

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Section 10

Under Section 10 of the Regulations, the name of a corporation formed by the amalgamation of two or more corporations may be identical to the name of one of its amalgamating corporations, if the name is not a number name.

Requirement for a name that is not identical

Corporation names can be duplicated only if the name is not a number name and only in the case of an amalgamation, or where the corporations comply with S.6 (1) or S.6 (2) of Regulation 62. All other instances prohibit the use of a name for a corporation that is identical to the name or former name of another corporation, whether the corporation is active or not (S.6 (1) of Regulation 62).

In order to acquire a name that is not identical, the name may be varied by the addition or deletion of words, numerals, or initials, or by substituting one of the other required legal elements or their corresponding abbreviations.

The addition or deletion of punctuation marks or other symbols are not sufficient to make the name different for the purposes of the Act (S.7 of Regulation 62).

Note: that under the Business Corporations Act, incorporators are responsible for ensuring that Articles conform to law. Under the policy of Endorsement as of Right, the Branch does not review proposed corporation names for similarity to any other name. It is the applicant’s responsibility to ensure the corporation name is not confusingly similar to that of another corporation, business name or trademark. A corporation that acquires a name similar to that of another corporation may be subject to names hearing under Section 12 of the Business Corporations Act or a lawsuit.

Number company

If an applicant wishes to incorporate with a number name, a name search is not required. The Central Production and Verification Services Branch will assign a number. When completing the forms leave 9 empty boxes (for the number) and then the word “Ontario” followed by a legal element (see above).

Other business names

A corporation may carry on its business activities under a name other than its corporate name, provided that the name is registered under the Business Names Act. For more information about registering the operating name see the “Registering Your Business Name in Ontario” information sheet.

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Directors

The directors shall manage or supervise the management of the business and affairs of the corporation. The board of directors of a corporation must consist of at least one individual, and in the case of an offering corporation, not fewer than three individuals (S.115 (2)).

The Articles of Incorporation may set out a fixed number of directors or a minimum and a maximum number of directors (floating board), but each director must be at least 18 years of age (S.118 (1)).

At least 25 per cent of the directors must be resident Canadians (if 25 per cent of the directors is not a whole number round up to the nearest whole number). Where a corporation has less than four directors, at least one must be a resident Canadian (S. 118(3))

Shareholders

Note that all business corporations must be authorized to issue shares. Therefore, Article 6, “The classes and any maximum number of shares that the corporation is authorized to issue,” of the Articles of Incorporation form must be completed (e.g. “unlimited common shares”).

Effective date

When Articles are filed with the Central Production and Verification Services Branch they are endorsed with a certificate and are effective on the date set out in the certificate. Articles cannot be endorsed until all requirements under the Business Corporations Act have been met under the policy of Endorsement as of Right.

An effective date of up to 30 days later than the earliest date the Articles can be endorsed may be requested in writing on a cover letter using bold or highlighted letters, upon submission of the Articles to the Branch. If you are presenting your Articles in person and require a future effective date, you must verbally bring this request to the attention of the counter clerk who endorses your Articles.

Ontario corporation number (OCN)

Upon incorporation, the Branch assigns every corporation a number, which is unique to that corporation. It cannot be transferred to another corporation, nor can a corporation ever change its corporation number. When corporations amalgamate, the amalgamated corporation is assigned a new number.

Corrections to documents

Any changes or corrections made to documents prior to submission to the Central Production and Verification Services Branch may be crossed out and/or added bearing the initials of the appropriate officer of the corporation authorized to make changes. However, no visible corrections are permitted on page 1 of the Articles. Liquid paper corrections are not acceptable; however, corrected pages can be photocopied as long as they bear original signatures. Documents must be clearly legible at all times.

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