There are different ways to form a business in B.C., each with its own advantages and disadvantages. Companies can officially incorporate, or they can register as a sole proprietorship or a partnership. The decision to incorporate depends on the specific needs of the persons involved and the goals of the company.
Companies are incorporated in B.C. according to the provisions of the Business Corporations Act.
When a company is incorporated, it acquires all of the powers of an individual, as well as an independent existence – separate and distinct from its shareholders – and an unlimited life expectancy. In other words, the act of incorporation gives life to a legal entity known as the corporation, commonly referred to as a “company”. A company can acquire assets, go into debt, enter into contracts, sue or be sued.
Compared to registering a sole proprietorship or a partnership, incorporating a company includes higher startup costs related to professional fees for legal and accounting services. Carrying on business as a company will increase the number of filings you are required to make with the Corporate Registry. For instance, the Business Corporations Act requires all companies to file an annual report and also to file any changes to the location of the company offices and its directors. The company is also required to maintain certain corporate records.
STEPS TO INCORPORATING A COMPANY IN BRITISH COLUMBIA
To incorporate a company in B.C., one or more persons (called “the incorporators”) may form a company by completing the following steps:
- Request name approval and reservation;
- Establish your company’s articles;
- Prepare an incorporation agreement;
- File an Incorporation Application; and
- Keep documents as part of your company’s records
STEP 1: REQUEST NAME APPROVAL AND RESERVATION
If the company intends to use a specific name, that name must be approved and reserved by the Corporate Registry. This is to ensure the company’s name can be distinguished from the names of other incorporated companies and that the name meets specific guidelines established by the registrar of companies.
Approval of a name by the registrar for the incorporation of a business does not provide a proprietary right or interest in the name. The approval is solely intended to prevent names of incorporated businesses from being so similar as to confuse or mislead the public.
This means another business operating in B.C. or elsewhere, that is not incorporated or registered with the Corporate Registry could use the same or similar name as your business.
If it is important to protect your name outside B.C., or from any other unregistered or unincorporated business in B.C., then you should contact Industry Canada for information on trademarks.
The name reservation is for a period of 56 days. The other steps in the incorporation process must be completed and the Incorporation Application must be electronically filed before the 56 day period ends.
A company can also choose to use as its name, the incorporation number of the company followed by “B.C. Ltd.” (“0123456 B.C. Ltd.” for example). If you choose to use the incorporation number as the company’s name, you do not need a name approval and reservation. The incorporation number is assigned by the Corporate Registry at the time the Incorporation Application is electronically filed with the Corporate Registry.
The Name Approval Request form attached allows you to make a maximum of three choices of names, in descending order of preference. Please read the Name Approval Request Instructions sheet carefully before making your three choices. The filing fee for this form is $30.00.
STEP 2: ESTABLISH YOUR COMPANY’S ARTICLES
Every company must have a set of articles. The company’s articles are the rules that govern the conduct of the company and its shareholders, directors, and officers.
For small companies, namely, those that have only one shareholder or where the officers are all family members, the standard set of Table 1 Articles prescribed in the Business Corporations Regulation is usually a suitable set of articles.
The articles must be kept by the company as part of the company’s records.
STEP 3: PREPARE AN INCORPORATION AGREEMENT
Before a company can be formed there must be an incorporation agreement signed by each incorporator. This is required even if there is only one incorporator. Usually the incorporator(s) will also be the shareholder(s) and director(s) once the company is incorporated. The Business Corporations Act specifies that this incorporation agreement must contain:
- The agreement of each incorporator to take one or more shares of the company;
- The signature of each incorporator opposite their full name, along with the date each incorporator signed the agreement; and
- The number of shares of each class being taken by each incorporator.
The incorporation agreement must be kept by the company as part of the company’s records.
STEP 4: FILE AN INCORPORATION APPLICATION
The next step in the process of incorporating a company is to file an Incorporation Application with the Corporate Registry.
STEP 5: KEEP DOCUMENTS AS PART OF YOUR COMPANY’S RECORDS
After you have filed the Incorporation Application and the company is incorporated, the Corporate Registry will send you the original Certificate of Incorporation, a certified copy of the Incorporation Application and a certified copy of the Notice of Articles. These documents must be kept by the company as part of the company’s records.
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