How To Incorporate Your Okanagan Business
Incorporating a company with the B.C. Corporate Registry, otherwise known as the registrar, is a complex process with numerous steps:
Step 1: Choose a Company Name
A company may be incorporated using a numbered name or by reserving a name with the registrar. In order to reserve a name for a company, a name reservation must be electronically submitted to the registrar and the prescribed filing fee of $30.00 plus the service fee of $1.68 must be paid. When submitting a name reservation up to three choices for a name may be submitted. A company name must include a distinctive element followed by a descriptive element followed by one of the prescribed corporate designation words identifying the name as a corporation. Care should be taken in selecting a company name so as to avoid the costs of filing multiple name requests.
Step 2: Enter into an Incorporation Agreement
Before a company may be formed there must be an incorporation agreement signed by the person(s) or company incorporating the company (known as the incorporator(s)). This is a requirement even if there is only one person incorporating the company. It is important to note that the incorporator acts as the first shareholder of the company and must take up share(s) in the company upon incorporation. The Business Corporations Act specifies the information that must be included in the incorporation agreement. The signed incorporation agreement must then be kept in the company’s records book.
Step 3: Establish Company’s Articles
Every company must have a set of articles that conform with the requirements of the Business Corporations Act. The articles of the company are essentially the rules that govern the conduct of the company, its shareholders, its directors and its officers (if applicable). The Business Corporations Regulation has a standard set of articles set in Table 1 which contains very basic rules and regulations for a company. Alternatively, an incorporator may adopt any other form of articles they wish upon incorporation. Individuals incorporating a company should take great care in selecting the appropriate set of articles for their company, including the share structure of the company (see more details on share capital below). The articles must be signed by the incorporator prior to filing the incorporation application with the registrar. The articles must also be kept in the company’s record book.
Step 4: Establish the Share Structure of the Company
The share structure of a company means the types, classes and series of shares, and the limits, if any on the number of shares of those kinds, classes and series of shares that a company is authorized to issue. In addition to the foregoing, shares often have special rights and restrictions as designated in the company’s articles. The authorized share structure of a company may consist of shares with par value, shares without par value or both kinds of shares. Shares with par value limit flexibility in establishing the issue price and the capital of a share. Shares without par value provide more flexibility when issuing shares; however, they may also result in other potential problems. All these issues must be addressed prior to incorporation and should be carefully considered as the authorized share structure for a company may result in adverse tax consequences in the future.
To discuss the benefits of a carefully planned authorized share structure for a business corporation please contact a lawyer at Business Law Group.
Step 5: Establish the Directors of the Company
The directors are the mind and management of a company. A company must have at least one director at all times. The registrar requires that the mailing and delivery address of all directors be submitted to the registrar in connection with the incorporation application.
Step 6: File the Incorporation Application with the Registrar
An incorporation application must be filed electronically with the registrar and the prescribed filing fee of $350.00 plus the service fee of $1.68 must be paid. This application requires the following information be provided:
a) Name Reservation Number, if any;
b) Incorporator Information including mailing and delivery address;
c) Completing Party information including a mailing and delivery address;
d) Director Information including mailing and delivery addresses for each director;
e) Registered and Records Offices information;
f) Authorized Share Structure, including the types, classes and series of shares, the authorized number of shares for each class and/or series, and whether there are special rights and restrictions on each class and/or series of shares;
g) Email address for the company; and
h) Company password.
After the incorporation application has been filed with the registrar, an uncertified copy of the Incorporation Application will be generated. The certified Incorporation Application, certified Notice of Articles and certified Certificate of Incorporation will be issued to the incorporator approximately one week after the incorporation. The company is considered to be incorporated on the date and time that the incorporation application is submitted to the registrar.
Step 7: Organization of the Company
After the company is incorporated, the basic affairs of the company must be organized which includes issuing shares to the incorporator, transferring the incorporator’s share(s) to the first shareholder of the company (if applicable), issuing shares to any other shareholder(s), having the director(s) consent to act as director and appointing officer(s) (if applicable). The corporate records book (often referred to as the ‘minute book’) must be organized and necessary constating documents must be generated including:
a) the first consent resolutions of the directors in lieu of a meeting of the directors which will authorize the issuance of shares, appoint officer(s), if applicable, and conduct any other business as may be required under the Business Corporations Act;
b) the first consent resolutions of the incorporator(s) in lieu of a meeting of the incorporator(s) which will determine the number of director(s) the company has, authorize the appointment of the director(s), waive the appointment of an auditor for the company for the current fiscal year (if applicable) and conduct any other business as may be required under the Business Corporations Act;
c) consent for all directors of the company as required under the Business Corporations Act;
d) share subscriptions for all shareholders;
e) compile a securities register for the company which details all of the shareholders of the company including the number of shares and class of shares each shareholder holds;
f) compile a register of director for the company which details all of the directors and officers (if applicable) of the company including the date of appointment and office held (if applicable);
g) generate all share certificate(s) required; and
h) compile all company records into a corporate minute book.