Articles of Incorporation in Canada

Susan Ward has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Articles of incorporation in Canada are a legal document necessary to the incorporation process and filed with a provincial or territorial government or the federal government. They set out a corporation's purpose and regulations.

Necessary Information

There may be slight differences from business to business, but articles of incorporation typically contain the following information:

1. The full legal name of the corporation from the name search report.
2. The full address of the registered office of the corporation. It cannot be a P.O. box.
3. The number of directors. This can be a fixed number, a minimum, or a maximum.
4. The full names and addresses of each of the founding directors. For a federal or Ontario provincial incorporation, at least 25% of the directors must be resident Canadians. If there are fewer than four directors, at least one must be a resident Canadian.
5. Restrictions on the business activities of the corporation or powers that the corporation may exercise. For example: "The business of the corporation shall be limited to the sales and service of motor vehicles."
6. The classes of shares and the maximum number of each class of share that can be issued. Shares typically are given descriptions such as common, class A, class B, preferred, or other such designations.
7. The rights, privileges, and restrictions of each class of shares. For example, a class of shares may be described as "nonvoting," meaning that owners of the shares cannot participate in activities such as the election of directors. Shares also may have a designated fraction of voting rights, for example, 1/10th of a vote per share. Preferred shareholders normally enjoy a preferential right to dividends and return on capital in the case of dissolution of the corporation. This benefit is greater than that of holders of common shares but less than that of bondholders.
8. Restrictions (if any) on the issue, transfer, or ownership of shares.
9. Provisions or restrictions on the borrowing powers of the directors. For example: "The board of directors is authorized to borrow money or mortgage property as security for any debt or liability of the company."
10. Additional articles as required, such as proxy voting requirements, majority voting rules, etc.
11. Full names and signatures of the incorporators.

Federal Incorporation

Federal incorporation allows your company to operate anywhere in Canada and can give you more recognition if you intend to do business internationally. It also provides national protection for your business name.

Forms are available from Corporations Canada to federally incorporate your business. Corporations Canada is the branch of Industry Canada that administers the Canada Business Corporations Act (CBCA) and the office where all filings, such as articles of incorporation, are made. It has offices in Vancouver, British Columbia; Ottawa, Ontario; Montreal; and Toronto.

Provincial Incorporation

Contact the appropriate provincial registrar if you are provincially incorporating your business. Most have websites, and you'll be able to download the forms you will need. Incorporating provincially means your business will be able to operate only in that jurisdiction and you will have name protection only in that jurisdiction.

Changing the Articles of Incorporation

To add to or modify the articles of incorporation for a federally incorporated company, you must file a copy of Form 4—Articles of Amendment with Corporations Canada. If the amendment involves a name change, you must include a completed name search. If you are changing the registered address of the company, you must include a copy of Form 3—Change of Registered Office Address. If there are changes to the directors, you must include a copy of Form 6—Changes Regarding Directors.

For a provincially-incorporated company, you must file the appropriate amendment forms for the province. For example, in Ontario, you file an Articles of Amendment Form 3 Business Corporations Act with Service Ontario.