How To Register a Federal Corporation in BC

In this article, we focus specifically on how to register a federal corporation in BC. By the end, you’ll have more information about incorporating federally and why you may want to choose that over registering in BC.

Incorporating Federally

To start a business in Canada, you have the option to incorporate federally or provincially.

If you decide to incorporate federally, your company will follow the federal jurisdictions. This means it will work under the Canada Business Corporations Act (CBCA) regulations.

As such, your business gets to have a national identity. Incorporating federally opens up options for extra-provincial or extra-territorial corporation registration rather than registering for extra-provincial licenses individually (You can do that, but it doesn’t guarantee to have the same business name).

Thus, if you have intentions to spread and operate nationally, registering your business as a federal corporation is the way to go. In this case, you’ll only need to fulfill a few extra-provincial registration requirements for the province you’re expanding to.

Steps of Registering a Federal Corporation in BC

In British Columbia, registering a federal corporation should be straightforward. According to the outline governed by the CBCA, there are a few steps you need to follow.

Below is a simple breakdown of each step to guide you through the process.

Step #1: Naming the Business

Choosing a name for your corporation is the first step when incorporating a federal company. Typically, a company’s name needs to have a distinctive element, which is the portion of the name that makes it stand out from other companies. 

The second part is the descriptive element, which describes the type of business activity or services your company offers. As for the last part, it should be the corporate designation or legal ending (Inc., Ltd., Corp., etc.).

If your business name of choice meets the naming requirements, it should get approved unless it’s similar or identical to an existing business. Therefore, it’s necessary to choose a unique name that doesn’t cause a mix-up of this type.

Step #2: Getting a Name Pre-Approval (Optional)

Before proceeding with the process, you have the option to get a pre-approval for the proposed corporate name. This step helps ensure that the name meets the criteria set by Corporations Canada. Yet, it’s not mandatory.

To do so, you need to order a Nuans report through the Newly Upgraded Automated Name Search system. This report confirms that the name you chose isn't similar to other existing corporate names.

Step #3: Completing the Articles of Incorporation

The articles of incorporation is a fundamental document that outlines some key information about your company. Before getting into this step, you need to make a few decisions regarding your business, including:

• The registered office address where legal documents and government communication will be directed.

• The company’s share structure (the number of shares, their classes, etc.)

• The minimum and maximum number of directors for your federal corporation.

• The scope of your company's activities and if there’s a specific type of business your corporation should be restricted from engaging in.

• Any other restrictions related to the needs and goals of your federal corporation.

Step #4: Submitting the Application

Before proceeding with the next step, you also need to complete the extra-provincial registration. That’s in case you’re planning to have company offices in other provinces.

Of course, you can do that later on. However, getting it over with during the incorporation process can give you a discount of up to 50% on the registration costs.

That said, with the articles of incorporation and all the other necessary documents completed, the next step is submitting the application to Corporations Canada. You can do it online or by mailing the documents to the designated address.

As for the fees, they vary depending on the type of company you want to incorporate. In general, the basic fee starts at $350.

Upon approval, you should receive a Certificate of Incorporation, officially recognizing your business as a federal corporation.

Step #5: Obtaining Corporate Seal and Minute Book

Although a seal isn’t mandatory, most companies prefer to use it for embossing their names on legal documents. So, if you choose to have one, this stage is the perfect time to do it.

That said, it’s a requirement that all corporations maintain certain records. All the documents are usually kept inside a binder known as a corporate minute book.

Generally, there are no strict rules stating the minute book type. Thus, you can maintain your own minute books as a company owner. Yet, it’s advisable to store such records professionally with a lawyer’s help. This ensures maintaining regular updates consistent with the current law.

In general, a corporate minute book contains the following:

• The Articles of Incorporation

• Minutes of shareholders’ and directors’ meetings

• Corporate by-laws

• Resolutions of shareholders and directors

• Registers (directors, securities, share transfers, etc.)

• Copies of government forms and unanimous shareholder agreements

Step #6: Getting Additional Permits and Licenses

After getting the legal certificate, it’s time to focus on obtaining the licenses and permits necessary for your business operations.

Before we get to that step, it’s crucial to know that there are some industry-specific regulations that you need to be aware of. Thus, you may need to consult a lawyer for legal advice.

That being said, here’s what you may need to register for:

• A federal Business Number

• A provincial sales tax account

• A provincial Employer Health Tax and Worker's Compensation

• Any other industry-specific permits and licenses needed

Benefits of Incorporating Federally vs. Provincially

So, what makes incorporating your business federally a wiser choice than provincially? Here are a few of the benefits your business can enjoy.

1. Trademark Protection: A federally registered trademark grants exclusive rights to use that mark nationwide, protecting your brand name across Canada.

2. Flexible Share Structure: Federal corporations enjoy a more flexible share structure than provincially registered businesses, offering multiple options for share classes, voting rights, etc.

3. Recognition and Global Reach: Federal incorporation enhances the credibility and recognition of your business on a broader scale. This strengthens the confidence of investors, clients, and partners.

Limitations to Incorporating Federally

Despite its advantages, incorporating federally also has some limitations.

1. Higher Initial Costs: Federal registration involves higher initial costs than its counterpart, which may be a limitation for businesses on a tight budget. As a business owner, you must consider the various expenses of filing fees, name searches, etc.

2. Dual Regulations: While federal corporations adhere to federal regulations, they still need to follow some provincial laws when it comes to registering business names and getting provincial licenses.

3. Provincial Restrictions: Certain industries may still be subject to provincial restrictions. In all cases, understanding these regulations is a crucial step for moving forward with your business.

FAQs

Q1: How long does the registration process take?

A: Typically, it should take less than three business days for a numbered corporation. As for a named one, the process takes between four to seven days. That’s in case there’s no problem with the name chosen.

Q2: Can a federal corporation in British Columbia operate internationally?

A: Yes, but compliance with foreign regulations is still necessary for carrying on with global business activities.

Q3: Can I complete the incorporation process without the help of a law firm?

A: Yes, you can. However, a law firm can assist you in preparing the documents needed, the Articles of Incorporation, and any other necessary forms. A law firm can also help you complete the NUANS process and detect any mistakes in the information provided.

Q4: Is it possible for a non-resident living in Canada to set up a corporation?

A: Yes, a business owner doesn’t have to be a Canadian citizen to open a business in Canada. However, the company will be subjected to a higher tax than those owned by a resident.

Q5: Can I change my business name after federal incorporation?

A: Yes, you can. Corporations Canada allows for name amendments. Just like naming your business from scratch, changing the name also requires checking the availability of the name to avoid conflicts with existing companies.

TL;DR

• You have the option to incorporate your business either provincially or federally.

• As a first step, you need to choose a name for your business and make sure it’s available for use.

• Completing the Article of Incorporation is essential for registering and maintaining your business.

• You can submit the registration application online, in person, or by mail.

• It’s essential to obtain the additional permits or licenses your business may require.

• Incorporating federally has many benefits, from trademark protection to global reach.

• Maintaining your business minute book professionally may require the assistance of a lawyer to ensure accurate and up-to-date records.

• There are some limitations to federal incorporation to keep in mind, including the cost and special regulations.