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Branch office registration is also available to you in any Canadian province, and you would not need to have a resident Canadian as a director. For a quotation on branch office registration, please advise of the specific province in which you intend to establish the branch.
Company Formation in British Columbia
Procedures and Steps
Select the Type of Company
You must select which type of company you want to incorporate.
Under the Companies Act you may incorporate one of three types of companies:
- Limited company by shares (limited liability Company);
- Limited company by Guarantee; or
- Unlimited Liability Company.
The first type of company is the one that has the traditional characteristics of corporations and companies. If you think you want to incorporate one of the other 2 kinds of companies, you may want to consider contacting competent professional advice to determine whether you have a need for these kinds of companies.
Select the name of the Company
A British Columbia company’s name must end with one of the following: Limited, Limitée, Incorporated, Incorporée, Ltd., Ltée or Inc.
A British Columbia company’s name may not have the words “Royal” or “Imperial” as part of its legal name.
A British Columbia company’s name may be in English, French or it may have a version in both languages.
Choosing a corporate name can be a difficult task. To increase the chances of your proposed name being accepted, try to select a name that is as distinct as possible, yet accurately describes your business. If your proposed corporate name uses common or popular names, the chances of it being accepted decrease.
Furthermore, you may not be allowed to use a name which is either identical or deceptively similar to one that is already used by another company or competitor in your jurisdiction.
Selection of a Registered Office
The registered office of a company is the location officially designated as such by the company to the relevant government department or authority. The registered office may be a commercial or residential address but should not be a post office box. You will need the complete address.
The registered office is typically the principal place of business of the company (e.g., store, plant or office) and does not have to actually be an “office”. If the company will have more than one place of business, you may select any of the places of business.
Selection of Shareholders
Shareholders are the person(s) who hold (i.e., own) the shares in the company. Whoever holds the shares of a company essentially “owns” the company. By reason of the votes that are usually attached to the shares, the shareholders control the company.
Every private company must have at least 1 shareholder and there may be several (but not more than 50) shareholders. You will need the complete residential address of each shareholder.
Number of Shares
A company may issue as few or as many shares as it deems desirable. The crucial matter is the proportion of shares that is initially issued to each shareholder, rather than the actual number. For example, if there are 2 shareholders and each is to have a 50% interest in the company, it is irrelevant whether each shareholder receives 10 shares or 10,000 shares each, since in either case, both receive an equal proportion of the shares.
Nonetheless, it may be advantageous to issue a larger number of shares. It may facilitate selling a portion of these shares at a later date since each share will have a lower value. Also, subsequent share issues from the company may be more attractive to investors
since the value of the shares would be lower given the larger number of shares that were already issued.
It is not uncommon for the total amount of shares issued to all initial shareholders to equal 1000 shares. However, you may decide to increase or decrease this amount.
Selection of Directors
Directors are the individuals who administer the affairs of the company and make all major decisions for the company.
Every company must have at least 1 director, and there may be several. Only individuals (i.e., physical persons) may be directors of a company.
A British Columbia company DOES NOT require that any of its directors be Canadian residents.
Directors may also be shareholders and officers (see below) of the company. In fact, this is typical in small companies.
You will need to know the following for each director: their complete residential address, whether they are Canadian residents and their profession.
Selection of Officers
Officers are the persons who hold certain senior management positions, such as President, Vice-President, Secretary and Treasurer, among others.
A company must appoint a President and a Secretary.
Officers may hold more than one office or position. For example, an individual may be the President, Secretary and Treasurer.
Officers may also be directors and shareholders of the company. In fact, this is typical in small companies. There is no Canadian residency requirement for officers.
You will need to know the following for each officer: their complete residential address and their profession.
A fiscal year is any 12-month period used by a company as its official accounting period. A fiscal year-end is the official last day of the fiscal year of a company. The fiscal year-end does not need to be December 31 but is typically the last day of the chosen month.
It is not uncommon for companies to select December 31 as their fiscal year-end. However, you may change this date if you have specific reasons for doing so.
Selection of Accountants
Auditors are the professionals who check the accuracy, fairness and general acceptability of a corporation’s accounting records and attests to them. A corporation must generally appoint an auditor to prepare the annual financial statements of the corporation. The auditor should be a chartered accountant and cannot be a director or officer of the corporation. Alternatively, you may appoint accountants to prepare the financial statements of the corporation but who will not act as auditors of the corporation.
Shareholders of a private corporation may choose not to appoint an auditor for any given fiscal year. All the shareholders must agree to this decision. This decision remains valid only until the next annual meeting, where all the shareholders of the corporation must once again consent to not appointing an auditor for the following fiscal year.
The Canada Revenue Agency assigns your company a Business Number when you register for any one of the four major tax accounts you will need to operate your business:
- the GST/HST;
- payroll deductions;
- corporate income tax.
The Business Number is a 15-character identifier of your business. It actually has two parts; a nine-digit number that identifies your business, and a 6-character portion composed of letters and numbers that identifies the particular tax account. The nine-digit number part of the Business Number never changes; the second part of the Business Number will change depending on which tax account the number refers to.
You can think of your Business Number as your business tax ID number because that’s basically what the Business Number is for.
Canada Limited Partnership (LP)
Alternatively, to the Private Corporation you also have the option to register a Limited Partnership in British Columbia.
The main advantage of a Limited Partnership is that, in case:
- partners are not resident in Canada;
- place of business and management is not based in Canada;
- all incomes are generated overseas.
The Canadian LP will be full tax exempt in Canada.
For further information about a Nova Scotia LP, please do Contact Us.
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