What are Articles of Incorporation?
The Articles of Incorporation are a legal document submitted to Provincial, Territorial or federal government within Canada which establishes a business within Canada. This formation of a business structure is a separate entity from the individuals who own the business.
There are many words used to describe this document including incorporation, corporation, limited company, limited liability, LLC (this is an American terminology), Letters Patent, and Certificate of Incorporation.
In most cases, a percentage of ownership is required to be either Canadian citizens or Permanent Residents. For example, with an Ontario and Federal incorporation, 25% of the individuals listed as directors are required to be a Canadian or Permanent Residents.
If this circumstance does not fit your parameters of ownership, you may want to consider registering a small business. If within the Province of Ontario, here is the link to complete with us a Master Business Licence which is the alternative to completed Articles of Incorporation.
Why do individuals file Articles of Incorporation?
Within most jurisdictions, there are the 2 options to either Incorporate a business by filing Articles of Incorporation or to register a small business. In general, the most common reasons for individuals to choose filing Articles of Incorporation as the better option for them is weighed by the following circumstances:
- There is liability with the business activity where opportunity for either personal or property injury or loss exists. Filing Articles of Incorporation separates you as an individual from the business and its liability.
- Protection to the business name. When you file Articles of Incorporation, the corporate name within the jurisdiction you incorporate in is protected against someone using the exact same name. If someone uses a similar business name, you may have the opportunity to seek a legal opinion for the infringing business to cancel or change their similar named business.
- When completed Articles of Incorporation, you as a business owner may have the opportunity to save tax dollars. This is dependant on your circumstances and the amount of revenue generated by the business. You may want to speak to your accountant about your specific circumstance.
- Your customer base. If you are dealing with business to business customers instead of individuals, it is becoming commonplace for businesses preference that your business is registered as an incorporated business by filing Articles of Incorporation.
What information is required to file Articles of Incorporation?
Name of Business
- Numbered name (for example: 123456 Ontario Inc.)
- Named Corporation (for example: ABC Holdings Inc.)
Additional information required
- Registered head office
- Names and addresses for directors/incorporators for the Articles of Incorporation
- Directors citizenship status
- Share Structure and Provisions
- Any restrictions for business activity or/and share structure transfer
- Choosing a Business Name
- What is a Nuans Report?
- Incorporating in Ontario
- Incorporating in Canada
- Master Business Licence vs Incorporating
Laura Harvey is an entrepreneur herself as the owner of Ontario Business Central Inc. Her passion has always been about supporting the entrepreneurial spirit and advancement within Canada.
Laura authors in-depth blogs for Ontario Business Central assisting entrepreneurs and business owners to start, manage and grow their businesses. She has almost 30 years of expertise as a corporate specialist and 25 years of being an entrepreneur. Laura has the unique position of supporting a community that she also belongs to. She walks the walk right along with you.
You can find Laura on Linkedin and Twitter.