Limited liability: potential loss limited to amount invested in the corporation.
Perpetual existence: corporation continues on after the death of the individual.
Tax advantages: accountants will generally recommend incorporation once revenues reach a certain point.
Raising capital: corporate form of business organization easier to raise capital through the sale of shares.
It is more expensive to incorporate.
It is more complex to operate. There is more of an administrative burden in that, for example, annual meetings of shareholders must be held, and the Corporate Registries requires an annual return and filings when changes to the information on file occur.
It is more expensive to operate. As one example, the corporation requires its own tax return separate and apart from its shareholders.
Almost any type of business may incorporate under the Business Corporations Act. However, railway, steamship, air transport, canal, telegraph, telephone, irrigation, mortgage, banking, insurance, loan and trust companies, and other financial institutions, cooperative, Chambers of Commerce as well as not-for-profit corporations are incorporated under different statutes.
There are no restrictions, such as minimum company size, on the businesses that may incorporate under the Business Corporations Act.
One or more individuals may form a corporation under the Business Corporations Act.
Similarly, one or more companies or "bodies corporate" may incorporate a company.
A lawyer is not necessary to incorporate, although they may provide valuable advice. If the incorporator is inexperienced, or the proposed structure is complicated, he/she may wish to consult with legal counsel or other professional advisors.
Registry staff cannot provide legal advice concerning your incorporation.
A corporation under the Business Corporations Act is not required to have a seal. If you wish to have a corporate seal for your corporation, you may purchase one from a legal stationery store or commercial supplier.
Annual returns for all corporations are due by the end of the month following the anniversary date of incorporation/amalgamation.
No, the registered office must include a street address as well as the postal address if different. The purpose of the Registered Office is to have a location for service of a notice or document required to be sent or served on a corporation. In addition, the records of the corporation are usually stored and located at that office. Where it is impossible for a corporation to have a street address (certain remote communities within the Territories do not have street addresses) then a detailed description of the Registered Office location is required. This may be a lot, block and plan or a house number.
No, directors must be individuals.
Subsection 106(1) of the Business Corporations Act, disqualifies from being a director:
- anyone who is less than nineteen years of age;
- anyone of unsound mind;
- a person who is not an individual; and
- a person who has the status of bankrupt.
Recently my company was incorporated in Nunavut under the Business Corporations Act. Can I operate anywhere in Canada now?
No, if you are carrying on business in a Canadian jurisdiction other than Nunavut you must also register with the corporations branch of that jurisdiction.
I only want to do business in Nunavut for a short time. Do I really have to Extra-Territorially register?
Yes, if you carry on business within Nunavut you must register under the Business Corporations Act no matter how long you plan to operate or do business here.