How to Incorporate

Once instructions are properly obtained, incorporating the company can be done over the Internet. While most basic corporate registry procedures can be done through the government website (www.corporateonline.gov.bc.ca) with a credit card, lawyers will usually find it convenient to open a BC Online account which will permit full access to all government on-line services and automatic billing for registry fees, etc. Appendix A is a precedent instruction form useful for gathering information and confirming a client’s instructions.

1. Choosing a Name

The first step in the incorporation process is often the selection of a name for the company. It is usually advisable for the client to select multiple name options, as the name reservation process allows three options for a single fee. Submitting names one at a time results in multiple name reservation fees. It is possible to incorporate a company without first reserving a name by using its incorporation number with “BC Ltd.” as its name and then implementing a name change at a later date.

Prior to submitting the client’s name choices to the registry, it is prudent to search the proposed name(s) in the Canadian trademarks database. Also conduct a broad Internet search to see if there are existing similar business names or trademarks which may result in the proposed name being rejected or cause future intellectual property issues for the client.

2. Establishing the Share Structure

The share structure, both in terms of types and characteristics of shares – common shares, preferred shares, rights of redemption, rights of retraction, voting rights, etc. – as well as the number of shares to be issued, are often resolved after discussion with an accountant, who is frequently called upon to create a tax structure that works for the client. As this can be a complicated process, it may also require consultation with a tax lawyer.

3. Drafting the Articles

The Articles of a company are its basic “constitution” and set out the mechanics for calling and holding meetings, the powers of the directors, etc. If the share structure involves multiple classes of shares, the special rights and restrictions attached to those classes of shares will be set out in the Articles. A set of standard Articles is set out in Table 1 of the BCA Regulation and those can be adopted as the company’s Articles. However, a precedent for a more comprehensive set of Articles, as well as samples of special rights and restrictions for various types of share classes, is available in The British Columbia Company Law Practice Manual (looseleaf, The Continuing Legal Education Society of BC).

4. Preparation of the post-incorporation documents

Hitting “submit” on the corporate registry website may serve to incorporate the company, but it must still be organized. Organization refers to the process of preparing the resolutions and share certificates to issue shares, appoint officers, determine the year-end and address various other basic corporate issues. A good description of a typical set of post-incorporation organizational documents can be found in the Company Law chapter of the PLTC practice materials and precedent documents are published in The British Columbia Company Law Practice Manual (looseleaf, The Continuing Legal Education Society of BC).

5. The Registered and Records Office Agreement

If your office is to be the registered and records office for the newly-incorporated company, prepare a Registered and Records Office Retainer Agreement that allows you to change the registered and records offices addresses to a different location than your office under appropriate circumstances such as when you are no longer retained or instructed by your client. If you fail to do so, you will find yourself in the unhappy position of not knowing what to do when it is time to file the yearly annual report. Do nothing and run the risk of the company eventually being struck, with all of its assets escheating to the Crown? File documents that may not contain correct information? Neither option is appropriate. Ensure that this decision is never yours to make by requiring your client to maintain contact with you and provide the necessary funds to you, at least annually. Also ensure that you obtain an executed resolution and notice of change of address to file if you find it necessary to terminate the retainer. A sample registered and records office retainer agreement is attached as Appendix B.

6. Compliance with all incorporation requirements

Sometimes the trickiest part of representing a client is knowing what else has to be done. For example, if Dr. Kildare, a medical doctor with a corporation in Alberta known as “Dr. J. Kildare, Professional Corporation”, wants to move to BC, she will have to obtain the prior written consent of the College of Physicians & Surgeons of BC (pursuant to the provisions of the Health Professions Act), her professional corporation will have to be continued into the jurisdiction of BC and its name will have to be changed to reflect the policy requirements of the BC College, and in particular its Bylaws (which currently permit only corporate names that meet certain criteria, for example “Dr. J. Kildare Inc.”).