Registering a business has numerous benefits to both the company and its consumers. Potential business owners in British Columbia have the option of registering their business as a partnership, sole proprietorship or a corporation. All three of these options have benefits and disadvantages, but a corporation is often singled out because its benefits surpass the disadvantages.
The shareholders of an enterprise cannot be held liable for the debts or obligations of a company. If the corporation can’t pay its creditors, they have no right to claim their debts from the shareholders.
Ownership of a company is transferred simply by transferring the shares to a new owner. It is as simple as endorsing a part of the share certificate in the name of the new owner.
Also, a company has perpetual existence. The corporation is a distinct legal entity from its shareholders, and this gives it continuous existence. It can continue as a corporation under the law even though the ownership of the company itself changes.
The BC Business Corporations Act governs the incorporation of companies, and it doesn’t stipulate any residency requirements for company directors.
This page highlights the step-by-step process of incorporating a company in British Columbia.
To find out more about the differences between a Federal Corporation and a Provincial Corporation such as a British Columbia Corporation, please read our general Incorporation article.
British Columbia Incorporation Fees
In order to successfully incorporate a corporation in British Columbia, the following fees must be paid:
- Name Reservation $30.00(includes name search report)
- Incorporation $350.00(certificate of constitution)
Also, the fees due to the Registrar of Companies for other services to maintain the company include:
- Certified Record $25.00
- Filing Annual Report $43.39
Let’s now consider the different methods of incorporating a company in British Columbia, that is; BC incorporation by yourself, BC incorporation by a service provider, and BC incorporation by a corporate lawyer.
How to Incorporate a Business in British Columbia by yourself
Undertaking the process of incorporation by yourself is an excellent way to save the cost of hiring a corporate lawyer.
To incorporate a company, you must file the following documents, most of which have to be filed electronically and sent to the Registrar of Companies:
- Reservation of company name with the corporate registry
If the company plans to use a particular name, it must be reserved for that purpose by the Corporate Registry.
- Forming an incorporation agreement
Before the formation of a company, there must be a duly signed incorporation agreement by all the incorporators as stipulated by the Business Corporations Act.
- Establish the company’s articles
All companies must have articles that govern the company, directors, officers and shareholder’s conduct.
- File the incorporation application
The incorporation application must be filed and submitted electronically at Corporate Online at www.corporateonline.gov.bc.ca.
- Review and store the incorporation documents
After the conclusion of the registration by the Corporate Registry, you will receive a certificate of incorporation, a copy of the incorporation application duly certified and a certified Notice of Articles.
How to Incorporate a British Columbia Incorporation Using Online Incorporation Services
If you are not conversant with the law on registration, you can opt for an online incorporation service without the expense of engaging a corporate lawyer. Several online incorporation services are available for this purpose. We recommend the following:
The online incorporation service often provides Web-based forms on their website, which requires a series of questions for the owner about their planned British Columbia Corporation. However, you may be charged some extra fees such as the government fees and the service charge evaluated by an online incorporation Service Provider.
These bodies can provide you with complete corporate records book and corporate tabs, notice of articles, certificate of incorporation, corporate articles, share certificates, registers of directors and shareholders, shareholder and director post-incorporation resolutions, share subscription and director’s consents.
They can also provide advice with regard to forming your British Columbia Company as well as the options of company structures that can suit your needs.
If you also request, you can be given a corporate name search to make sure that you don’t infringe on another company’s name from somewhere else in Canada. Such infringement can evoke a lawsuit against your company for damages or in worst case scenarios, cause you to forfeit the right to use that name for your corporation.
However, such searches may not include the full NUANS search or an electronic algorithm search. Also, they can duplicate the notice of articles, certificate of incorporation, and the incorporation application, and send it by email, soon after incorporation.
Incorporating a Business in British Columbia through a Corporate Lawyer
The most guaranteed method of incorporation is using a lawyer, and this option is also the most expensive. A great lawyer will study the process and ensure filing is done in accordance with the law.
Using a lawyer also has other significant benefits. There are numerous tax considerations which must be thoroughly considered before incorporation. You may also be required to attach restrictions and special rights to the shares so you can establish the financial and business relationship between the shareholders. Also, in order to take advantage of special tax benefits available for corporations, such as the capital gains exemptions from the sale of shares of a corporation, a great degree of care has to be taken to make sure the corporation is correctly set up. If you also plan to transfer an already existing business into your intended company, shares with specific restrictions and special rights must be created to benefit from the Income Tax-free rollover provisions. These aspects are complex and difficult and should be handled by a seasoned attorney.