A corporation (also called "company") is a legal entity that has its own legal personality which is distinct from its owners (called shareholders) and the individuals who manage and run its affairs and business (called directors and officers). The creation of a corporation occurs following the proper filing of Articles of Incorporation (also called a Charter, Certificate of Incorporation or Letters Patent) with the relevant government department or authority.

Every corporation is comprised of shareholders, directors and officers. Shareholders, as the name implies, are the ones who hold (i.e., own) the shares in the corporation. By reason of the votes that are usually attached to the shares, the shareholders control the corporation. If there is only one shareholder, that person has absolute control of the corporation. If the corporation has numerous shareholders, control of the corporation depends on who has a majority of the voting shares. However, the shareholders do not directly manage the corporation. They exercise their influence by electing and removing directors and approving or disapproving major corporate decisions.

There are several features that are unique to a corporation which make it the favoured legal structure for many businesses. These include:

• Limited Liability. A primary advantage to incorporating a business is the limited liability conferred upon its shareholders. The shareholders are not liable, in most cases, for the debts and other obligations of the corporation. A shareholder's liability for the debts of the corporation is limited to the amount of funds the shareholder has invested in the corporation. Creditors only have rights against the corporation itself and not against the shareholders.
• Perpetual Existence. A corporation has the feature of perpetual existence. It is not dependent upon the life of its shareholders, directors and officers and will not be affected by changes in, deaths or retirements of its members since the corporation is considered a separate "person". This advantage allows for the orderly transfer of ownership of the corporation (i.e., its shares). Furthermore, due to its independent legal status, it may own property in its own right, enter into contracts and sue (or be sued).
• Capital Acquisition. A corporation may offer greater potential sources of capital than other business forms (such as sole proprietorships and partnerships). Corporations can issue various classes of shares (in addition to other debt instruments such as bonds) to raise capital, which, typically, is more attractive to investors.
• Tax Advantages. There are tax advantages to incorporating your business, such as lower income tax rates and carrying forward losses of previous years to offset profits in subsequent years, among others.
• Credibility and Prestige. Incorporation may help provide your business with credibility and prestige in its dealings.

On the other hand, incorporating your business is subject to the following formalities:

• Start-Up Costs. The initial start-up costs (i.e., government fees) may be expensive when compared to other business structures (sole proprietorships and partnerships).
• Maintaining of Corporate Records. A corporation is required to diligently maintain its corporate records and hold meetings, elect directors and provide shareholders with certain information.
• Double Taxation. Income generated by a corporation is taxed at both the corporate level and shareholder level. A corporation must pay taxes on its income and the shareholders must pay taxes on the dividends (i.e., profits they receive from the corporation). However, much of this double taxation may be minimized by offsetting the corporation's business expenses (i.e., salaries) with its income.

The question as to where you should incorporate your business involves deciding whether your business should be incorporated under the federal laws of Canada (i.e., a federally chartered corporation) or under the laws of one of the provinces of Canada (i.e., a provincially chartered corporation).

There are advantages and disadvantages to both and there is no one best solution. Deciding which jurisdiction to choose may depend on the answers provided to these questions:

Do you plan on doing business in more than one province?
What percentage of the corporation's directors will be residents of Canada, if any?
Do I want to have 2 annual corporate reports (one for federal and one for provincial)?
Do I want to save money now for incorporation, even though it may cost me more in the long run?

Below are the most common factors that are used to decide where to incorporate.

EXTRA-PROVINCIAL REGISTRATIONS

If you intend on carrying on business only in one province, you may choose to incorporate a provincial corporation under the laws of that province or a federal corporation.

A federal corporation is generally entitled to carry on business anywhere in Canada under its name, subject only to registering in the province where business is carried on. There generally are provincial registration fees (except in Ontario and P.E.I.) that must be added to the incorporation fees of a federal corporation (will be detailed below).

The requirement for a federal corporation to register extra-provincially in the province must usually be satisfied within 30-60 days after starting to do business in the province.

The costs of extra-provincial registration will be discussed below.

PROTECTION OF CORPORATE NAME AND ITS USE

The federal corporation has probably the most stringent criteria in granting the right to use a name as the corporation's legal name. There are many factors that are taken into account by federal corporations examiners. Once the name is approved, it provides a significant amount of legal protection, although less than trademarks.

Most provinces offer very little protection of use, and will grant almost any name provided it is not identical. Moreover, if there is any protection, it is limited to that province, unlike federal corporations which afford Canada wide protection.

For example, a federal corporation with its registered office is Ontario is entitled to carry on business must file certain corporate information with the Ontario government. If the corporation uses a name other than its corporate name, this must be registered as well, under the Business Names Act. The Ontario government charges $60 for a five year registration.

COSTS OF INCORPORATION

One of the most important factors for small businesses when deciding to incorporate is the cost of incorporation. The jurisdiction of incorporation will automatically become criteria for decision because government fees are not the same.

Below are the current government incorporation fees Canadian jurisdictions:

Jurisdiction	Incorporation Fees
Federal	$200
Alberta	$395
British Columbia	$352
Manitoba	$300
New Brunswick	$312
Newfoundland	$300
Nova Scotia	$417
Ontario	$300
Prince Edward Island	$265
Quebec	$308
Saskatchewan	$265

Moreover, if you are incorporating a federal corporation, you must also register extra-provincially. Currently, the provincial fees for a federal corporation which has its registered office in that province are (these are in addition to the federal incorporation fee of $200 indicated above):

Province	Extra-provincial Registration Fee
Alberta	$395
British Columbia	$391 (including name search $39)
Manitoba	$349 (including name search $49)
Newfoundland	$560
New Brunswick	$212
Nova Scotia	$252
Northwest Territories	$300
Ontario	N/A
Prince Edward Island	$260
Quebec	$308
Saskatchewan	$340 (including name search $75)
Yukon Territory	$335

As you can see, in most cases, it is more expensive to incorporate a federal corporation. The one exception is Ontario where there is no provincial registration fee.

IN FACT, IT IS LESS EXPENSIVE TO INCORPORATE A FEDERAL CORPORATION THAN AN ONTARIO CORPORATION IN ONTARIO.

Moreover, there are annual filings. With a federal corporation, there would be 2 annual corporate report filings ($20-40 per year). For provincial corporations there would be one.

DIRECTORS RESIDENCY REQUIREMENTS

Another factor that can be important in deciding where to incorporate is the Canadian residency requirements of each jurisdiction. This is especially relevant to foreigners starting a business in Canada. If these requirements are not satisfied, you cannot incorporate in that jurisdiction.

Below are the current residency requirements for each Canadian jurisdiction:

Federal	at least 25% must be resident Canadians
Alberta	at least 50% must be resident Canadians
British Columbia	None
Manitoba	at least 51% must be resident Canadians
Newfoundland	at least 51% must be resident Canadians
New Brunswick	None
Nova Scotia	None
Ontario	at least 25% must be resident Canadians; However, if there are less than 4 directors, then 1 must be a resident Canadian
Prince Edward Island	None
Quebec	None
Saskatchewan	at least 51% must be resident Canadians; at least one director must be ordinarily resident of Saskatchewan

TIME DELAYS FOR INCORPORATIONS

Another important factor when deciding to incorporate is the time it takes. Some jurisdictions are significantly faster than others. Below are the standard processing delays (in business days) that it takes to obtain a certificate of incorporation following the submission of articles of incorporation. Please note additional delays may be due to name approvals.

Jurisdiction	Standard Processing	Expedited Processing (Additional fees apply)
Federal	5 days	3 days
Alberta	5 days	3 days
British Columbia	10 days	7 days
Manitoba	15 days	6 days
New Brunswick	15 days	N/A
Newfoundland	21 days	N/A
Nova Scotia	21 days	N/A
Ontario	5 days	2 days
Prince Edward Island	15 days	N/A
Quebec *	10 days	5 days
Saskatchewan **	30 days	15 days

Furthermore, there are other issues that you may consider in selecting where you incorporate your business, namely, determining the advantages and disadvantages of each jurisdiction's corporate laws and tax structure. If you require additional information to make an informed decision as to where to incorporate your business we suggest you contact competent legal and tax professionals and discuss these matters with them.

There is no legal requirement that an attorney incorporate your business. You can prepare and file the government forms yourself. You may read the government forms and guides if any to assist you. Or you can choose a service like CorporationCentre.ca to file your application on your behalf. Click here to order with CorporationCentre.ca. You may of course consult with a lawyer who can specifically advise you on your specific circumstances.

Choosing a corporate name is probably the most difficult task of incorporating a business. Every corporation must have an acceptable name at the time of their incorporation because the corporation will then exercise its rights and carry out its obligations under this name. All corporate names must conform to various statutory requirements. You may wish to review the relevant acts and regulations of your jurisdiction.

The most common concern when trying to select a corporate name is that corporate name cannot be identical to or lead to confusion with another corporation or business already using an identical or similar name.

A corporate name is generally made up of 3 parts:

1. Distinctive element;
2. Descriptive element; and
3. a legal ending.

The distinctive element of the name is the part that makes distinctive from other corporations, i.e. what makes them different. The more different or fanciful the name the better.

The descriptive element describes the main activities or type of business of the corporations.

The legal ending indicates that it is in fact a legal corporation and not just a business registration or partnership. You can choose from the following words: Incorporated, Limited and Corporation, or their respective abbreviations: Inc., Ltd. and Corp.

All corporations MUST have a distinctive element and a legal ending to their names. Some corporations choose not to have a descriptive element.

For example, in the name "Tiger Computers Inc." the word "Tiger" is the distinctive element; the word "Computers" is the descriptive element; and the "Inc." is the legal ending.

Below are other examples of corporations' names:

Type of Name	Distinctive Element	Descriptive Element	Legal Ending
Coined Word	Zazoul Golem Entarpa	Video Rentals Management Software	Inc. Ltd. Corp.
Family Word	Wilson J. Fedders Lee	Holdings Restaurant Cleaners	Incorporated Limited Corporation
Descriptive Name	Smart Big and Tall Budget	Systems Clothing Catering	Inc. Corp. Ltd.
Geographic Word	Toronto Ontario Montreal	Perfumes Web Marketing Computer Depot	Incorporated Limited Corporation
General Name	General AAA Neighbourhood	Trucking Rentals Enterprises	Inc. Corp. Ltd.
Distinctive Only	Ashkar BlueCell iFast	- - -	Incorporated Limited Corporation

To increase the chances of your proposed name being accepted or not be in conflict with another business or corporate name or trademark, it is recommended that you choose a name that both accurately describes your business and is as specific and distinct as possible. If your proposed corporate name uses common or popular names, the chances of it being accepted are decreased dramatically. Furthermore, you may be prohibited from using a corporate name, which is either identical or deceptively similar to one that is already used by another corporation or competitor in your jurisdiction.

Restrictions on Corporate Business Names

Your corporate name cannot be identical to or lead to confusion with another corporation or business already using an identical or similar name. The criteria typically used to determine if there is confusion include:

• distinctive character of each name and each of their elements
• visual and phonetic similarity
• similarity in the ideas they evoke
• manner in which the names are used
• notoriety of each name
• actual or potential competition between the corporations
• nature and quantity of goods and services offered
• territory and number of persons served by both corporations

Also, there are certain words that are typically prohibited for business corporations. These include:

• Obscene word or wording
• Co-op, co-operative or any variation
• RCMP
• Parliament Hill
• United Nations
• Red Cross
• Housing
• Association
• Any wording that might be confusing with a government institution
• Engineering, Engineers
• College, University, Institute

Choosing a corporate name is a difficult task since it must conform to a number of legal requirements. Consequently, to increase the chances of your proposed name being accepted, it is recommended that you choose a name that both accurately describes your business and is as specific and distinct as possible. If your proposed corporate name uses common or popular names, the chances of it being accepted decrease. Furthermore, you may be prohibited from using a corporate name which is either identical or deceptively similar to one that is already used by another corporation or competitor in your jurisdiction.

In some cases, you may decide to take over an existing sole proprietorship or partnership which has a name that is either identical or similar to your corporation's proposed name. Under these circumstances, the corporation's Articles of Incorporation may be required to be accompanied with additional documents, such as:

1. a consent signed by the sole proprietor or all the partners;
2. an undertaking by the sole proprietor or partnership that dissolution proceedings will begin before the proposed corporation carries on business; and
3. a declaration by the sole proprietor stating that he/she is in fact the sole proprietor or by a partner stating that the consent and undertaking were signed by all the partners.

To speed up the incorporating process and to permit immediate delivery of the Articles of Incorporation, a corporation can, at the request of the people who incorporate the corporation, be assigned a number as its corporate name (for example, 123456 Canada Inc.). The corporation may then register a trade name and be known to its customers as doing business under the trade name. Although the corporation must be identified by its actual name (i.e., the number followed by Canada Inc. or Ltd.) for all formal and legal matters and relations (e.g., contracts), the corporation may use its trade name for exterior signs, business cards, letterhead, etc.

Even though using a numbered corporation is advantageous since it avoids the delays and expense involved in searching and reserving a corporate name, it is not suited to everyone's needs. In particular, a numbered corporation is not informative in that it does not describe the business in any way. This is one of the major considerations that people take into account when they decide on a corporate name. Moreover, having a numbered corporation may lessen the prestige and credibility associated with your business.

If you decide to incorporate a named corporation using CorporationCentre.ca, then CorporationCentre.ca will obtain on your behalf the appropriate "name search" report that must be included with the Articles of Incorporation.

Typically, most jurisdictions require the filing of Articles of Incorporation and the statutory government incorporation fees. The Articles of Incorporation will be prepared by CorporationCentre.ca following your filling out the order form.

Furthermore, if you choose to incorporate a named corporation, you will be required to file a "name search" report (executed by CorporationCentre.ca) with the Articles of Incorporation.

The government fees will vary depending on the jurisdiction of your corporation. Below is a chart outlining the current government incorporation fees for each jurisdiction.

A registered agent acts as a registered address of the corporation in the province or other jurisdiction of incorporation. The registered agent provides a registered address for the receipt of service of government filings (and in certain cases legal papers) and generally, acts as a local contact for government agencies. The registered agent forwards any such documents and correspondence to the corporation.

Certain provinces require that a corporation incorporated in their territory have a registered agent. Corporations often use a professional registered agent to maintain crucial documents sent from government departments or other agencies separate from other corporate correspondence.

Canadian trademark law recognizes two types of trademarks, “word marks” and “design marks”. As their name implies, word marks consist of a word or a series of letter and words, while design marks are made up of an image/design/logo which may or may not contain words. While there may be overlap, they are considered to be two separate trademark applications. A word mark generally provides the broadest coverage, and prevents others from using the same name. A design mark prohibits others from using a logo containing similar design elements that may be confusing to potential customers purchasing similar products. Applying for both a word mark and a design mark provides the best possible protection and is often recommended by trademark agents if the applicant desires to best protect their intellectual property.