Articles of incorporation include specific information for all corporations. They include the name of the business, head office location and restrictions.
This content is originally from a guest post from Goodlawyer, a trusted partner of True North Accounting.
Articles of incorporation are part of a legal document that is submitted to either the provincial, territorial or federal government that registers a business as a corporation within Canada. This business structure separates the business from its owners, creating a separate entity. This is important particularly if the business is being subject to any legal action or debt recovery.
Most provinces in Canada require directors to be Canadian residents, which are referred to as Canadian-controlled private corporations (CCPC). Non-Canadian residents can also be directors of the corporation, however, in most instances, provinces will still require the company to have an attorney for service or someone in the province to be able to receive mail and more, on behalf of the corporation.
What is included in the articles?
Business name
A business name is always included in the Articles. Usually, the business name is a numbered company such as 1234567 Ontario Inc., 1234567 Canada Inc., etc., however, it is possible to have a named corporation, such as ABC Company Inc.
Directors and citizenship
All directors names and their addresses must be included in the articles. Most provinces will require directors to be Canadian residents. However, when this is not the case, most provinces will require an attorney for service or someone in the province to be listed. Residential addresses for all directors are required to confirm residency status. Next are the officers. In an owner-managed business, it is common for the shareholder(s), director(s), and officer(s) to be all the same.
For example, Tom is the CEO of 123456 Ontario Inc. Tom is also listed as a director and a shareholder on the Articles. However, officers manage the operations of the business and therefore, the decision to select them should not be taken lightly.
Head office
The articles must include the corporation’s head office address. The head office of the corporation needs to be located in the province or territory in which the business is being registered.
Restrictions
Any restrictions that apply to the business must be included in the articles. Restrictions generally relate to the company’s share structure and share transfers. Restrictions on share transfers allow shareholders to control who can become a shareholder in the corporation. Having this embedded in the articles makes sure that changes cannot be made without updating the articles with the government.
Incorporation
Incorporation refers to the process used to form a company or a corporate entity. It is how a business is formally organized. Incorporations are legal entities where the company’s assets and income are separate from its owners or investors. Corporations can be found all over the world and are usually identified by using “Inc.” or “Limited (Ltd.).”