In today’s article, A Step-by-step Guide to Federal Incorporation in Canada, I complete my 3 part series on Federal Incorporation. As a new business owner with a limited budget, I used Google as my oracle to help me understand how to navigate the waters of incorporation. With Google’s help, I was able to find the easiest and most cost-effective way forward. As part of my journey to incorporate DAMGeeks Ltd. as I found that doing so as a Federally Incorporated entity was the most cost-effective way for me to do so. To learn more about how I made this decision see my post on incorporation options – Incorporation options in Canada – What is right for you? 

You must complete a NUANS Search when if you wish to incorporate a named company. For help with this process look at my walkthrough on how to complete a NUANS Search – Nuans Search – What’s in a name? Completing this step before you start your Federal Incorporation makes the process easier.

Getting Started

If you have decided to incorporate and have already completed your NUANS Search or are just looking to have a numbered company, you are ready to go. Follow the link below to get started:

http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs06939.html

On this website, you will note there are two ways to incorporate: online or by mail. Online is $50 cheaper, is faster, and allows you to also register in up to 5 provincial jurisdictions as part of a single process. This is the way I chose to move forward. Read this Corporations Canada registration landing page and then click on the Incorporate button to start the process.

Corporation Type

Having clicked on Incorporate, the next page asks you to choose the type of corporation that you wish to register: business (Basic or Custom) or Not-for-profit. Select the option appropriate for you. If you are registering a numbered business then Basic is the way to go. For a named corporation select Custom. To register as a Not-for-profit, select that option. For DAMGeeks Ltd., I selected Custom incorporation. To proceed, click on the Next button to proceed with Federal Incorporation.

Contact Information

The first step you complete when incorporating federally is to provide your contact information. After you complete the form with your contact information, click on Next to proceed to the next step of the journey.

If you need to step away at any time, you can always click on the Save and Exit option to save your progress. 

Corporation Name Options

Then select your corporate name option: Word name, Use a pre-approved name, or Numbered name.  If you are prepared because you completed your NUANS Search and have your name approved already as I did you should select the Use your name already approved by Corporations Canada option.

Enter your Request ID and Confirmation/Client Number from your Nuans Search and then select your Province or Territory of Registered Office – this should be the province or territory where the corporation will be located. For me this was Ontario.

Classes of Shares

You will next define the classes of shares available; I selected two and used the predefined classes as they work for me. You will also set any necessary restrictions on the transfer of shares. Unless your company will be publicly traded you need to have restrictions in place on the transfer of shares to remain compliant with Canadian laws. Should these restrictions not be in place you will need to comply with a host of rules governing share transfer and tracking – I used the predefined text for restrictions.

Corporate Directors

You will define the minimum and the maximum number of directors – I chose 1 and 10.  You also define any restrictions on the types of business that the company can participate in. I chose none; it is good to leave your options open.

Other Provisions, Incorporators and Effective Date

Next, you define any other provisions you wish to include. Options available are None or to select from the available options which include: Restrictions on securities transfer, Borrowing powers of directors and inserting your own text. If you are going to insert your own text I suggest you speak with a lawyer to get it right. I elected to include the Restrictions on securities transfer and Borrowing Powers of directors. You must add details on the Incorporators, use full legal names, and set the effective date for incorporation to complete this step.

After completing all of this you are ready to select Next once more to go to step 3 where you are to print, review and sign the documents of incorporation the system generates for you; you must keep these on file going forward.

Having completed this you click Next again. In step 3 you review the details you have supplied and validate that they are correct. You then print and sign the documents. If there are multiple incorporators, they must all sign the Articles of Incorporation. You do not send the signed Articles to Corporations Canada but you must keep them on record and available should you be audited. The Articles are necessary for opening bank accounts and copies are requested by accounting firms that you might work with. Ensure that you are honest and accurate when filling out the forms as misrepresentation can be costly – up to $5000, 6 months in jail or both.

Registered Office Address

Now that you are halfway through this Step-by-step Guide to Federal Incorporation in Canada, I hope you agree that it is not all that difficult. Step 4 or the process asks you to supply the initial address of the corporation. You must also indicate if you would like to receive annual reminder notices and if you elect to receive them, you must provide a valid email address to which notifications can be sent. Additionally in this step, you will register all members of your Board of Directors including contact details for each of them and indicate which of these initial members will be signing the documents of incorporation. Having entered the required information, you click Next to proceed to step 5. 

Step 5 has you review the details you have supplied in the previous step, print and sign the created documents. As before, if there are multiple incorporators, all must sign the Registered office and directors forms. Having completed this step, click Next to continue.

Reminder Notices

In step 6, you can choose to receive reminders to complete your annual filing by email. The form provides you with the option to add additional email addresses that should also receive reminders for the annual filing. Complete your required annual filing either online or by mail. Online filing costs $12. Email or postal mail filing costs $40. You can guess what I chose to do; that’s right online all the way! Having a current and valid email address to receive reminders is important to not forget to submit annually and have your corporation remain current.

Once everything is complete for this step you click on Next once more to proceed to the last step before payment.

Provincial Registration

Step 7 is where you complete your extra Provincial registrations. Most provincial registrations require you to pay an additional fee. Registration is free for the Province of Ontario, where I registered.

Provincial registration requires you to provide address information for your corporation. This information should match that which you supplied for the Federal incorporation in step 2. You will also select your preferred language of communication; I chose English. Supply information about a Chief Officer in Ontario and enter their address information in the form. Additionally, you will also enter the name and address information of the person authorizing the filing of the application. Lastly, you will provide contact information to which Ontario will send the Incorporation Documents when ready.

Upon clicking on Next you will arrive at Step 8, Proceed to payment which will direct you to the payment screen where you can use your Credit Card to pay for incorporation.  When payment is complete, everything will be processed and within a couple of days. You will receive confirmation of your request for a Certificate of Incorporation by email. If Corporations Canada finds no issues with your application confirmation of registration should follow in a few days for both your new Federal corporation and your Ontario registration.

Congratulations, you are incorporated! Hopefully, you found this step-by-step guide to federal incorporation in Canada useful. With your incorporation now completed, there are many more things to do. Registering with the CRA for an HST number and payroll account are two. With this first important step, you are well on your way!

What’s Else?

If you’re not ready to incorporate and need to understand some of the options for incorporation in Canada, look at my post – Incorporation options in Canada – What is right for you? In it, I explore some options for incorporation in Canada as a resident of Ontario. Unsure about NUANS Search and NUANS Reports, look at my post – Nuans Search – What’s in a name?

If you need to complete your Annual return for your Federal Incorporation or would like to review costs and eligibility requirements follow this link:

https://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs08732.html

DAMGeeks Ltd. was incorporated on July 11, 2019. Looking back, I can’t say that I would change things. Completing the process myself was not overly complex as the tools supplied by the Canadian government are easy to use. Saving a little cash and understanding more about the process by doing it myself outweighed any challenges encountered.

I hope this helps you on your journey!

It should be noted that Corporations Canada and the Canadian Government update information and processes on their websites regularly. This guide is as accurate as possible but some pages may have changed since it was published.