Now that you have incorporated, what happens next? What must your
business do after your articles of incorporation have been filed with
the government and you have received a corporation number?
There are some important steps to take after incorporation is
complete. Post-incorporation requirements include but are not limited
1. Corporate organization – create your corporate by-laws and a shareholder agreement
A shareholders agreement is an agreement used to set the conditions
for management of the business when more than one shareholder of a
company exists. It is often used to supplement the governing
legislation, in the case of Ontario, the Business Corporations Act. A
shareholder agreement is not mandatory but is recommended. The main
objective of a shareholder agreement is to prepare shareholders, at the
start of their business relationship, by outlining what each
shareholder’s responsibility is under various circumstances that may
arise in the life of the business. Typically the following topics are
- contributions and responsibilities of the shareholders;
- deadlock resolutions;
- lockdown resolutions;
- dispute resolutions;
- the effect of certain unforeseen events, such as death of a shareholder;
- liquidity creation for unmarketable shares;
- preventing shareholders from competing with the corporation or sharing of confidential information.
All shareholders must sign a resolution accepting the agreement.
All corporations also need to adopt by-laws, which set out the basic
outline for the corporation’s governance. By-laws are operating rules
and they include how officers are selected, how meetings are run, the
duties and obligations of directors and officers, how the organization
operates and basically all the relevant information that outlines for
the organization what it is supposed to do in order to carry on
business. Typically both By-law 1 and By-law 2 are adopted by a
- By-law 1 — a by-law generally relating to the conduct of the business and affairs of the corporation.
- By-law 2 — a by-law respecting the borrowing of money and the issuing of securities by the corporation.
By-laws are to be approved by the shareholders and directors of the corporation.
2. Corporate organization – shareholders, directors, and officers
Pursuant to the Ontario Business Corporations Act, all standard,
for-profit corporations have shareholders, directors and officers. Large
corporations are typically managed by its Board of Directors and day to
day operations are overseen by its officers.
Every corporation must have at least one shareholder. The Articles of
Incorporation will determine the number and class of shares that the
corporation may issue along with:
- any restrictions;
- the right to vote at shareholder meetings;
- the right to receive a dividend when declared by the directors, and;
- the right to share in the allocation of the corporation’s assets in case of dissolution.
The shares are issued via the share certificate, a legal document
that certifies ownership of a specific number of shares in a
corporation. The names and address of shareholders along with the class
and number of shares are recorded in a Shareholders Register. Any
transfers of shares including transferor and transferee information are
recorded in a Share Transfer Register. Tracking shares issuance is
achieved via a shareholders’ ledger. Shareholders are required to hold
an initial organizational meeting in which they will determine the
number of directors and appoint them, confirm the by-laws, appoint the
auditor and approve, ratify and confirm all the decisions made and
measures taken by the Board of Directors of the Corporation. Resolutions
are used to institute all of the above actions.
Directors are appointed by the shareholders by an ordinary resolution
at a general meeting. The names, addresses, and election dates are
recorded in a Directors’ Register. Directors must hold and document an
initial meeting of directors, also called the organizational meeting.
The purpose of this meeting is to confirm that all corporate records
required to be prepared and maintained by the corporation are kept in a
book designated as “The Minute Book”. The Corporation’s articles of
Incorporation, endorsed with a certificate, are placed in the minute
book. Directors will approve the location of the minute book, the
registered office address, the forms of shares, the shares issued, the
adoption of registers and the adoption of a corporate seal. They will
designate and appoint the officers, approve by-laws and financial
year-end, create corporate bank accounts and appoint or waive the
appointment of an accountant. Similarly, resolutions are used to
institute all of the above actions.
Officers are responsible for the day-to-day operations. The names,
position held, and election dates are recorded in an Officers’ Register.
A “general notice of interest” resolution must be signed by officers to
make their positions valid.
3. Corporate filings – Form 1: Initial Return/Notice of Change
Pursuant to the Ontario Business Corporations Act, an Initial Return
must be filed with the Ministry of Government Services within 60 days of
incorporation, or, as a Notice of Change, within 15 days after the
change(s) take place. This filing will allow you to:
- set out the registered and mailing office address;
- appoint, change or remove officers and directors of the corporation;
- change the registered and mailing address of the corporation.
All information pertaining to directors and the five most senior
officers of the corporation must be reported. Once filed with the
Ministry of Government Services, the initial return will form part of
the minute book.
4. Corporate filings – Form 2 under the Business Names Act
Pursuant to the Ontario Business Names Act, if you would like to use
any name other than your corporation name you must register a trade
name. A trade name is any name different than your corporation name for
which you carry on business. It’s important to recognize that a trade
name is not a trademark. Some basic principles to keep in mind when
registering a business name:
- business names registered under the Business Names Act are “not
protected” from use by other entities. Anyone else can use the exact
same name to register a completely different business;
- there is no limit on the number of business names that can be registered for each corporation;
- business names expire every five years and must be renewed.
If you choose to file a business name registration, the Ministry of
Government Services will provide a Master Business License as proof of
registration. The Master Business License will also form part of the
minute book. Also keep in mind that if a business name is adopted, you
may have to list the corporate name together with the business name(s)
in legal contracts or documents. Eg. ABC Group Inc. carrying on business
as ABC Dry Cleaners.
5. Corporate filings – extra-Provincial registrations
Pursuant to the Extra-Provincial Corporations Act, if you
would like to conduct business in any other province or territory, you
must register extra-provincially in the province in which you will be
doing business. The extra-provincial registration process varies per
province in terms of the necessary steps to take as well as the fees
that may apply.
In order to register the company in other provinces successfully, you
need to order a NUANS name search report or provincial name search
report (depending on specific requirement in each province) in order to
determine the availability of the company name in that province. Keep in
mind thought that it is possible that your corporation name already
exists in other provinces, unless federally incorporated.
Registering your business extra-provincially will allow you to carry on the following activities in that jurisdiction:
- hire employees;
- have facilities or offices;
- open up bank accounts.
If the extra-provincial registrations are domestic (within Canada),
you are not required to file annual returns in the extra-provincial
provinces, filing the annual return for your home province will suffice.
The filed extra-provincial registration(s) will also form part of the
minute book you are required to maintain for your corporation.
6. Corporation supplies
Legal corporate supplies are purchased for every new company that is
incorporated. Once a certificate of incorporation is received, the
company shareholders are required by law to keep an up-to-date minute
book (containing your formal corporate documentation) usually at the
corporation’s registered head office.
A minute book typically consists of letter or legal sized pages
containing a specific set of indexes designed to organize, record and
store all pertinent corporate records and information. The documents in
a minute book typically include Articles of Incorporation, registers of
directors & officers, securities documents, bylaws, minutes of
meetings and copies of government filings.
Typically, the minute book will have some sort of identifier, whether
it’s a name plate or lettering embossed right on the cover or spine
that will identify the corporation.
Along with your minute book, if you have adopted a corporate seal you
will need to purchase an embossing seal, which is used to emboss the
corporations name on any legal documents.
Standard minute books often include the purchase of precedent bylaws,
a set of documents that will help you set out how the corporation will
govern itself, organizational resolutions, necessary for organizing your
corporation and share certificates according to the share structure set
out in the incorporating documents.
Corporate supplies may be ordered individually or as part of a
package, either with the incorporation/company formation process or
separately. If at any time your corporation changes its legal name, you
will be required to purchase a new corporate embosser highlighting the
new company name.
7. Annual requirements
Once the company formation has taken place, there are Annual
Upkeep/Compliance requirements that are necessary to ensure the company
remains in good standing with the Ministry of Government Services. A
company must hold an annual shareholders’ meeting no later than 6 months
after the company’s year-end.
All Ontario and Foreign Corporations with a licence in Ontario under
the Extra-Provincial Corporations Act are required to file an Annual
Return. Annual Return Filings are mandatory. They are required to ensure
that all corporate information on the Ministry of Government Service
corporate public record is up-to-date. You will be required to verify
address information and officers and directors information on these
Annual corporate documentation that needs to be prepared includes:
- annual review document;
- annual return filing;
- annual minutes and applicable resolutions;
- monitoring report of any business names and partnerships for renewal, and;
- all applicable agent filings and/or agent for service documents, if necessary.
At the annual meeting, the appointments of directors, officers and
the auditor are discussed and approved. The company’s financial
statements are also acknowledged and approved.
8. Organizational changes
In addition to company formation and annual requirements, there are
organizational changes that may take place throughout the life of a
corporation. Things such as:
- corporation name change;
- change in share structure;
- change in officers, directors or head office address;
- an amalgamation, continuance to another jurisdiction or dissolution;
- addition/removal of extra-provincial registration and trade names, and;
- share transfers and so on.
These changes, supported by various forms and requirement documents,
may require amendments to government filings, corporate resolutions,
shareholders, directors and officers registers and shareholders’
9. Business licenses and permits
Depending on the type of business and industry you are in, or the
location/municipality, your business may require various licences and
permits from different levels of government. You will be required to
obtain all required licences and permits in order to provide day-to-day
services. You may contact the appropriate government office, or the
municipal or regional offices to find out if your business requires any
special licensing. If you industry has an association or support group,
they often will have information relating to any special requirements
for you business.
10. Government tax accounts
Upon incorporation, the Ministry of Government Services will
automatically send the information to the Canada Revenue Agency in order
for you to obtain your Business Number (BN). A business number is a
9-digit number assigned by the federal government to allow your business
to register accounts with the Canada Revenue Agency, such as an HST
account, Payroll account, Import/Export Account, WSIB Account.
- HST Account — most companies with taxable sales of more
than $30,000 over any four or fewer consecutive calendar quarters, must
register for and collect the Harmonized Sales Tax (HST) in Ontario. All
taxi and limousine operators must register for HST regardless of their
- Payroll Account — you must apply if you will have employees and are paying salaries and/or wages.
- Import/Export Account — If you import goods into Canada or export goods to other countries, you should register.
- WSIB Account – to provide workplace insurance coverage for all employees where applicable.