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Everything You Need To Know About Articles Of Incorporation

Discover everything you need to know about articles of incorporation and how to incorporate your business without the hassle waiting in lines or working with lawyers.

What are Articles of Incorporation?

If you want to run a business in Canada, deciding whether you want to incorporate or not is an important factor to consider. This article will take you through the many benefits associated with incorporating your business, but first, you’ll need to know and understand what Articles of Incorporation are.

You may have heard Articles of Incorporation referred to as incorporation, corporation, limited company, limited liability, Letters Patent, and Certificate of Incorporation. But that’s just semantics.

Articles of Incorporation are legal documents submitted to the Provincial, Territorial or Federal governments within Canada which are necessary in order to establish your business as a legal entity—they also help set out your corporation’s purpose and regulations.

Benefits of filing Articles of Incorporation.

In general, the most common reasons for individuals to choose filing Articles of Incorporation is by weighing the following circumstances: 

  • Limited Liability: Incorporating separates you as an individual from the business and the liability it holds. In a properly structured and managed corporation, owners should have protection over their personal assets and limited liability for business debts and obligations.  
  • Name Protection: The name you choose to incorporate your business with is protected against anyone trying to use the same name. This then brings legal benefits to the business since this name will be used in all contracts, invoices, negotiable instruments and other goods and services. Having this name protection also helps with marketing and positive brand-building as the business can then have clear distinguishability between its competitors.
  • Lower Corporate Tax Rates: As a business owner, you may have the opportunity to save tax dollars. The amount of tax you can write off depends on the nature of your business and the annual revenue generated but you may also avoid the double taxation that occurs if an entrepreneur doesn’t incorporate their business.
  • Improves Creditability: Being Incorporated legitimizes your business and adds a needed element of professionalism. Some consumers, vendors, and partners prefer to do business with an incorporated company over other businesses that haven’t been properly registered due to an added level of security.

What information do Articles of Incorporation contain?

There may be slight differences from business to business, but the Articles of Incorporation typically contain the following information:

1. Name or number of your business

A corporate name should be a good reflection of your business and distinctive enough that it doesn’t make consumers think of another brand or business. The name selected must include a valid Nuans Name Search Report—this program checks to make sure your name is available and not already trademarked.

2. Full Address of the corporation’s registered office 

Indicate the province or territory in Canada where your registered office is to be situated.

Note: This is not a PO box address.

3. Names and addresses for directors/incorporators for the Articles of Incorporation

You will simply need to provide the accurate names and addresses of everyone involved in the business. 

4. Directors Citizenship Status

If your business is incorporated federally or provincially in Ontario, at least 25% of the directors must be native to Canada. As such, if there are fewer than four directors, at least one must be a Canadian citizen.

5. Share Structure and Provisions

It is likely that your business will be run by multiple people, each owning a different portion of the company (reflected by the number of shares bought). You may choose to have multiple share classes when you incorporate, meaning different groups of shareholders will have different rights and privileges over the company.

  • For instance: Voting shareholders want to actively participate in the decision-making process while non-voting shareholders simply wish to benefit from the company’s long-term growth while staying out of high-level decisions. Common Shareholders profit as the corporation grows and succeeds and will be paid out equally if the corporation stops operating. Preferred Shareholders have a limit on the amount they can earn overtime but get paid back first if the corporation stops conducting business.

6. Any restrictions for business activity or share structure transfer 

As a corporation, you may set out any restrictions on activities that the corporation may carry out. If there are no restrictions required, you can leave this section blank.

Should you incorporate your business federally or provincially?

Choosing between federal or provincial incorporation is all a matter who you choose to do business with, where you choose to do business and how far you want to stretch your business.

Federally incorporating your business allows your company to operate anywhere in Canada and gives you a bit more recognition if you do business internationally. It also provides national protection for your business name

Provincially incorporating your business means you will only be able to operate only in that jurisdiction. This also means that your business name protection is only valid in that same jurisdiction.

How to file Articles of Incorporation?

This is where Ownr comes into play. 

No lines. No lawyers. Ownr helps you digitally incorporate your business in the easiest and fastest way possible. It even provides tailored service details based on the province you wish to incorporate your business.

Ownr will guide you every step of the way at a fraction of the cost of working with a lawyer. From searching for a business name to receiving your Articles of Incorporation by email in one business day, you’ll have your business up and running in no time.

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