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Forming a Private Company

Forming a Private Company

Karen G. Shin August 31, 2010


This article provides information only, not legal advice. If you have a legal problem or need legal advice, contact us at or call us at 604-294-0101.

There are different ways to form a business, other than a company

Before incorporating, you may want to seek advice from a lawyer and an accountant. They can help you decide the best way to set up the company’s “authorized share structure” (explained later) and structure the company for optimal tax planning.

There are basically two types of companies


Under BC’s Business Corporations Act, these is a public company, and a private company. A public company has its shares listed and traded on a stock exchange. A private company is typically a small company with very few shareholders, and its shares aren’t offered for sale to the public. This script only applies to private BC companies.


You need to decide on a name for your company


The name must end in “Limited,” “Ltd.,” “Inc.,” “Incorporated,” “Corp.” or “Corporation,” or the French equivalent to these words.

You must then reserve the name with the Corporate Registry

The easiest way is to reserve online at

Decide who is going to be involved in your company

The shareholders are the owners of the company. The directors have the responsibility and control of the company. They may appoint officers, such as a president or secretary. Typically, the officers handle the day-to-day operations of the company and are overseen by the directors. You can have a one-person company and be the sole shareholder, director and officer.

Are there any requirements for directors?


A private company must have at least one director. A director doesn’t have to live in BC or Canada, but they do have to consent in writing to act as a director. And a director must also provide the Corporate Registry with an address where they can receive documents during standard business hours. If there’s no such office, then the Registry requires the director’s home address.


Also, a director must be at least 18 old and cannot be an undischarged bankrupt or have certain criminal convictions.

The company must have a registered and records office

The registered office for your company is where legal documents can be delivered. The records office is the address where all records for the company are kept. The registered and records offices must be in British Columbia and may be at the same address.


Every company must also have both a mailing address and a delivery address for its registered and records offices. The registered office mailing address is where the company will receive its mail. The registered office delivery address is where the company is given any notices like legal documents. The registered office mailing address may be a post office box, but the registered office delivery address must be a street address that’s accessible to the public during business hours.

You need to decide on an “authorized share structure”

The number of shares your company is authorized to issue to its shareholders is called the authorized share structure. This can be a limited number of shares or an unlimited number.

There are two main kinds of shares: par value shares and shares without par value. Par value shares have a minimum price at which they must be sold. Shares without par value don’t have a minimum price. You can also have different classes of shares, such as common shares and preferred shares, as well as different series of shares within a class of shares. The specifics can be complicated, so professional guidance from your lawyer or accountant is recommended.

To incorporate a company, certain incorporation documents must be prepared


These include:

• an Incorporation Agreement
• the Incorporation Application
• the Articles
• your Notice of Articles


After incorporating your company, it must be organized


This includes preparing the company’s records book, preparing director and shareholder resolutions, issuing shares, and preparing a directors’ register plus a “central securities register” or share register. You may wish to talk to a lawyer about this.

How do you maintain your company?


Certain steps must be taken to keep your company alive. Your company must file an annual report with the Corporate Registry each year within two months of its anniversary date of incorporation. Failure to file an annual report for two consecutive years can result in the company being dissolved. Also, if the company changes its registered or records office, or if the directors resign or change their address, the company must e-file other forms with the Corporate Registry. There are fees associated with most of these filings.

What about incorporating a federal company?

It’s possible to incorporate a federal company under the Canada Business Corporations Act. A federally incorporated company has the right to carry on business anywhere in the country and will have its name protected across Canada. But a federal incorporation usually takes more time, and the corporation is often more expensive to operate than a BC company.

Alternatively, a BC company can carry on business in other provinces

Your private BC company can do this if it takes steps to register itself name extra-provincially in those provinces.


But unlike a federally incorporated company, there’s a risk that an extra-provincially registered BC company may have its application to register its name in another province refused by the Registrar of that other province.

Where can you get help or find more information?


• You can obtain a copy of BC’s Business Corporations Act from any bookstore that sells government publications or download a free copy from


• Visit the Corporate Registry’s website at

• Small Business BC has excellent information on incorporating a company and free guides. Call 604.775.5525 in Vancouver or 1.800.667.2272 elsewhere in the province, or visit

• You can also consult your local library, bookstore and Chamber of Commerce for other books and resources on incorporating a company.


© Copyright 1983-2010 The Canadian Bar Association, British Columbia Branch

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