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Did You Know
You can search registries for already-existing trademarks through the Canadian Trade-marks Database. Read more
Incorporation
An incorporated business is a distinct legal entity separate from its shareholders (owners). Businesses can be incorporated at the provincial, federal and/or international level. This structure theoretically limits the liabilities to the corporation and the debts, liabilities, obligations and acts of the company do not extend to the shareholders.
A basic corporate structure includes shareholders, directors, officers, employees, and an advisory panel. Shareholders also hold the exclusive right to elect directors.
Why is it important?
The legislation to which your company must adhere to is different under each level of incorporation. In terms of shareholders, there is no limit to the number an incorporated business can have, but the rules on how to run a company change once you have fifty shareholders.
A corporation is closely regulated and it is best to consult a lawyer and accountant before incorporating and gathering financing from shareholders.
Resources
- BC Business Registry: Incorporate Your Company
- Canada Business: BC Corporate Online
- Industry Canada: Guide to Federal Incorporation
- New Ventures BC: Video Replay: Corporate Structure with Lucas & Hodgins
Shareholders' AgreementsA shareholders' agreement is a legal document typically created when a business is incorporated or when the shareholder structure changes. It outlines the relationships between shareholders as well as the shareholder and the company by defining their rights and restrictions. Learn more |
Capital StructureA company's capital structure is how it finances its overall operations and growth through a mix of debt and equity financing. It is commonly referred to as a company's debt to equity ratio. Learn more |
Advisory BoardAn advisory board is an informal group of individuals from outside the company that provide guidance and advice to the board of directors and management of a corporation. They have no authority to vote on corporate matters. Learn more |
Board of DirectorsA Board of Directors is a group of individuals elected by company shareholders to manage and oversee the affairs of a company. The number of directors, how the directors are elected and specific details about how the board governs are laid out in a legal document such as the shareholders agreement. Learn more |