If you're looking to start a business in British Columbia, you'll need to take the time to incorporate. Therefore, it's essential to understand the process of incorporating in BC and any additional steps or requirements that may be involved.
Our guide below is designed to help you understand what incorporating in BC involves, the benefits and drawbacks of incorporation, and provide valuable tips for making the process easier.
What Is a Corporation in BC or Canada?
A corporation is a legal entity with all an individual's rights and responsibilities under Canadian law. Incorporating your business can be accomplished at either the federal or provincial level, or even both, depending on the purpose of the company you are forming.
Since corporations have a distinct existence from their owners, they can enter into contracts in their name, sue and be sued in court proceedings, and carry forward losses or earnings from one fiscal year to the next for taxation purposes. In sustaining its independent nature, a corporation also provides owners personal liability protection from any debts incurred by the organization.
Why Should You Consider Incorporating in BC?
Incorporating a business in British Columbia benefits entrepreneurs and small business owners. Limiting personal liability and reducing taxes are primary motivators, but additional arguments exist for considering them.
Companies that have incorporated status may be able to attract more investors when they go to sell their business or need additional capital. Owners also benefit from the credibility associated with being an incorporated entity, which could open doors to new opportunities.
Additionally, it's easier for a corporation to set up bylaws and structures its operations than relying on verbal agreements among partners. All in all, incorporating a business can provide many advantages for the growth and development of a successful venture.
Canadian Residency Is Not Required
Incorporating a business in British Columbia is an attractive option for many international entrepreneurs as Canada's most westerly province does not require director residency or citizenship. It is, of course, necessary to provide an address in BC, even if this is only to take mail delivery so that a virtual office may be used.
This eliminates the need for businesses to partner with a Canadian director and makes BC an especially appealing choice to those from outside Canada during the incorporation process.
Fewer Fees and Process Requirements
When incorporating a business in BC, you can do so either federally or provincially. When choosing to incorporate federally, you must file documents and pay federal and provincial government fees.
To avoid such extensive paperwork and reduce fees associated with the process, it is recommended that businesses choose to incorporate provincially. Doing so will not hinder your ability to extend your operations into other provinces or countries, as you must register your corporation in those jurisdictions for legal purposes.
Should You Choose to Incorporate Federally or Provincially in British Columbia?
Two paths are available if you're looking to incorporate in Canada: provincial and federal. Let's explore how these options differ from one another.
Incorporating in British Columbia
Incorporating a business in British Columbia can benefit many businesses. However, provincial incorporation does not automatically extend legal rights and benefits to other provinces or territories.
The Business Corporations Act regulates incorporation within the province and outlines definitions, legal obligations and rights, required documents, and filing instructions that must be adhered to when incorporated in BC. Federal incorporation may assist with providing more widespread legal protection for businesses and should be considered if seeking to apply the same rights across Canada.
Incorporating in Canada
Incorporating one's business federally in Canada is advantageous to many businesses and entrepreneurs. Generally, it offers similar benefits as incorporating in British Columbia; however, taking this route allows a corporation's name to be legally registered throughout Canada. Under the Canada Business Corporations Act, the processes associated with incorporation are defined and must be met should one decide to pursue this course of action.
Considering the myriad of possible benefits, incorporating federally may prove to be a lucrative path when considering options for one's business.
How to Incorporate in BC
A few steps must be taken when incorporating a business in British Columbia. Generally, the following steps are required:
Choose and Reserve Your Name
Choosing the perfect name for your business can be stressful, but it's also an enjoyable process full of endless possibilities. Five steps need to be completed to take the necessary measures for reserving a chosen name. Whether or not these actions require completion in the sequential order outlined is a personal preference; however, it is in one's best interest to go through every step before officially incorporating the future business.
Starting at square one and going from there is a great way to ensure everything solidifies the way you want it to. With careful thought and consideration of all the small details, choosing a company name will emerge as an opportunity to breathe life into an emerging idea.
Once you have a company name in mind, the next step is to search for it on the internet. This will help determine whether or not your desired name is already taken by another business and will also provide a good starting point to check out potential competitors.
Domain Name Search
Checking to see if the domain name you want is available should be done next. If a website exists that is similar in spelling, pronunciation, or sound to your desired name; it may be wise to choose another. Doing this helps avoid potential confusion and offers businesses more clarity as they incorporate their company. Also, choosing a premium domain name goes beyond the incorporation process and will help your business stand out online.
Thirdly, it's important to conduct a trademark search. Not only does registering a trademark help protect your brand in the long run, but it also prevents other companies from using similar names or logos that could create confusion with customers and potential business partners.
Legal Requirements for Business Names in BC
It is crucial to understand the legal requirements for business names in BC. The province sets out guidelines that must be adhered to when choosing a name and filing documents with the corporate registrar. Doing so ensures proper incorporation of businesses and protects them from potential liabilities down the line. For example, some words such as "bank," "insurance," or "university" need to be avoided to prevent any legal ramifications.
Name Approval Request for Incorporating in BC
Securing name approval for your new business is the first step when incorporating in BC. The Name Request Form allows you to list up to three potential names, including a ranking system if desired. By filing this document online, you can quickly address any issues identified by the examiner so as not to delay the incorporation process. A NUANS search should be conducted before submitting the form to ensure that your desired name choice does not conflict with existing businesses. Once your name is approved, congratulations! You are well on your way to turning a vision into a reality.
Filing the Incorporation Application in BC
Incorporating a business in British Columbia is a fairly simple process for any business owner looking to take their venture to the next level.
- To begin, the filing of incorporation papers must be submitted to BC Registry Services, along with an application fee. These papers must include information such as the corporate name, the nature of the business, and the proposed registered office address in the province of BC.
- Once received, an initial review will be conducted where any inconsistencies or omissions are addressed and corrected.
- When passed and approved by BC Registry Services, the incorporation process will be completed. A Notice of Articles documents that doubles as a Certificate of Incorporation will then be issued.
- This document proves that a company is officially incorporated in BC and should be kept on file for reference or legal matters.
Incorporating in BC FAQs
How Long Does It Take to Incorporate in BC?
Incorporating in British Columbia can be relatively fast and easy. The process can be accomplished online, and it typically takes 1 to 2 business days for the incorporation to be registered with BC's corporate registry.
It's important to remember that the paperwork must be completed properly for the incorporation to be completely successful, so it is advised to seek professional advice if one is unfamiliar with the process. This will add extra time but save considerable delay regarding the legal validation of a company's documents. Furthermore, corporate bylaws must be put in place, which a lawyer must review before submitting any application forms.
Once everything has been taken care of, business owners can officially open a shop in BC with confidence and assurance that they are fully compliant with applicable regulations.
How Much Does It Cost to Incorporate in BC?
When incorporating provincially, the cost is $380 plus disbursements. Disbursements vary based on situations; however, they typically include corporate name search fees and filing fees. Depending on the type of business entity you plan to incorporate, additional charges like extra share classes or GST registration may apply.
Additionally, if you want registered office services for your new company, that can also cost an additional fee. Consulting with a legal professional about these additional costs is often recommended for complete transparency regarding what to expect.
What Are the Benefits of Incorporating in BC?
Incorporating in British Columbia provides business owners with a variety of advantages. By registering their business as an incorporated entity, owners may take advantage of lower tax rates and preferential corporate governance laws.
Incorporating also helps to protect the personal assets of business owners, allowing them to separate their economic activity from other aspects of their financial profile. Additionally, incorporating reflects well on the credibility and professionalism of a company by institutionalizing the organization's operations. Registering in BC can benefit companies operating abroad or across the country as it enables them to attain more access to global markets and more significant opportunities for expansion into new places.
All these benefits make incorporating in BC an attractive prospect for any business looking for new advantages and improved protection for their investment into their venture.
What Are the Requirements for Incorporating in BC?
Incorporation in British Columbia requires a few steps.
- First and foremost, an application to the British Columbia Corporate Registry must be filed and approved.
- Second, a name reservation must be completed, which reserves the chosen corporate name for three months. This ensures no other entity has already taken that specific name.
- Third, the incorporating documents must be signed and delivered to the Corporate Registry, including a British Columbia Constitution document and Articles of Incorporation.
- Lastly, once the application is reviewed and accepted, the Registrar issues a Certificate of Incorporation, which declares the business as a legal corp or company in BC.
What Are the Consequences of Not Incorporating in BC?
Failing to incorporate in British Columbia can be incredibly detrimental for a business, as it can result in serious financial and legal ramifications.
- By not incorporating, entrepreneurs are considered self-employed individuals and can face greater liability for debts or damage incurred by their business. This could be devastating if a lawsuit is filed against them; even if the case is found to be baseless, the expenses incurred defending it would likely still be very high.
- Furthermore, unincorporated businesses lack continuity, meaning creditor protection may not exist should the business cease operations or declare bankruptcy.
As a result, entrepreneurs must weigh highly whether to incorporate or not, given these important considerations.