Starting A Business In British Columbia

Are you starting your own business? Or perhaps are you currently running a business and are curious about the legal benefits of operating as an incorporated Company? There are several advantages and disadvantages for you to consider when deciding if you wish to officially incorporate a company or if you’re better suited to register your business as a Sole Proprietorship or Partnership.

Incorporating a company in British Columbia is governed by The Business Corporations Act and enables your business to operate as its own legal entity which is separate and distinct from its shareholders. The incorporated company possesses its own rights to enter into agreements and loans, participate in law suits, and purchase and sell assets, including real property.

The cost base and maintenance of an incorporated company increases in comparison to operating as a sole proprietorship or partnership. This is due to maintaining the filing requirements of an incorporated company with the BC Registry Services. For example, an incorporated company is required to keep the BC Registry Services updated with its company information by filing an annual report each year, as well as updating and director address changes.

To proceed with incorporating a company, you will firstly choose a name of your liking. The company name must contain 3 elements, namely a distinctive element, descriptive element and corporate element. For example:

Linda's Daycare Ltd

• Linda's - distinctive element


• Daycare - descriptive element<


• Ltd. - corporate element

Your company name of choice will be compared to the many incorporated companies that currently exist in the BC Registry. A name approval request is the first step to incorporating your company. The name approval request may contain up to 3 company names to be submitted to BC Registry Services who will review the first choice and, if unavailable, will proceed to review the second choice and so forth.

Once your company name has been approved for use by the BC Registry Services, you will then be ready to proceed with filing an Incorporation Application. Some of the information to consider which will be required for this filing will include the following:

1. Authorized Share Structure including amounts and types of share classes. In some cases, one common class of shares is sufficient. In other cases, it may be advisable to create several classes of shares;


2. Address of the Company Registered and records office which represents the location in which the company shall keep its records as well as the location it may be served with legal documents. This location is also responsible for the preparation and filing of the annual report each year;


3. Names and addresses of the directors of the company;


4. Names and address of the officers of the company along with the office held by each(example: President, Secretary);


5. Names and addresses of the shareholders of the company, along with the amount and class of shares each is to acquire. You may also wish to request a Shareholders’ Agreement. The basic rights of the shareholders shall be included with the articles of incorporation. A Shareholder Agreement is an additional document drawn up to specifically set out the rights of the shareholders as agreed to by the shareholders.

Our lawyers will work alongside your accountant to advise you on many of the various issues that rise and need to be considered as part of the planning of your business. We aim to provide you and your business with practical legal advice. A discussion with our lawyers will help you to address issues that you may have not considered, including the requirements of federal and extra-provincial registrations pursuant to the area in which you do business.

Our Services:

• BC Incorporation;


• Acting as Registered and Records office and annual maintenance of company records;


• Federal Registrations;


• Extra-Provincial Registrations;

Useful Links:
Business Corporations Act
http://www.bclaws.ca/Recon/document/ID/freeside/02057_01

BC Registry Services
http://www.bcbusinessregistry.ca/

Carrying On Business In British Columbia

In British Columbia, you can run your business through a sole proprietorship, a partnership, a limited partnership, a limited liability partnership or a corporation. Which business structure is best for you will depend on a balancing of your desire to limit your personal liability, optimize your tax position and control the major decisions of the business. If no formal business structure is chosen and you are in business alone, your business will be a sole proprietorship. If you run the business informally with one or more people, you may, without even knowing it, have entered into a partnership. Before starting or expanding your business or before problems crop up between the individuals involved, you may wish to consider formalizing the structure of your business. What structure is best for you will depend on such factors as the size and nature of your business and its anticipated growth, the number of people involved in the business and which of them wants an executive/management role, the need to protect the personal assets of the individuals involved from exposure and how the profits and losses of the business are best distributed to the individuals involved. The Business and Corporate Law Group at Veritas Law would be pleased to meet with you to discuss the most advantageous structure for your business.