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Incorporating Business in Canada E-mail
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Incorporating Business in Canada
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There is a significant process to incorporating a company in Canada, which is not difficult if you have the right tools and information, which we provide for you with this guide. Read on to learn more about incorporating a company in Canada.

Corporation Definition 

A corporation, also called a company, is a legal entity with its own legal personality which is separate from the owners of the company, whom are also called shareholders, as well as the people who run and manage the affairs and business of the company whom are known as the directors and officers.  

A corporation occurs when the Articles of Incorporation are properly filed with the proper governmental department or authority. These articles are also called a charter, certificate of incorporation or letters patent. 

Each corporation or company is comprised of three bodies of people – the shareholders, directors and officers. 

Shareholders are the ones who own the shares of the corporation. The shareholders control the company by virtue of voting abilities. If there is only one shareholder, that person makes the overall decisions for the corporation and has complete control. If there are more than one shareholders, the control belongs to whomever has the majority of the voting shares. Shareholders do not, however, manage the company, they elect and retire directors and approve or disapprove of corporate decisions. 

Benefits to incorporation 

There are several benefits to incorporation which lend itself to the most favourable structures for business today. The benefits include: 

·        Limited Liability – The biggest advantage to incorporation is the limited liability that is given to the shareholders leaving them non-liable for debts and other financial obligations of the company in most cases. The liability for the debts of the corporation is limited to the amount of money the shareholder has invested in the corporation. Should the corporation fold, creditors can only go after the assets of the company and not against those of the shareholders.

·        Perpetual Existence – A corporation is not dependent upon the lives of the shareholders, directors or officers as it is its own separate entity. This allows the corporation to undergo an orderly transfer of share ownership. A corporation may also own its own property, enter into contracts as well as sue or be sued.

·        Capital Acquisition – A corporation can have greater sources of capital other than business formations. They can also issue differing classes of shares to raise capital as well.

·        Tax advantages – There are tax advantages to a corporation as well, such as lower tax rates and carrying losses of previous years forward to offset profits in the next years to come.

·        Credibility – Incorporating your business may give you more credibility as well in your business dealings. 



 
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