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Corporations

BC

This publication guides practitioners through establishing, running, and dissolving a corporation in British Columbia.

2 Matter Plans

Overview

The commentary covers topics like shareholders' voting rights, the appointment of directors, and the sales of company assets. It also provides specific guidance on drag-along and tag-along clauses, financing, and shareholder funding arrangements and provides an overview of insolvency.

The Reference materials folder includes guidance on electronic signing and remote witnessing, and the Getting the matter underway folder contains essential compliance and client engagement documents. The comprehensive Retainer Instructions ensure that all necessary information is gathered from the client at the outset of the matter.

The Business structures and the comparative table guide provides a comparison of the pros and cons of different business structures.

Precedents in this publication include:

  • Template letters for clients and shareholders;
  • Unanimous shareholder agreements – concise and extensive forms;
  • Agreements for share sales, transfers and options;
  • Library of minutes and resolutions;
  • Library of precedents for small businesses.
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2 Matter Plans Included

  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Corporations (BC)
  • Folder icon Reference materials
    • Item icon AI Prompts
    • Item icon Electronic Signing and Remote Witnessing
    • Item icon Business Structures and the Comparative Table (BC)
    • Item icon Further information
  • Item icon Overview
    A corporation, or company, is a legal entity with its own rights and obligations, separate from its shareholders, directors, managers, employees, and agents. Provided the corporation remains registered, it will exist even if all its original shareholders or directors divest their interest or vacate ...

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  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Corporations
    • Item icon To do list - General
    • Item icon First steps
    • Item icon Client details, verification, and source of funds
    • Item icon Retainer instructions - Corporations - Incorporation
    • Item icon Retainer instructions - Corporations - Disputes
    • Item icon Conflict of interest check
    • Item icon Initial letter to client enclosing retainer agreement - Incorporation
    • Item icon Retainer agreement - British Columbia
    • Item icon Scope of work - Incorporation
    • Item icon Scope of work - Share sale
    • Item icon Time and costs estimates
    • Folder icon If required - Costs disclosure update and a non-engagement letter
      • Item icon Letter to client updating costs disclosure
      • Item icon Non-engagement letter
    • Folder icon General deeds, agreements, execution clauses, and statutory declarations
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Confidentiality deed
        • Item icon Deed for general use
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon General deed of indemnity
        • Folder icon Library of standard clauses for deeds
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
        • Folder icon Library of standard clauses for agreements
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Execution clauses
        • Item icon Execution clauses - Agreements and contracts
        • Item icon Execution clauses - Deeds
      • Folder icon Statutory declaration
        • Item icon Statutory declaration
      • Item icon Standard annexure note for documents
  • Folder icon B. Establishing a corporation
    • Item icon Establishing a corporation
      Incorporation is completed under the British Colombia Business Corporations Act 2002 or the Canada Business Corporations Act 1985. British Columbia permits corporations incorporated in other provinces or under the Canada Business Corporations Act to do business in British Columbia, provided they ...

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    • Item icon Federal incorporation
      Incorporation under the Canada Business Corporations Act 1985 can be completed online through the Online Filing Centre and a Nuans corporate name search is part of the federal incorporation process. The online filing portal gives incorporators the option of using the basic articles of ...

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    • Folder icon If required - Federal incorporation
      • Item icon Government of Canada - Online Filing Centre
    • Item icon British Columbia incorporation
      Incorporation under the British Colombia Business Corporations Act 2002 is similar to that under the Canada Business Corporations Act 1985. A name request for incorporating in British Columbia is completed through the BC Registries and Online Services Name Request webpage. This is a search of the ...

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    • Item icon Corporate name
      The first step when incorporating is choosing a name. There is an additional cost for the name search, conflict check, and name reservation. If the incorporators do not wish to choose a name, the corporation can be assigned a number name.

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    • Item icon BC Registries and Online Services – Name Approval Request
    • Item icon Articles
      A corporation’s articles form an agreement between the corporation, shareholders, and officers on managing the corporation. They have the effect of a contract between the corporation and each director, officer, and shareholder. Each person agrees to act in accordance with the rules in the articles. ...

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    • Item icon Sample Incorporation Agreement and Table 1 Articles
    • Item icon Officers
      A corporation’s directors and other officers run its affairs. They are the directing mind of the corporation and, guided by the corporation’s documents, take steps to further the corporation’s objectives. The officers manage the corporation’s day-to-day business and report to the board of ...

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    • Item icon Shareholders
      All corporations must have at least one shareholder, also called a member. Each shareholder owns the corporation’s assets in the proportion their shares bear to the total shares on issue. Shares are personal property: s 56. Only persons or entities capable of owning property can be a ...

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    • Item icon Share structure
      Part 3 of the Business Corporations Act 2002 deals with shares, including issuing, classes of shares, share rights, and redemption. Corporations recognized or incorporated under the Act may have shares with par value and shares without par value Corporations can issue various classes of shares ...

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    • Item icon Unanimous shareholder agreement
      The Business Corporations Act 2002 does not recognize or preclude a unanimous shareholder agreement unlike other business corporations Acts in Canada. The shareholders may execute a unanimous shareholder agreement and it does not bind a shareholder who is not a party. Any term considered important ...

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    • Item icon Unanimous shareholder agreement - Concise
    • Item icon Unanimous shareholder agreement - Extensive
    • Item icon Subscription and securityholder agreement
    • Item icon Shareholder and unitholder agreement
    • Item icon Letter to client with draft unanimous shareholder agreement
    • Item icon Share certificate
    • Item icon Consent to becoming a shareholder
    • Item icon Consent to act as a director
    • Item icon Consent to act as a secretary
    • Item icon Register of shareholders
    • Item icon Letter to client to make appointment to sign documentation for incorporation
    • Item icon BC Registry Services – Instructions for completing an Incorporation application
    • Item icon BC Registry Services – File an Incorporation application
    • Item icon Letter to client advising the incorporation is now complete
    • Folder icon If required - Extra-provincial corporations
      • Item icon BC Registry Services – Register an Extra-Provincial Company
  • Folder icon C. Running a corporation
    • Item icon Director guarantee
    • Item icon Corporation records
      Every corporation must maintain certain business, financial and administrative records: ss 42 and 196. Section 42 requires a corporation to prepare and maintain the corporation records at its records office or another place provided the records can be accessed and copied at the records ...

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    • Item icon Shareholder meetings
      Annual and special meetings The articles or the unanimous shareholder agreement may provide for the place and time of shareholder meetings. In the absence of provisions, the directors may determine such.

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    • Item icon Letter to shareholder enclosing notice of meeting
    • Item icon Notice of meeting and proxy voting form
    • Item icon Minutes of meetings
      Corporations must keep meeting minutes and resolutions at their records office. The minutes can be kept at another location provided they are electronically available for inspection and copying at the records office: ss 42, 43, and 179 of the British Columbia Business Corporations Act 2002. ...

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    • Folder icon Library of minutes
      • Item icon Minutes of meeting
      • Item icon Minutes of meeting - Directors
      • Item icon Minutes of meeting - Transfer of shares
    • Item icon Resolutions
      Shareholders with voting shares control the corporation’s activities, subject to the provisions of the articles. The articles and the Business Corporations Act 2002 set out how a resolution is passed, including when a special or ordinary resolution is required. Majority shareholders run the ...

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    • Folder icon Library of resolutions
      • Item icon Corporate resolution
      • Item icon Corporate resolution - Appointment of auditors
      • Item icon Corporate resolution - Financial and solvency
      • Item icon Corporate resolution - Transfer of shares
      • Item icon Corporate resolution for vendor - Commercial real estate sale
    • Item icon BC Registry Services - BC Annual Report
    • Item icon Taxation
      The main reason to use a corporation to operate a business is favourable tax treatment compared to individuals. Corporations must file annual tax returns, even if dormant, with no trading activity for the year. Corporations are taxed at the federal and provincial level, with the aggregate tax rate ...

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    • Item icon Withdrawing funds from the corporation
      Shareholders are usually in business to make money and look for ways to take out their profit share. Money can be taken out of a corporation by:

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    • Item icon Changing corporation details
      Corporations are obligated to keep the registrar informed of changes by filing the relevant form giving notice of the change under the Business Corporations Act 2002. Changes that warrant filing a notice include:

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    • Item icon BC Registry Services - File notice of changes online
    • Item icon Resignation and removal of directors
      A director ceases to hold office when they die, resign, are removed, or become disqualified: s 108 of the Business Corporations Act 2002. A Notice of Change of Directors must be filed with the registrar within 15 days of the change: s 127. If the corporation fails to file a notice of ...

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    • Item icon Resignation as a director
    • Folder icon Library of precedents for small business
      • Item icon Agreement for supply of goods and services
      • Item icon Credit application
      • Item icon Dispatch and delivery policy
      • Item icon Director guarantee deed
      • Item icon Liability waiver and consent
      • Item icon Privacy policy
      • Item icon Returns and refund policy
      • Item icon Terms of trade
      • Item icon Website terms of use for advertising and booking personal services
      • Item icon Website terms of use for downloadable online products
      • Item icon Website terms of use for physical products
  • Folder icon D. Authority and execution
    • Item icon Authority to bind the corporation
      Corporations have some of the powers, rights, and privileges of a natural person: s 30 of the Business Corporations Act 2002. These must be defined within the context of a non-living thing. For instance, a corporation is not entitled to the right to life, liberty, security of persons, or the ...

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    • Item icon Document execution and electronic signatures
      A contract or document does not need to be in a specific form or signed in a specific manner solely because a corporation is a party to the contract. It will be based on the general requirements of the applicable legislation. A corporation may have a corporate seal, but it is not required. A record ...

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    • Item icon Powers of attorney
      Corporations Under s 6 of the Power of Attorney Act, SBC 2000, c 15, a corporation may grant a power of attorney if it is authorized to do so by its articles or a unanimous resolution of its directors.

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    • Item icon General power of attorney by a corporation
    • Folder icon Library of clauses for powers of attorney
      • Item icon Access to will
      • Item icon Compensation for attorney
      • Item icon Compensation for attorney excluded
      • Item icon Compensation for attorney greater than prescribed fee scale
      • Item icon Corporation appointing attorney to conduct the business of the corporation
      • Item icon Corporation appointing attorney to execute documents
      • Item icon Discharge of mortgage
      • Item icon Mortgage
      • Item icon Purchase of real estate - General
      • Item icon Purchase of real estate - Specific
      • Item icon Sale of real estate
  • Folder icon E. Share sales, transfers, and options
    • Item icon Issuing new shares
      A corporation may decide to issue shares for cash or non-cash consideration to raise funds or bring new people into the corporation. There is no limit to the number of shares a corporation can issue, unless the articles contain restrictions.

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    • Item icon Transferring existing shares
      Subject to any restrictions imposed by the articles and any unanimous shareholder agreement, shareholders may sell or gift their shares. Shares can be transferred by court order, such as in a family law settlement, or bequeathed by a shareholder’s will. There is no prescribed form for transferring ...

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    • Item icon Deed of trust for purchase of shares by trustee
    • Item icon Agreement for sale of shares - Concise
    • Item icon Agreement for sale of shares - Extensive - Corporation takeover
    • Item icon Transfer of shares
    • Item icon Share certificate
    • Folder icon If required - Options
      • Item icon Letter to vendor's lawyer exercising option
      • Item icon Letter to purchaser's lawyer exercising option
      • Item icon Put and call option agreement
      • Item icon Notice of exercise of option
      • Item icon Notice of appointment of nominee
  • Folder icon F. Disputes, bankruptcy, liquidation, and dissolution
    • Item icon Disputes
      Disputes arise within corporations and between corporations and other entities. They become involved in litigation to recover a debt, enforce a contract, or be sued over a business deal, or by their employees, or creditors. Corporations are involved when shareholders or directors sue each other ...

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    • Item icon Debts and contractual disputes
      A common issue in debt recovery and contractual disputes is whether the debt was validly incurred, or the contract was validly formed. These disputes are often based on whether the person acting on the corporation’s behalf had the authority to bind the corporation. This can be both a legal issue ...

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    • Item icon Before commencing proceedings
      The client’s position The rights and obligations of parties, including the corporation, its officers, and its shareholders, may be established or impacted by the corporation’s articles, unanimous shareholder agreement, and rights attached to shares. These documents help provide a complete picture ...

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    • Item icon Unpaid debts and bankruptcy
      Bankruptcy proceedings are brought under the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) or the Companies’ Creditors Arrangement Act (R.S.C., 1985, c. C-36). A demand to pay a debt due and owing can be a precursor to a bankruptcy application and winding up the corporation. The applicant ...

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    • Item icon Letter to client requesting relevant documents
    • Item icon Letter to director requesting corporation records
    • Item icon Letter to director requesting inspection of corporation minutes
    • Item icon Liquidation and dissolution
      A business corporation can be dissolved voluntarily or involuntarily under Part 10 of the Business Corporations Act 2002. Liquidation is an appropriate course of action when the corporation to be dissolved has extensive debts and liabilities but is otherwise solvent with assets that have not ...

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    • Item icon BC Registry Services - Application for (Voluntary) Dissolution
  • Folder icon G. Finalizing the matter
    • Item icon Finalizing the matter
      Original documents not delivered to the client should be placed in safe custody. Copies of the documents kept should be provided to the client and the corporation, so the directors and shareholders are aware of the location of all relevant documents. The client’s accountant may require copies of ...

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    • Item icon Letter to client finalizing the matter
    • Item icon Invoice recital - Incorporation
    • Item icon Invoice recital - Share sale
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

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