Private Corporation
A private corporation is a corporation resident in Canada that is neither a public corporation nor controlled by a public corporation.
Canadian-Controlled Private Corporation(CCPC)
A CCPC is a private corporation that is also a Canadian corporation. For a corporation to be considered a CCPC, it has to meet all of the following requirements at the end of the tax year: it is a private corporation; it is a corporation that is resident in Canada and was either incorporated in Canada or resident in Canada from June 18, 1971 to the end of the tax year; it is not controlled directly or indirectly by one or more non-resident persons; it is not controlled directly or indirectly by one or more public corporations (other than a prescribed venture capital corporation, as defined in the Income Tax Regulations 6700); it is not controlled by a Canadian resident corporation that lists its shares on a prescribed stock exchange outside of Canada; it is not controlled directly or indirectly by any combination of persons described in the three preceding conditions; if all of its shares that are owned by a non-resident person, by a public corporation (other than a prescribed venture capital corporation), or by a corporation with a class of shares listed on a prescribed stock exchange were owned by one person, that person would not own sufficient shares to control the corporation; and no class of its shares of capital stock is listed on a prescribed stock exchange.
Other Corporations
These include non-resident-owned investment corporations and Crown corporations.
Most business enterprises in Canada are corporations incorporated under federal, provincial or territorial corporate legislation. Provincial and territorial legislation is largely consistent with the federal Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the “CBCA”).
Corporate legislation and common law impose on directors the duty to manage the business and affairs of the corporation. Corporate legislation further provides that in exercising the duty to manage the business and affairs of the corporation, the directors are under a fiduciary duty to act honestly and in good faith with a view to the best interests of the corporation. In carrying out these duties, directors are obligated to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Investors can apply to a court for compensation in the event of “oppressive” action by their corporation.
Legislation governing the formation and operation of other forms of business enterprise, such as partnerships and trusts, is less extensive. Trustees have fiduciary responsibilities to trust beneficiaries. Most other aspects of the corporate governance of a non-corporate enterprise will be governed by the agreement or indenture under which the enterprise was established.
Language of Legislation and Corporate Documents
English, French (optional in Federal Corporations and compulsory in Quebec)
Name Restrictions
A name that is similar to or identical to an existing company. A name that is known to exist elsewhere. A name that implies illegal activities. A name that implies royal or government patronage.
Many names require justification or high capitalisation to allow use. Words such as “International”, “European” or other words indicating an international presence will only be approved if the Company is incorporated worldwide and has the ability to prove that this is the case. The same applies for “Canada”.
Use of the word “Group” will only be approved if the company can provide documentary evidence that the company owns a group of companies.
Numbered Companies are also acceptable, e.g. 012345BC Ltd.
Names Requiring Consent or Licence
The following names or their derivatives: bank, building society, savings, loans, insurance, assurance, reinsurance, co-operative, council, Chamber of Commerce, trust, municipal and finance or their foreign-language equivalents.