Canadian Business Law/Corporations

The Corporation

A corporation enjoys special status in the law. Among the characteristics of the corporation include:

• exists as a separate legal entity
• existence is perpetual
• has limited liability
• control by shareholders
• shares are transferable

Process of incorporation

There are three ways in which to incorporate a company in Canada.

Letters Patent

A grant of a Charter from the Crown. This practice is only still used in PEI.

Memorandum of Association

The rights and obligations of the corporation are determined contractually by the Articles of Association. This practice is only used in Nova Scotia and British Columbia.

Statutory enactment

The corporation is enacted under a Corporations Act, which can either be federal or provincial.