Companies and organizations
Canadian corporate and business law, explained by subject
Learn about business structures, incorporation, directors, shareholders, contracts, records and ongoing corporate obligations in Canada.
Which law applies: A business may operate under federal, provincial or territorial laws at the same time. Incorporation jurisdiction, operating locations, industry, employees and customers all affect which registrations and rules apply.
Subject 1
Choosing a business structure
The structure affects control, liability, continuity, administration and taxation.
- A sole proprietorship is not legally separate from its owner, so the owner generally carries the business obligations personally.
- A partnership involves two or more persons carrying on business together and should have a written agreement on authority, profit and exit.
- A corporation is a separate legal person, but directors, officers, shareholders or guarantors can still have specific liabilities.
- A cooperative or not-for-profit corporation has a distinct purpose, governance model and governing statute.
Official sources: Starting a business · Corporations Canada
Subject 2
Federal or provincial incorporation
Federal incorporation creates a corporation under federal law; provincial incorporation creates one under the selected province's law.
- Compare name protection, operating locations, filing duties and extra-provincial registration before choosing a jurisdiction.
- A federally incorporated company generally must still register in provinces or territories where it carries on business.
- Articles establish core corporate details; bylaws, resolutions, registers and agreements govern internal operations.
- Use an official registry and current instructions rather than relying on an unofficial incorporation service's summary.
Official sources: Federal incorporation · Canada Business Registries · Business corporations
Subject 3
Directors, officers and corporate records
Directors supervise the corporation and owe statutory duties; officers manage the functions assigned to them.
- Directors must act honestly and in good faith with a view to the corporation's best interests and exercise appropriate care.
- Minutes, resolutions, share records, registers and accounting records support valid decisions and due diligence.
- Corporate law can impose personal exposure for certain unpaid wages, taxes or unlawful distributions.
- Conflict-of-interest rules may require disclosure and limits on participation in a decision.
Official sources: Canada Business Corporations Act · Business corporations
Subject 4
Shareholders, financing and ownership changes
Share rights and private agreements determine voting, distributions, transfers and exit arrangements.
- Different share classes can carry different voting, dividend, redemption or liquidation rights.
- A shareholders' agreement may address board control, reserved decisions, future financing, transfers, disability, death and disputes.
- Issuing shares, borrowing money or granting security should be authorized and recorded correctly.
- Buying shares usually carries different liabilities and due-diligence concerns from buying selected business assets.
Official sources: Canada Business Corporations Act · Business corporations
Subject 5
Commercial contracts and business relationships
A useful contract identifies the parties, exchange, performance rules, risk allocation and exit process.
- State the goods or services, price, taxes, payment timing, acceptance criteria, ownership and delivery obligations.
- Address confidentiality, intellectual property, privacy, warranties, indemnities, liability limits and insurance where relevant.
- Define default, notice, suspension, termination, dispute resolution and the law governing the agreement.
- Consumer, employment, franchise and Quebec civil-law rules can override or supplement ordinary contract terms.
Official sources: Starting a business
Subject 6
Annual and change-of-business obligations
Incorporation is followed by recurring filings, records and registrations.
- Keep the registered office, directors, business names and official addresses current with the proper registry.
- File annual returns and maintain required ownership or significant-control information under the governing statute.
- Major transactions, reorganizations, dissolutions and restorations usually require formal approvals and filings.
- Tax returns, payroll, licences and beneficial-ownership duties are separate from the corporate annual return.
Official sources: Corporations Canada · Canada Business Registries
Important
General information, not legal advice
This page provides general legal information, not legal advice. It does not create a solicitor-client relationship. Laws, forms and official guidance change, and the answer can depend on your province, industry, documents and facts. Check the linked official source and consult a licensed Canadian lawyer, Quebec notary, patent agent or trademark agent when advice is needed.