A business corporation can be created provincially under the Ontario Business Corporations Act as well as federally under the Canada Business Corporations Act. Other provinces provide for the creation of business corporations under similar legislation. So, you can have a federal or a provincial business corporation. If you intend to carry on a business, creating a business corporation is similar to having a baby - at law, a new "person" or legal entity is created when a business corporation is formed. This new legal entity provides you with the opportunity to limit your personal legal liability to the value of your investment into the new Business Corporation. The law promotes taking risks in a new business by enabling you to limit your liability, thus the concept of "limited liability"

How hard is it to obtain the name you want for a new corporation?

Getting the name you want for your proposed new business corporation is becoming harder and harder. Once you have selected the distinctive words which will form the new business name, it is necessary to add one of the following endings: limited, ltd., incorporation, inc., corporation, or corp. Then you must decide whether you are seeking a federal or provincial corporation because Industry Canada and the Ontario Ministry of Consumer and Commercial Relations have different standards for name approval. A request is made to a commercial search house for a NUANS report on the proposed name. Several databases of name registrations are searched, such as existing corporations, partnerships, proprietorships and business names and trademarks. If your proposed name is acceptable you can reserve it for 90 days while you do your paperwork to incorporate. If your proposed name is not acceptable because of confusion with existing names, then you must change your name and search again.

Is there any advantage to a federal or Canadian business corporation over an Ontario business corporation?

A federal or Canada business corporation offers marginal advantages with wider name protection the right to carry on business across Canada in any province or territory, the ease of registration of an internet domain name in the "ca" or Canada domain, and possibly greater international recognition when doing business abroad. However Ontario business corporations can do all of the above too and are sometimes preferred because of widespread familiarity and acceptance by the business community in Canada's largest capital market in Toronto. On close scrutiny both federal and Ontario business corporations are excellent business vehicles for providing you with limited liability in your business activities.

What is a number corporation, and why doesn't it have a proper name?

At both the federal and provincial levels we often see corporations with names such as _____ Ontario limited or ____________ Canada ltd. The incorporators or people who form these types of corporations have avoided the problems of finding a distinctive "word" name for their corporations. Because of the difficulties in finding distinctive word names, both the federal and provincial governments have allowed the use of numbered corporations. Each government assigns a distinctive number to every corporation created. So behind each word Name Corporation there is a distinctive number. As an incorporator you simply accept whatever number is next in sequence with the federal or provincial government. This way you avoid the expense and time of searching for and reserving a distinctive word name. If you later decide to adopt a distinctive word name, you can file articles of amendment along with an approved name search and you can change the corporate name, although at some expense. Many people will register their numbered corporation to carry on business under a trade or business name.

What other kinds of corporations are there in Ontario besides business corporations?

Ontario has many types or categories of corporations in addition to business corporations. Under the Ontario Corporations Act, there are corporations without share capital (usually not for profit corporations) having members instead of shareholders, mining corporations, and insurance corporations. There can also be private corporations incorporated by direct act of the legislative assembly. Under the cooperative corporations act there can be co-operative corporations for different purposes. Under the Credit Union and Caisse Populaire Act, there are of course credit unions and caisse populaires. There is a Loan and Trust Corporations Act with of course, trust companies. Corporations from outside Ontario can register to do business under the extra-provincial corporations act. In summary, you can find many different kinds of corporations under Ontario law besides the most popular being a business corporation.