Business Corporations (Ontario) – Incorporation
BY: H. Peter Eccles, B.A., LL.B., of the Ontario Bar
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III.1.(a): Introduction – General
Although new companies are still incorporated from time to time by special Act, virtually all new business corporations in Ontario are now incorporated under the authority of Ontario’s Business Corporations Act or the Canada Business Corporations Act. It is a principle of the common law that the members of a body may not by themselves confer corporate status upon it, except by act of the sovereign. However, the incorporation of a corporation does depend to a degree upon the will of its members, for it is also a principle of the common law that no group of persons can be incorporated without their consent. Thus the creation of a corporation pursuant to the statutes involves a two-step procedure, involving first an application for incorporation made by one or more persons (which evidences their consent to incorporation), and then the issue of a certificate of incorporation by the Director (which evidences the consent of the sovereign).
III.1.(b): Introduction – Restrictions on Incorporation
Except where otherwise expressly provided, Ontario’s Business Corporations Act applies to every body corporate with share capital incorporated by or under a general or special Act of the Parliament of the former province of Upper Canada, of the Parliament of the former Province of Canada, if the corporation has its registered office and carries on business in Ontario, or of the Ontario provincial legislature. It does not apply to a corporation within the meaning of the Loan and Trust Corporations Act. The Act also applies to corporations with share capital under the Railways Act, except those engaged in constructing or operating a railway, street railway or incline railway.
The Canada Business Corporations Act applies to every corporation incorporated under that Act and every body continued as a corporation under it. No provision of the Canada Corporations Act, the Canada Not-for-Profit Corporations Act, the Winding-up and Restructuring Act, or the provisions of a Special Act, as defined in the Canada Transportation Act, that are inconsistent with the Canada Business Corporations Act, applies to such a corporation.
A Canada Business Corporations Act corporation may not carry on the business of a bank, an association to which the Cooperative Credit Associations Act applies, a company or society to which the Insurance Companies Act applies or a company to which the Trust and Loan Companies Act applies.