Registered Office
The registered office of a corporation is where the registers and records of the corporation must be kept. For an Ontario incorporation, the office must be located in Ontario. A rural route number may be used but not a post office box number. Most small businesses have their registered office either at the primary place of business, or at the home of the principal.
Restrictions on Business Activities
An Ontario corporation has the capacity, rights, powers and privileges of a natural person. However, its activities can be voluntarily restricted, either initially or after incorporation. Generally, corporations do not place any restrictions on business activities in their Articles of Incorporation.
Additional Provisions in the Articles of Incorporation
Essentially, anything can be put into the Articles of Incorporation that might otherwise be the subject of a by-law of the corporation. For example, sometimes Borrowing and Mortgaging Provisions may be included in the Articles.
Private Corporation Restrictions
A fundamental distinction can be made between what are called ‘private’ or ‘closely-held’ corporations and ‘public’ corporations. In general, a public corporation offers its shares to the public, either through the stock market or privately. In order to protect the public, the government has imposed special rules, notably about disclosure, on these corporations. These rules are complex and require much paperwork and effort.
As a result, most small businesses incorporate as ‘private’ companies that do not offer shares to the public. Three common restrictions are added to the Articles of Incorporation to ensure that securities legislation does not apply. First of all, the number of shareholders (excluding employees) is limited to 50 or fewer. Secondly, shares cannot be offered to the public. And finally, restrictions are placed on the transfer of shares.
Fiscal Year End
The fiscal year end of the corporation should be set in conjunction with your accountant.