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khanomcat
07-16-2010, 01:52 AM
Hi all,

First time poster, and first time business owner, so please forgive the newbie. I'm starting a restaurant in BC, Canada. I want to incorporate, and am hoping someone who has gone through it can help out. I have two questions:

1) When registering a name for the corporation, my first instinct was to use the name of the restaurant. However, a friend suggested that I simply use the incorporation number of the company, followed by "BC Ltd." He seemed to think this would speed up the process, as a name search wouldn't have to be done. Does anyone know if this is the case, or of any advantages or disadvantages in registering a corporation in this way?

2) In the "Notice of Articles" section of the incorporation application, there are these instructions:
"An incorporated business can issue shares, which represent ownership interest in the company and give the shareholder a say in how the company is being run. For most small companies starting out, a simple share structure with just one class of shares (and no series) is typical."

The columns into which information is to be entered are:
1. Identifying name of class or series of shares
2. Maximum number of shares of this class or series of shares that the company is authorized to issue, or indicate there is no maximum
3. Kinds of shares of this class or series of shares
a) Without par value b) With a par value of ($) c) Type of currency
4. Are there special rights or restrictions attached to the shares of this class or series of shares? (Yes or No)

The document is here: http://www.fin.gov.bc.ca/registries/corppg/forms/reg50B.pdf, and the section I've described is on page 6.

I have no idea what I should write here, and have searched high and low for guidance, without success. My wife and I are 50-50 owners, and don't anticipate selling any shares in the company (at least not for several years). Does anyone have any suggestions?

Thanks a lot!

Business Attorney
07-16-2010, 10:30 AM
I'm not a Canadian attorney but based on incorporation in the states in the United States that I am familiar with, I'll take a stab:

1) In most states, checking the availability of name can be done online in advance. In any event, I would be surprised if it is not computerized by the Ministry of Finance. Once you have the name, you are stuck with it for legal purposes until you change it. Do you really want to be known legally as 987654 B.C. Ltd. even if it saves a few days?

2)
1. If you have a single class of stock, it is common stock.
2. We don't have the option of listing "no maximum" so I use in a number that is somewhat higher than the number of shares the corporation plans to issue. You can always amend articles of incorporation later to increase the number of authorized shares. However, with "no maximum" as an option, unless there is a downside it seems reasonable to make that choice.
3. I usually use "no par value" in most states, but in at least one state, the indiscriminate use of no par value stock can inadvertently result in much higher franchise taxes because of the way the franchise taxes are computed. You might want to check with a B.C. attorney to make sure that it makes no difference.
4. If you only have one class of shares, there would not appear to be any need for special rights or restrictions attached to the shares.

You should really address these questions to a B.C. business attorney, though. I'm sure any experienced business lawyer could answer these questions after a few minutes of discussing your particular situation.

khanomcat
07-19-2010, 11:19 AM
Thanks a lot for taking the time to reply, David. Your input is sincerely appreciated!