British Columbia Law
How to Incorporate a Business in BC: A Step-by-Step Guide
Incorporating a business in British Columbia is one of the most important legal decisions a business owner can make. It creates a separate legal entity — the corporation — that can own property, enter contracts, and carry on business in its own name. As a shareholder, your personal liability is generally limited to what you invest in the company.
Should You Incorporate? The Key Reasons
The most common reasons BC business owners choose to incorporate:
- Limited liability: Your personal assets are generally protected from business debts and lawsuits. A sole proprietor's personal assets are fully exposed.
- Tax advantages: Corporations pay the small business tax rate (currently a combined 11% federal and BC rate on the first $500,000 of active business income), which is lower than most personal marginal rates. Income can also be timed — paid out as salary or dividends in the year that makes the most tax sense.
- Credibility: A BC Inc. signals to clients, suppliers, and lenders that you are operating a serious, permanent business.
- Continuity: A corporation continues to exist even if the owner dies or leaves. A sole proprietorship does not.
- Investment and growth: Corporations can issue shares to investors, employees (through stock options), or other owners.
BC Incorporation vs Federal Incorporation
In Canada, you can incorporate under the *Business Corporations Act* (BC) or federally under the *Canada Business Corporations Act* (CBCA). Key differences:
| Feature | BC Incorporation | Federal Incorporation |
|---|---|---|
| Name protection | BC only | Across Canada |
| Name search required | Yes | Yes (NUANS report) |
| Annual filings | BC registry | Federal + extra-provincial registration |
| Best for | BC-focused businesses | Businesses operating across provinces |
Most BC small businesses incorporate provincially. Federal incorporation makes more sense if you plan to operate in multiple provinces under the same name.
Step-by-Step: How to Incorporate in BC
Step 1: Choose and Reserve Your Corporate Name
You can incorporate with a numbered name (e.g., 1234567 B.C. Ltd.) or a descriptive name (e.g., Coast Legal Services Inc.). If using a descriptive name, you must conduct a name search through BC Registry Services to confirm it is not already in use or too similar to an existing name. A lawyer can help identify whether a proposed name is available and compliant.
Step 2: Prepare the Incorporation Documents
BC incorporations require:
- Notice of Articles — sets out the company's name, share structure, and the restrictions (if any) on share transfers
- Articles — the internal rules governing how the company operates (directors, meetings, share transfers, etc.)
BC's Business Corporations Act provides a default set of articles (the Table 1 articles) for simple structures, but most businesses benefit from customized articles — particularly if there are multiple shareholders or specific governance needs.
Step 3: File with BC Registry Services
The incorporation is filed electronically through BC Registry Services (formerly BC Corporate Online). The filing fee is currently $350 for a BC incorporation.
Step 4: Set Up Your Corporate Records Book
A BC corporation is required to maintain a records book containing: the Notice of Articles, Articles, minutes of directors' and shareholders' meetings, share register, and other key documents. This must be kept at the registered office or records office.
Step 5: Issue Shares
After incorporation, the founders receive shares in exchange for their investment. The share structure and how shares are issued has significant tax and legal implications — particularly if you plan to income-split with a spouse or family trust, or if multiple founders are involved.
Step 6: Open a Corporate Bank Account and Get Your Business Number
With your Certificate of Incorporation, you can open a corporate bank account and register for a Business Number (BN) with the Canada Revenue Agency — which you'll use for GST/HST, payroll, and corporate tax filings.
What a Lawyer Adds to the Incorporation Process
The technical act of filing is straightforward. What a lawyer provides:
- Advice on share structure (how many classes, what rights — critical if there are multiple shareholders or you want to income-split)
- A shareholders agreement (essential if there is more than one shareholder — see below)
- Articles tailored to your business rather than the generic defaults
- Advice on director and officer roles and liability
- Guidance on the transition from sole proprietorship or partnership, including asset transfers
Incorporating without professional advice can create problems that are expensive to fix later — particularly around share structure and tax planning.
This article is general information, not legal or tax advice. Meetings are by appointment only, by phone or secure video.