The incorporators are the designated founders of the
company. The incorporators are also the first directors.
The incorporators must be 18 years of age or
older. In addition, at least half of the incorporators must ordinarily
be residents of Canada.
This incorporation process allows from one to three
The incorporation process does not involve the
allotment of company shares. Before shares can be allotted, the company
must first incorporate. Once you incorporate, you can allot shares, either to the
founders or to new shareholders.
This incorporation process automatically
determines the authorized capital of the company to consist of an unlimited
number of Common shares without par value. Thus, the company has only
one class of shares, and the company is entitled to issue as many of these
shares as it sees fit.
Beyond the voting, dividend and
dissolution rights prescribed by the Business Corporations Act,
there are no special rights or restrictions attached to these
shares. The only exception is the restrictions arising from the
Articles of Incorporation. The Articles place restrictions on the issue, transfer and
ownership of shares to preserve the status of the corporation as
a private company. These include:
all share transfers must be authorized by a majority of the directors;
the number of shareholders is limited to 50, with some exceptions; and,
shares may not be offered to the public.
Should you wish to remove these restrictions at a
later date, you should only do so after consulting a lawyer.
The Articles of
Incorporation automatically stipulate the allowable number of directors
to be from one to five.
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