3.1 Pre-incorporation Considerations
3.2 Completion of Application - General Comments
3.3 Head Office
3.4 Directors
3.5 Definition of Objects
3.6 Objects - Charities
3.7 Ancillary Powers
3.8 Special Provisions
3.9 Supporting Documents
3.10 Objects and Special Provisions - Key Points
3.11 Checklist
3.12 Timing
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3.1 Pre-incorporation Considerations

At this point, you should consider whether the activities or undertaking of the proposed corporation may come under the supervision or regulation of, or be of interest to a Ministry or an Agency of the Government.  In particular:

• Will the corporation seek financial assistance from the Government?
• Are the proposed activities of the corporation regulated by a Ministry or Agency of the Government?
• Will the corporation engage in activities that would supplement services provided by a Ministry or Agency of the Government?

If the answer to any one of the above questions is “yes”, then it may be wise to consult the appropriate Ministry or Agency prior to completing the application.  Some Ministries or Agencies may require that you contact them prior to incorporation and some may also offer suggestions for drafting objects for the proposed corporation.

Such consultation with the regulating bodies may, in the long run, save you time, inconvenience and expense.

For example:

• if the corporation is to operate a nursery school, home for children or a day care service, you should consult the Ministry of Children and Youth Services;
• if the corporation is to provide a home for the aged, you should consult both the Ministry of Community and Social Services, and the Ministry of Municipal Affairs and Housing;
• if the corporation is to provide cultural or citizenship programs you should consult the Ministry of Citizenship and Immigration or the Ministry of Culture;
• if the corporation is to provide education or training programs you should consult the Ministry of Education and the Ministry of Training, Colleges and Universities;
• if the corporation is to be a charity, you should consult the Office of the Public Guardian and Trustee (Ontario) and Canada Revenue Agency, Taxation; (see Part 6 of this handbook)
• if the corporation is to provide health care services or to engage in related activities or if the corporation is to be an association of health care professionals, you should consult the Ministry of Health and Long-Term Care;
• if the corporation is to provide prisoner rehabilitation services you should consult the Ministry of Community Safety and Correctional Services.

Note:   This is not an exhaustive list of instances where other Ministries are to be consulted.

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3.2 Completion of Application - General Comments

The Application for Incorporation of a Corporation without Share Capital, (Form 2 approved by the Minister as provided for in the Regulations to the Corporations Act), is available on the ServiceOntario web site at www.ServiceOntario.ca or in person from the Ministry of Government Services (see Contacts - Appendix “G”).

Detailed instructions for completion accompany each set of application forms and those instructions are not repeated in the handbook.  The information in this handbook is more general and is intended to clarify and supplement the instructions that are supplied with the application forms.

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3.3 Head Office

Every corporation is required to have a head office in Ontario (section 277 of the Act).  This does not necessarily mean that a corporation must own or lease a special building or a suite of offices.  The intention of the Act is to have an address formally designated as the head office of the corporation where certain records are kept and where the corporation may be reached by an interested party.  Some incorporators use their home address for this purpose and accordingly that address is set out in Item 2 of the application for incorporation.

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3.4 Directors

The first directors, not fewer than three (section 283 of the Act) individuals named as directors in the Letters Patent, are the directors of the corporation until replaced by other individuals duly elected in their stead (section 284 of the Act).  The first directors of the corporation have all the powers, duties and liabilities of directors that are elected to the board.

The office of director places on that person responsibilities and even liabilities. Accordingly, any person accepting a directorship should be prepared to assume the responsibilities that go with the director’s office.

Generally, no person is permitted to be a director of the corporation unless he or she is a member of the corporation, and if the person ceases to be a member, he or she automatically ceases to be a director (section 286).  However, a person may be a director of a corporation if he or she becomes a member of the corporation within ten days after his or her election or appointment as a director. If the person fails to become a member within the ten days, the person immediately ceases to be a director, and cannot be re-elected or reappointed unless he or she is a member of the corporation. The Act (subsection 286(3) also sets out a limited exception for hospitals and stock exchanges.

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3.5 Definition of Objects

Objects are concise statements of the ultimate purpose of the corporation.

Content of Objects - See Part 6 for charitable standard objects

The principal objects, that is, objects which describe the primary undertaking of the corporation, should be the first statement, followed by secondary objects, if any.

The objects should not be an enumeration of the proposed activities and/or the aims of the corporation.  It is advisable to keep the objects statement short but broad in nature, (except for charities, see Part 6 of this handbook), since a general object will include the particulars normally included in that sort of undertaking.  On the other hand, the objects should be sufficiently specific so as to avoid ambiguity. 

Examples:  the objects for a community youth organization might be drafted as follows:

• The establishment and operation of a youth organization for the purpose of:
  a)         promoting the best interests of teenagers in the Town of Kenora;
  b)         promoting interest in athletics, sports and recreation and establishing and maintaining facilities and equipment for same.
• and other complementary purposes not inconsistent with these objectives.

• The objects of a ratepayers’ association might be drafted as follows:
  The establishment and operation of a residents’ association for the purpose of
  a)         promoting the interests of the residents of the community of Central Don Mills;
  b)         carrying on research into problems connected with development of real property in the community.
• The objects of a social club, with premises, might be drafted as follows:
  The establishment and operation of a social club for the purpose of
  a)         promoting social and recreational activities among the members of the corporation;
  b)         providing recreational facilities and a club house for the accommodation of members of the corporation and their guests.

SEE APPENDIX “A” Draft Standard Clauses for non-profit, non-charitable, corporations under Part III of the Corporations Act.

Note:  Clause 4, on the Application for Incorporation of a Corporation Without Share Capital under which the objects are set out (i.e. “The objects for which the corporation is incorporated are:”) must contain objects only and not powers or special provisions.

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3.6 Objects - Charities

See Part 6 of this Handbook.

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3.7 Ancillary Powers

All corporations automatically acquire incidental and ancillary powers unless withheld in the Letters Patent or Supplementary Letters Patent.  These powers are set out in clauses 23(1)(a) to (p) and (s), (u) and (v) of the Act.  Any powers to be withheld pursuant to subsection 23(2) should be specified in clause 5 of the application under Special Provisions. All corporations also automatically acquire the powers set out in section 275 of the Act.

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3.8 Special Provisions

The applicants may ask to have embodied in the Letters Patent any provision that may be made the subject of a by-law of the corporation except for provisions concerning the term of office for the directors or providing for the election and retirement of directors in rotation.  The only provision that must appear in the Letters Patent of a corporation that is not a charity is the “No Gain” clause, which is pre-printed on the form.  In most cases it is sufficient to set out the special provisions in the by-laws rather than the Letters Patent as provisions included in the Letters Patent cannot be changed without filing Supplementary Letters Patent.

Some items that may be included in the special provisions section are:

• Borrowing powers (see wording in section 59)
• Distribution of assets
• Director's remuneration
• Membership qualification
• French or foreign version of name
• Other powers

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3.9 Objects and Special Provisions - Key Points

The ‘objects’ in the Letters Patent set out the purposes of the corporation, and the ‘special provisions’ deal with matters of corporate governance.  All such provisions must fall within the scope of the Corporations Act.  When an application for Letters Patent or Supplementary Letters Patent contains provisions that are not acceptable, the applicant is given an opportunity to revise the application.  The Act (sections 4, 5 and 9) provides authority for the Ministry to exercise discretion in reviewing applications and requiring revisions to proposed provisions.

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3.10 Objects and Special Provisions - Key Points

Under certain circumstances an application for incorporation must be accompanied by supporting documents. For example where the proposed name of the corporation is similar to a corporation, association, partnership or individual, a consent of that person would be required.

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3.11 Checklist

1. Have you fully completed all items in the application and, if not applicable, so stated?
2. Have you enclosed with the application
   • an original Ontario-biased NUANS Name Search Report for the proposed name of the corporation?
   • a cheque for the appropriate amount made payable to the Minister of Finance?
   • the appropriate supporting documents, if required?
   • a covering letter with the name, phone number and address of a contact person.

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3.11 Timing

An application for incorporation is usually processed within approximately 6 to 8 weeks of receipt in the Branch.  The Letters Patent will bear the effective date as of the date of delivery unless the application is returned for revision, in which case Letters Patent will bear an effective date as of the date of redelivery to the Companies and Personal Property Security Branch, provided the application is correct.

For an additional payment (see Fees – Appendix “F”) there is an expedited service available on request with a processing time of 7 business days. The expedited service fee is for the review of application by the end of the seventh business day following the day of the request. When documents are deficient, they will be returned to the client for amendment and the expedite service time no longer applies.

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