Regardless of whether a company is incorporated provincially (Ex. the Business Corporations Act of BC or the Business Corporations Act of Alberta) or federally (the Canada Business Corporations Act), a company that operates in a given province must register under the applicable Act. The definitions and timelines relating to the registration requirement vary from province to province, but the general rule is as follows: Subject to an exemption for the registrar of the applicable province, a company must register under the Act that applies to the province in which the company operates.
Since we have lawyers licensed in British Columbia and Alberta, we will use those two provinces as examples. Please see the applicable sections relating to extraprovincial registration of companies in British Columbia and Alberta below:
Section 375 of the Business Corporations Act of British Columbia requires a “foreign entity” (ie. a company incorporated under another statue) to register as an “extraprovincial company” under within 2 months of beginning to carry on business in BC. A foreign entity is deemed “carry on business” in BC if:
(a) its name, or any name under which it carries on business, is listed in a telephone directory:
(i) for any part of BC; and
(ii) in which an address or telephone number in BC is given for the foreign entity;
(b) its name, or any name under which it carries on business, appears or is announced in any advertisement in which an address or telephone number in BC is given for the foreign entity;
(c) it has, in BC;
(i) a resident agent; or
(ii) a warehouse, office or place of business; or
(d) it otherwise carries on business in BC.
The Business Corporations Act of British Columbia states that a company is not carrying on business in BC if it is a bank, its only business in BC is constructing and operating a railway or it merely has an interest as a limited partner in a limited partnership carrying on business in BC.
Section 279 of the Business Corporation Act of Alberta requires an “extra-provincial corporation” to register within 30 days of commencing carrying on business in Alberta. An extra-provincial corporation is deemed to be “carrying on business” in Alberta if (see section 277):
- its name, or any name under which it carries on business, is listed in a telephone directory for any part of Alberta;
- its name, or any name under which it carries on business, appears or is announced in any advertisement in which an address in Alberta is given for the extra‑provincial corporation;
- it has a resident agent or representative or a warehouse, office or place of business in Alberta;
- it solicits business in Alberta;
- it is the owner of any estate or interest in land in Alberta;
- it is licensed or registered or required to be licensed or registered under any Act of Alberta entitling it to do business;
- it is, in respect of a commercial vehicle as defined in the Traffic Safety Actof Alberta, the holder of a certificate of registration under the Traffic Safety Actof Alberta, unless it neither picks up nor delivers goods or passengers in Alberta;
- it is the holder of a certificate as defined in section 130 of the Traffic Safety Act of Alberta, unless it neither picks up nor delivers goods or passengers in Alberta; or
- it otherwise carries on business in Alberta.
The Business Corporations Act of Alberta states that a company does not need to extraprovincially register if it is licensed as an insurer under the Insurance Act, is registered under the Loan and Trust Corporations Act or is a cooperative as defined in section 1(1)(v) of the Cooperatives Act. In Addition, the Registrar of Alberta may exempt an extra-provincial corporation from the payment of fees if the Registrar is satisfied that the extra-provincial corporation does not carry on business for the purpose of gain.
It is important to note the broad scope of section 375(d) of the Business Corporations Act of British Columbia and section 279(i) of the Business Corporations Act of Alberta legislation. Specifically of note is the general “catch-all” provision requiring registration if a company is “otherwise carrying on business” in the province. These sections grant significant discretion to courts to determine whether or not a company is carrying on business in BC or Alberta, as applicable.
When in doubt, seek legal advice and/or register!
It is also worth noting that some provinces (such as Manitoba) require companies to register before commencing operations in the province.
The penalties for failing to extraprovincially register also vary from province to province. In BC, the penalty for failing to extraprovincially register is $100.00 per day. Additional potential consequences of failing to register include things such as delays or inability to contract with third parties, acquire land or obtain financing. In addition, depending on the terms of existing agreements, failure to extraprovinically register in accordance with the laws of the relevant province(s) may inadvertently put the company in default of its contractual obligations.
The process for registering as an extraprovincial company is relatively straightforward. In most cases, the registration process can be completed within 1-3 business days. Annual costs for maintaining an extraprovincial company are relatively inexpensive although it does generally require having an address for service in that jurisdiction which will often be another law firm. Accordingly, it is often prudent for a company to register as an extraprovincial company in every jurisdiction in which is does or intends to carry on business.
If you have any questions regarding the above, extraprovincial registration or business law in general, please do not hesitate to reach out to our office at (778) 940-3768.
Author: Danielle (Dani) Brito
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (778) 940-3768 or any of our lawyers practicing in the area of business law at the following:
Danielle (Dani) Brito: [email protected]
Jennette Vopicka: [email protected]
