All provinces and territories in Canada, require corporations formed in another jurisdiction to follow a registration process before carrying on business.
A corporation that is planning on carrying on business in Ontario but is incorporated under the laws of a province or territory outside of Ontario will be subject to the Extra-Provincial Corporations Act, R.S.O. 1990, c. E.27 (“EPCA”). An extra-provincial corporation is a corporation, with or without share capital, incorporated or continued otherwise than by or under the authority of an Act of the Legislative Assembly.
The EPCA provides that an extra-provincial corporation carries on its business in Ontario if it:
has a resident agent, representative, warehouse, office or place where it carries on its business in Ontario;
holds an interest, otherwise than by way of security, in real property located in Ontario; or
otherwise carries on business in Ontario.
An extra-provincial corporation will not be considered to be carrying on its business in Ontario by reason only that it takes orders for, buys or sells goods, wares and merchandise, or offers or sells services by use of travelers or through advertising or correspondence (EPCA, s. 1(3)). Therefore, determining whether or not a corporation is carrying on business in Ontario is a question of fact. In determining whether an extra-provincial corporation is carrying on business in Ontario, a court may consider the location at which contracts are executed, locations of delivery, where title to goods passes and whether orders are solicited.
There are three classes of extra-provincial corporations, which are as follows:
Class 1: Corporations incorporated or continued by or under the authority of an Act of a legislature of a province of Canada (i.e. corporations from other Canadian provinces);
Class 2: Corporations incorporated or continued by or under the authority of an Act of the Parliament of Canada or of the legislature of a territory of Canada (i.e. federal corporations or corporations from Canadian territories); and
Class 3: Corporations incorporated or continued under the laws of a jurisdiction outside of Canada (i.e. corporations formed in a foreign country).
Corporations incorporated at the federal level are governed by the EPCA (see Class 2). However, they are not subject to the name requirements under the EPCA and are not required to file annual returns.
The EPCA requires foreign corporations to obtain a licence to do business in Ontario (EPCA, s. 4(2)), and requires all extra-provincial corporations to abide by the name requirements within the EPCA and the General Regulation.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. Jaswal Law would be pleased to provide additional details or advice about specific situations if desired. No part of this publication may be reproduced without the prior written permission of Jaswal Law.