Corporations Canada

Amendment Kit

Policy Statement 7.1
March 22, 2010

Table of Contents

This kit is intended only as a guide to users; it does not replace or take precedence over the CBCA.

Why use this kit?

The purpose of this kit is to help you submit an application to amend the articles of a business incorporated under the Canada Business Corporations Act (CBCA). By ensuring that you provide all the required information with your initial application, you can help Corporations Canada process your amendment documents swiftly.

In this kit, you will find:

  • general information about the role of Corporations Canada;
  • information concerning the various ways that an application to amend articles can be filed;
  • Form 4: Articles of Amendments and suggestions about how to fill out key parts of Form 4. Note that all the forms can also be obtained at the following address: www.corporationscanada.ic.gc.ca;
  • how to reach Corporations Canada.

We suggest that you consult with legal counsel or other professional advisers to consider other features that might be desirable in your corporate structure.

What documents must be filed in order to obtain a certificate of amendment?

An application to amend articles must include the following documents:

  • Completed Form 4: Articles of Amendment
  • Payment of the $200 fee

Depending on the amendments that you wish to make to the corporation's articles, you must also send the following documents:

If the amendments relate to the corporation's name

  • if you requested prior approval of your name, the letter from the Director appointed under the CBCA approving your name;
  • if you did not request prior approval of your name, a NUANS® report not more than 90 days old. If you are requesting a number name, it is not necessary to file a NUANS® report;
  • the $200 fee is not required in cases where the amendment's purpose is to add a French or English version to the corporation's name or to replace the existing legal element such as "Ltd." by a legal element common to both language versions, such as "Inc.". Please note that the Corporations

Canada Online Filing Centre cannot suppress the fee payable. In such cases, the applicant would be required to send Form 4 by fax or by mail and attach a note indicating the reasons why the applicant is not required to pay the fee.

If the amendments relate to the registered office:

  • Form 3: Change of Registered Office Address

There is no requirement that any form of "proof of facts" be submitted with the Articles of Amendment (such as affidavits or resolutions, for example). The Director is not responsible for verifying that the contents of the articles meet all the requirements of the CBCA; it is the responsibility of the applicant.

How to fill out Form 4: Articles of Amendment

Please see Form 4 for complete instructions on how to fill out the Articles of Amendment.

Please note that Form 4 must be signed by an authorized director or officer of the corporation.

Amendments to a corporation's articles

How to change a corporation's name

Please state the proposed name under item 3 A of the Form 4: Articles of Amendment.

  • There are a number of reasons why you may wish to change your corporation's name. For example, you may have incorporated under a number name, and you now wish to adopt a word name. Or you may wish to choose a new name, or add a French or English form of the name, or a bilingual or combined form. Before filing the Articles of Amendment, please ensure that you have the authorization of the shareholders, by resolution. For a number name, only a directors' resolution is required. The name you are proposing must be approved by the Director appointed under the CBCA. The Director will examine your request to determine whether it meets the requirements of the CBCA and the Regulations. The name proposed must be distinctive, must not cause confusion with any existing name or trade mark used in Canada, and must not be prohibited or misleading.

You may request approval of the name

  • before filing the Articles of Amendment
  • when you file the Articles of Amendment

How to submit a request to the Director for a change of name

Whether you apply for pre-approval or request approval when you file the Articles of Amendment, you are responsible for providing all of the facts relevant to the name you are proposing, as well as a NUANS® report.

  • Information relevant to the name proposed

You must submit the information relating to the circumstances that led to your choosing the name in question to the Director in writing. You may use the Corporate Name Information Form, or you may submit a letter to the Director describing your corporation's activities and addressing the following points:

  • WITH WHAT TYPE OF GOODS OR SERVICES will the proposed corporation be involved? How is this dissimilar to the activities of existing businesses with similar names? Even if your NUANS® report does not turn up names that appear to be similar to yours, the Director still needs this information to ensure that your proposed name does not suggest government sponsorship or that the proposed corporation will be carrying on the business of a bank or a trust, loan or insurance company, or merely describe, or misdescribe the business of your corporation.
  • WHERE will the proposed corporation carry on its business? You must show that this territory is not the same as that of other businesses with similar names and similar activities.
  • WITH WHAT TYPE OF CLIENTS will the proposed corporation conduct business (e.g., retailers, computer programmers, general public)? Indicate whether they are different from the types of people with whom existing businesses with similar names, involving similar goods or services and operating in a similar territory, will do business.
  • What is the DERIVATION OF THE DISTINCTIVE ELEMENT(S) of the proposed name? For example, what is the derivation of the word "Amtech" in the name "Amtech Enterprises Inc."? If you have a valid reason for wanting that distinctive element, the Director is less likely to conclude that you may be trying to trade on the goodwill of an existing business with a similar name.
  • Is the proposed corporation RELATED to existing businesses with similar names or trade marks? If so, you need the consent of their owners in writing.
  • Does the proposed corporation have a FOREIGN PARENT with a similar name that carries on business or is known in Canada? If so, you need consent in writing, and you must add (CANADA) or OF CANADA to the proposed name.
  • Did you make an EARLIER RESERVATION of a name similar to another name on the NUANS® report? Your request may be denied if it appears that an earlier reservation for the same name has been made by someone else.
  • Are you enclosing the CONSENT IN WRITING OF AN INDIVIDUAL WHOSE NAME APPEARS in the corporate name (other than an incorporator of the proposed corporation)? The consenting individual must also indicate that he or she has or had a material interest in the proposed corporation.

If you are satisfied that your corporate name is not likely to cause confusion, outline in your letter to the Director the arguments on which you have based your conclusion.

NUANS® REPORT

  • You must provide a search, that is, a NUANS® report under the federal rules for determining whether the name you are proposing is available. A NUANS® report is a document setting out the business names and trade marks registered in Canada that sound or look similar to the name you are proposing. The list is drawn from a national data bank of existing and reserved trade names as well as trade marks that have been registered and applied for in Canada.
  • A NUANS® report may be obtained in two ways:
  1. A NUANS® report may be requested from a private company known as a search house. You can find a list of these firms on Corporations Canada's web site by following the links "Online Filing", and "Corporations Canada Online Filing Centre", or in the Yellow Pages of your telephone directory under INCORPORATING COMPANIES, INCORPORATION NAME SEARCH, SEARCHERS OF RECORDS or TRADE MARK AGENTS - REGISTERED. There is a fee for this service.
  2. A NUANS® report may be ordered online at the Electronic Filing Centre, from the NUANS® Real-Time System. The fee is $20 payable by credit card (American Express®, MasterCard ® or Visa®). The system provides direct access to the NUANS® search service but does not provide the professional assistance and recommendations often available from a registered NUANS® search house. Applicants should note that a NUANS® report that is generated may be rejected if the proposed name does not meet the requirements of the CBCA name regulations.

When you order a NUANS® report, that report has a life of 90 days from the date it is requested. A search house can advise you whether your proposed name is likely to be accepted by the Director. The final decision, however, always rests with the Director.

NUANS® REPORT: SPECIAL CASES

Number name
Instead of a name, the directors may ask the Director to assign a number name. A number name must be requested when the Articles of Amendment are submitted. Obviously you do not submit a NUANS® report.
Bilingual or combined name
If your corporation intends to carry on business in a region or regions where both English and French are spoken, you may wish to consider adopting a bilingual corporate name.
The procedure is the same as for a unilingual name, except that one NUANS® report is required for each name or variation requested. Thus, two NUANS® reports must be filed in order to verify that the phonetically dissimilar English and French forms of a name are both distinctive.
Where the English and French forms are phonetically similar except for a legal element (e.g., Ltd./Ltée), only one NUANS® report will be necessary.
Please note that if the change is intended only to add the English or French form to the corporate name, the Certificate of Amendment will be issued free of charge.

Decision of the Director

If your request for pre-approval is accepted, the name in question will be reserved for you for the life of the search report. If the Director has not made a decision within that 90-day period, you will have to submit a fresh request to reserve a name, by ordering another NUANS® report.

If you have requested pre-approval and the Director's decision is favourable, your Articles of Amendment will probably be processed promptly when you file them, provided that all other relevant information is submitted at the same time. Remember to include the letter approving your name when you submit your Articles of Amendment.

If your proposed name is returned to you, you can still submit a written request for the Director to re-examine his decision, having regard to the additional information. However, you will save time and money if you include all relevant information in your initial application.

How to report a change in the province or territory of the registered office

  • When the registered office has moved out of the province or territory shown in the articles, you must indicate the new province or territory of the registered office under item 3 B of the Form 4: Articles of Amendment. In addition to the Articles of Amendment, you must also file a completed Form 3: Change of Registered Office Address.
  • Before filing Form 4, you must obtain, by resolution, the authorization of the shareholders of your corporation. Please note that you must file the Articles of Amendment before the move can be made.
  • When the registered office has moved inside the province or territory shown in the Articles of Incorporation, no Form 4: Articles of Amendment needs to be filed. However, you must file a Form 3: Change of Registered Office Address with the Director within 15 days of the change of address. No fee is applicable.

How to change the structure of the corporation (classes or maximum number or shares that the corporations is authorized to issue, or restrictions on share transfers)

Please state the nature of the change under item 3D of the Form 4: Articles of Amendment.

Before filing the Articles of Amendment with the Director, the corporation must obtain a special resolution of the shareholders. By filing Articles of Amendment, the corporation may make the following changes to its structure:

  • amend the maximum number of shares that the corporation is authorized to issue;
  • create new classes of shares;
  • reduce or increase the stated capital, if the stated capital appears in the Articles of Incorporation;
  • change the designation of all or any of its shares and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any of its shares, whether issued or unissued;
  • change the number of shares, whether issued or unissued, in a class or series, or change the class or series of the shares;
  • divide a class of shares, whether issued or unissued, into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions thereof;
  • authorize the directors to divide any class of unissued shares into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions thereof;
  • authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series;
  • revoke or change any authority conferred on directors in respect of shares;
  • add, change or remove restrictions on the issue, transfer or ownership of shares.

You may vary the composition and complexity of share structures for particular situations in countless ways. The clauses given here are only examples of the most common kinds of share structures used by many incorporators; and they are by no means mandatory or exhaustive. You may wish to seek legal advice if you want to use other clauses to be sure that they are permitted under the CBCA.

Examples:

  • For a single class of shares:

"The corporation is authorized to issue an unlimited number of shares of one class."

or

"Unlimited number of shares in a single class."

  • For two or more classes of shares:

"The corporation is authorized to issue an unlimited number of Class A and Class B shares. The Class A shares shall be entitled to vote at all meetings of shareholders except meetings at which only holders of a specified class of shares are entitled to vote and to receive such dividend as the board of directors in their discretion shall declare. Subject to the provisions of the Canada Business Corporations Act, the Class B shares shall be non-voting. Upon liquidation or dissolution, the holders of Class A and Class B shares shall share equally the remaining property of the corporation."

or

"The corporation is authorized to issue Class A and Class B shares with the following rights, privileges, restrictions and conditions:

1. Class A shares, without nominal or par value, the holders of which are entitled:

  1. to vote at all meetings of shareholders except meetings at which only holders of a specified class of shares are entitled to vote; and
  2. to receive the remaining property of the corporation upon dissolution.

2. Class B shares, without nominal or par value, the holders of which are entitled:

  1. to a dividend as fixed by the board of directors;
  2. upon the liquidation or winding-up of the corporation, to repayment of the amount paid for such shares (plus any declared and unpaid dividends) in priority to the Class A shares, but they shall not confer a right to any further participation in profits or assets.

3. The holders of Class B shares shall be entitled to vote at all meetings of shareholders.

or

The holders of Class B shares shall not, subject to the provisions of the Canada Business Corporations Act, be entitled to vote at any meetings of shareholders."

  • For shares in a series:

"The directors may authorize the issue of one or more series within each class of shares, and may fix the number of shares in each series, and determine the rights, privileges, restrictions and conditions attaching to the shares of each series subject to the limits provided in the Articles." (As noted earlier, you may create a series of shares immediately in the Articles, rather than waiting until later.)

  • Share redemption:

If a fixed price is not stated, a redemption formula that can be determined in dollars must be used.

"The said Class X shares or any part thereof shall be redeemable at the option of the corporation without the consent of the holders thereof (at a price of $__ per share) or (at a price equal to the amount paid per share) plus any declared and unpaid dividends."

How to change the number of directors

  • Please state the nature of the change under item 3C of the Form 4: Articles of Amendment.

You may specify a minimum and maximum number or a fixed number of directors. However, to permit cumulative voting, the number of directors must be fixed. Moreover, if the corporation is a "distributing" corporation, there must be at least three directors.

Example:

"A minimum of one and a maximum of seven."

or

"Five directors."

  • You do not need to file Form 4: Articles of Amendment if you are changing the number of directors within the range of minimum and maximum numbers specified in the Articles of Incorporation. However, you must file the completed Form 6: Changes Regarding Directors within 15 days of the change in the composition of the board of directors or receipt of the notice of change of address of a director. No fee is applicable.
  • You do not need to file Articles of Amendment when new directors are appointed, vacancies occur on the board of directors or the corporation receives a notice of change of address from a director. However, you must file the Form 6: Changes Regarding Directors within 15 days of the change in the composition of the board of directors or receipt of the notice of change of address of a director. No fee is applicable.

How to change the restrictions on business that the corporation may carry on

  • Please state the nature of the changes under item 3D of the Form 4: Articles of Amendment.
  • If it proves necessary to limit the corporation's activities by prohibiting certain kinds of business activity, you may do so by filing Articles of Amendment. Generally, the provision should be worded negatively, that is, it should be a statement of what the corporation MAY NOT do, rather than a list of its "objects." The following preamble is suggested:

"The business of the Corporation shall be limited to the following: ..."

  • You may also change or remove any business restrictions that were set out in the existing articles. The following preamble is suggested:

"No limit on the business of the Corporation."

It should be noted that section 3 of the CBCA prohibits CBCA corporations from conducting the business of a bank or an insurance or trust and loan company, or carrying on business as a degree-granting institution.

How to amend the other provisions

The CBCA allows you to include a number of additional provisions in the Articles of Incorporation. These provisions are often included to satisfy requirements of other legislation or institutions.

You may change or delete any extra provisions set out under Item 7 of the Articles of Incorporation by filing Form 4: Articles of Amendment. Please state the nature of the changes under Item 3D of the Articles of Amendment.

The following list illustrates the kinds of wording generally adopted for the most frequently occurring features. The listing is not definitive, nor is the wording mandatory. You may wish to seek legal advice if you want to use other clauses to be sure that they are permitted under the CBCA.

  • Directors' borrowing power:

A provision regarding directors' borrowing powers and the delegation of those powers is sometimes used to limit the authority of directors and/or to satisfy lending institutions:

Example:

"If authorized by the by-law which is duly made by the directors and confirmed by ordinary resolution, the directors of the corporation may from time to time:

  1. borrow money on the credit of the corporation;
  2. issue, reissue, sell or pledge debt obligations of the corporation;
  3. mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the corporation, owned or subsequently acquired, to secure any debt obligation of the corporation.

Any such by-law may provide for the delegation of such powers by the directors to such officers or directors of the corporation to such extent and in such manner as may be set out in the by-law.

Nothing herein limits or restricts the borrowing of money by the corporation on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the corporation."

  • Cumulative voting by directors:

This clause is allowed only if the number of directors is a fixed number:

Example:

"There shall be cumulative voting for directors."

  • Increase the majority vote by shareholders:

Example:

"In order to effect any (ordinary and/or special) resolution passed at a meeting of shareholders, a majority of not less than _____ per cent of the votes cast by the shareholders who voted in respect of that resolution shall be required."

  • Specify the foreign form of your corporate name for use outside Canada:

Example:

"It is hereby provided that the corporation may use and may be equally designated by the following form outside Canada: ..."

(Note: Do not use item 7 to state the English or French form of the corporate name, for use inside Canada; for that use item 1)

  • Specify voting rights on fractional shares:

Example:

"A holder of a fractional share shall be entitled to exercise voting rights and to receive dividends in respect of said fractional share."

  • Specify that some shareholders have a pre-emptive right:

Example:

"It is hereby provided that no shares of a class of shares shall be issued unless the shares have first been offered to the shareholders holding shares of that class, and those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at such price and on such terms as those shares are to be offered to others."

Under the CBCA, directors are not required to own shares of the corporation. However, where incorporators do wish to provide for directors to own shares, the following wording is normally used:

Example:

"No person otherwise qualified shall be elected or appointed as a director unless such person beneficially owns at least one share issued by the corporation."

  • You may prescribe how shareholders will fill a vacancy on the board of directors:

Example:

"Any vacancy on the board of directors shall be filled by a vote of the shareholders."

  • You may specify a quorum of directors:

Example:

"The quorum for any meeting of the board of directors shall be___________."

When should you submit Form 7: Restated Articles of Incorporation?

When a corporation has effected several amendments to its articles, it may later become desirable to consolidate all the amendments with the original articles in one document, for the sake of convenience or greater clarity. Directors can authorize "restatement" of the articles by completing and filing Form 7: Restated Articles of Incorporation, with the Director. This form should not be used to make substantive changes not already made by filing Form 4: Articles of Amendment.

The following must be filed:

  • completed Form 7: Restated Articles of Incorporation;
  • a $50 filing fee, payable to the Receiver General for Canada.

Note: No fee is payable for a restated certificate of incorporation when issued with a certificate of amendment. If the articles of amendment are submitted through the Corporations Canada Online Filing Centre, the restated articles of incorporation must be received (by email or fax) on the same day.

Additional information and how to reach Corporations Canada

For additional information on Corporations Canada products and services, please visit Corporations Canada's Web site or call 1-866-333-5556.

You can also contact Corporations Canada at:

Client Services Section
Corporations Canada
Industry Canada
9th floor, Jean Edmonds Tower South
Ottawa, Ontario K1A 0C8
Fax: 613-941-0601
www.corporationscanada.ic.gc.ca

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