EXPANDING JURISDICTIONS OF BUSINESS
To schedule an appointment, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com
Business expansion requires ever increasing legal consideration and procedural steps, although various provincial governments have sought to streamline many of these processes if the business corporations utilize legislative initiatives designed to increase inter-provincial commerce and business expansion. Yet, just as out-of-province corporations need to register in Alberta, an Alberta provincial corporation needs to extra-provincially register in any other Canadian province or territory where it intends to "carry on business." This is a fundamental principle of corporate law in Canada.
A. Jurisdictional Authority
-
Each province and territory in Canada has its own corporate legislation. While your corporation is legally recognized in Alberta because it's incorporated under the Alberta Business Corporations Act, that recognition doesn't automatically extend to other jurisdictions. To operate legally in another province, your Alberta corporation must comply with that province's specific corporate laws.
B. "Carrying on Business" Requirement
-
Similar to Alberta, every other province and territory has its own definition of what constitutes "carrying on business" within its borders. This can vary slightly but generally includes activities like:
-
Having a physical presence (office, warehouse, employee).
-
Having a telephone number or advertising with a local address.
-
Actively soliciting business.
-
Owning land or property.
-
Being licensed or registered under other provincial acts.
-
-
If your Alberta corporation meets these criteria in another province, extra-provincial registration is mandatory.
C. Legal Standing and Rights
-
Without extra-provincial registration in the new jurisdiction, your Alberta corporation will not have legal standing there. This means it might not be able to:
-
Enter into legally binding contracts.
-
Own property.
-
Open a bank account.
-
Sue or be sued in that province's courts.
-
Register its name or secure intellectual property rights.
-
Obtain necessary licenses or permits for operations.
-
D. Compliance and Penalties
-
Operating without proper registration can lead to significant fines, penalties, and legal complications. Provincial authorities can issue cease and desist orders, and your corporation could be barred from enforcing contracts it has entered into in that jurisdiction.
E. Transparency and Accountability
-
Extra-provincial registration ensures that the new province's government has a record of your corporation and can easily serve legal documents or notices if needed. It also provides transparency for local businesses and consumers dealing with your corporation.
F. Credibility and Trust
-
Registering extra-provincially demonstrates your commitment to operating legitimately and responsibly in the new market. This builds credibility with customers, suppliers, financial institutions, and other stakeholders.
As a corporate business lawyer, I have been dealing with the corporate law and business matters for over a quarter century, and understand the importance of asking the appropriate questions, and follow-up questions, such that we might optimize the structure of an incorporated business and maximize it corporate legal capacity in furtherance of one's commercial ventures.
Providing corporate-commercial legal advice and strategic direction to business enterprises engaged as Alberta provincial corporations or federal corporations, from business formation to corporate governance to contracts and business transactions. Contact our law firm at Chris@NeufeldLegal.com or 403-400-4092 to schedule a confidential initial consultation for your business.
