Business Name Registration - Corporate Registry System

Summary

SOLE PROPRIETORSHIP    
The simplest form of business organization is a proprietorship in which one person performs all the functions that are required for the successful operation of a business.  The proprietor secures the capital, hires any employees, establishes and operates the business, assumes all the risks, accepts all profits or losses and pays all the taxes.  The proprietor is said to be self-employed.  

Liability arising out of the business activity is borne entirely by the proprietor.  All assets, whether business or personal, can be legally taken and used to discharge the liability.

A sole proprietorship can be operated under the individual's name without the need for registration.  

If a business name is used, or plurality of ownership is implied by the use of 'and Company' or similar wording, a  statutory declaration of this in writing must be filed with the Consumer, Corporate & Insurance Services Division of the Office of the Attorney General in compliance with the Partnership Act.  The registration cost is $65.

A business name should be registered before it is used, and stationery, signs, advertising, etc. should not be purchased until after the business name has been registered.  The reason for this is that the business name selected may not be available for registration by the Consumer, Corporate and Insurance Services Division due to the prior registration of the same or similar business name.

A person wishing to register a sole proprietorship is required to have the Consumer, Corporate & Insurance Services Division conduct a computerized name search of the proposed name prior to registration.  The fee to conduct a name search is $40.

When a sole proprietor discontinues business, the business name can be removed from the business name data base maintained in the Consumer, Corporate & Insurance Services Division of the Office of the Attorney General.  Removal of the name can be accomplished only by the registered owner of the business name.  The cost of registering a dissolution of sole proprietorship is $15.

A business name registration is valid for three years from the date of registration.  At that time, registration will expire and renewal of registration must be completed by the sole proprietor of the business name or the registration will be removed.  The fee to renew a sole proprietorship is $50.

A notification of the registration or dissolution of business names is published in the Royal Gazette.

PARTNERSHIP
A partnership is a voluntary contract between two or more competent persons to place their money, efforts, labour and skill in business with the understanding that there shall be a proportional sharing of profits and losses between them.  A partnership is governed by the Partnership Act.  For every partnership, there should be a written partnership agreement between the partners setting out their respective rights, interests and responsibilities.

A written partnership agreement should be drawn up, preferably by a lawyer, and signed by the partners before any business is conducted by the partnership.  (The Canada/PEI Business Service Centre has sample Partnership Agreement forms as well.)  If there is no partnership agreement, then the partners will be subject to various rules set out in the Partnership Act and some of those rules may not be suitable for a particular partnership.  For example, the Partnership Act provides that where there is no partnership agreement, all partners are entitled to share equally in the capital and losses sustained by the firm.  In cases where the partners wish to share profits and losses on some basis other than an equal sharing, a partnership agreement should set out the basis agreed upon by the partners.

Within three months of the formation of a partnership, a declaration of the partnership must be registered under the Partnership Act.  This can be done through the Consumer, Corporate & Insurance Services Division of the Office of the Attorney General.  The statutory declaration must be signed by all partners. The registration cost is $65.

Persons wishing to register a partnership are required to have the Corporate Section conduct a computerized name search of the proposed partnership name prior to registration.  The fee to conduct a name search is $40.

A partnership registration is valid for three years from the date of registration.  At that time, the registration will expire and a renewal of registration must be completed by the partners or the partnership registration will be removed.  The fee to renew a partnership registration is $50.

When a partnership discontinues business, the business name can be removed from the business names database maintained in the Consumer, Corporate & Insurance Services Division of the Office of the Attorney General.  Removal of the name can be accomplished only by the registered owners of the business name.   The cost of registering a Dissolution of Partnership is $15.

Notification of the registration or dissolution of a partnership is published in the Royal Gazette.

CORPORATIONS
The distinguishing features of the corporation, or limited company as it is often referred to, are as follows:

• The major advantage of incorporation is limited liability.  The limited company constitutes a legal entity and is distinct and separate from its shareholders, officers, and directors.  This means that no shareholder of a company is personally liable for the debts, obligations, or acts of the company.
• There is a potentially greater source of capital available because it is possible for people to invest without having to accept any responsibility for the actual running of the company.
• Ownership is readily transferable - shares may be transferred without affecting the management of the business.
• Because the company is a separate entity, it does not cease to exist with the death of the shareholder.
• There is greater flexibility concerning taxation.

There are two options to incorporate your business.  If your business activity is confined mainly to Prince Edward Island, then it is necessary to incorporate only as a provincial company under the Companies Act of P.E.I.  Should your business plan include expansion of your company markets to other provinces, you may be required to register in each additional province as an extra-provincial company.  

A corporation can be set up under the Canada Business Corporations Act. Many companies are incorporated federally if they are planning to operate in several provinces of Canada.  However, it should be noted that even a federally incorporated company is required to register as an extra-provincial corporation in several provinces if the company conducts business there.  

The cost of setting up a corporation is greater than that involved in forming a sole proprietorship or partnership.  The incorporation fee is $265.

A person wishing to incorporate a company is required to have the Consumer, Corporate & Insurance Services Division conduct a computerized name search of the proposed name prior to incorporation.  The fee to conduct a name search is $40.

There are also lawyers fees involved in the incorporation of a company under the Companies Act, as well as sundry costs such as the purchase of a corporate seal, minute book, etc.  A corporation is usually more complex than a proprietorship or partnership and involves more paperwork and higher legal and accounting fees.

Companies incorporated under the Companies Act of Prince Edward Island are required to file an annual return with the Consumer, Corporate & Insurance Services Division of the Office of Attorney General.  The annual return includes information on the name of the corporation, the date of incorporation, its fiscal year end, and a description of the business activities carried out on P.E.I. and outside the province.  The annual return also requires disclosure of the authorized and issued share capital of the company and a list of the names and addresses of the officers, directors, and shareholders of the company.  The annual return filing fee is $30.

Notification of the registration or dissolution of a corporation is published in the Royal Gazette.

TRADE NAME REGISTRATION
A corporation can register a business name under the Partnership Act in the same manner that an individual(s) can register a Sole Proprietorship or Partnership.  A corporation may wish to use a name, other than their corporate name, for the conduct of some or all of their business activity.

If a business name is used by a corporation, a declaration of this in writing must be filed with the Consumer, Corporate & Insurance Services Division of the Office of the Attorney General, in compliance with the Partnership Act.  An officer authorized by the corporation must complete the declaration on behalf of the corporation.  The cost to register a trade name is $65.

A corporation wishing to register a trade name is required to have the Consumer, Corporate & Insurance Services Division conduct a computerized name search of the proposed name prior to registration.  The fee to conduct a name search is $40.

When a corporation discontinues the use of a trade name, the name can be removed from the business names database maintained in the Consumer, Corporate & Insurance Services Division of the Office of the Attorney General.  Removal of the name can be accomplished only by the registered owners of the business name.   The cost of registering a Dissolution of Trade Name is $15.

A business name registration is valid for three years from the date of registration.  At that time, registration will expire and renewal of registration must be completed by an officer of the corporation or the business name will be removed.  The fee to renew a Trade Name is $50.

Notification of the registration or dissolution of a trade name is published in the Royal Gazette.

CO-OPERATIVE
A co-operative is a separate legal entity which may enter into contracts in its corporate name.  Each member of a co-operative association is entitled to one vote, thus the power of all the members is equal.  This differs from the limited company where the number of votes is determined by the number of shares held.  No member of a co-operative is personally liable for the debts, obligations or acts of the co-operative except to the amount of any subscribed shares as well as shares held.

Co-operatives are governed by the general principles which are outlined in the Co-operatives Associations Act, or, on the federal level, by the provisions of the Canada Co-operatives Associations Act.  The procedure set for thin the provincial act requires that the completed documents be submitted to the Inspector of the Co-operatives in the Consumer, Corporate & Insurance Services Division of the Office of the Attorney General.  The fee to incorporate a Co-operative is $250.

A person wishing to register a co-operative is required to have the Consumer, Corporate & Insurance Services Division conduct a computerized name search of the proposed name prior to incorporation.  The fee to conduct a name search is $40.

Notification of the registration or dissolution of a co-operative is published in the Royal Gazette.  The Royal Gazette publishing fee for a co-operative is $15.

Prince Edward Island Contact(s):
Ms. Sandra Furlotte
Office of Attorney General
4th Floor, Shaw Building
95 Rochford St,
P.O. Box 2000
Charlottetown, Prince Edward Island  C1A 7N8
Telephone: (902) 368-4577
Fax: (902) 368-5283
E-mail: skfurlotte@gov.pe.ca