Glossary of Terms

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Annual Return: Form 22 under the CBCA (see Appendix H of this guide). This form is not to be confused with annual financial statements or annual reports.

Articles of Incorporation: Form 1 under the CBCA (see Appendixes A and B of this guide). To incorporate under the CBCA, you must correctly complete Form 1, together with Form 3 and Form 6 (see Appendixes C and D of this guide), all bearing original signatures, except when sent electronically (see Chapter 2, Submitting Articles of Incorporation, of this guide) and deliver them to Corporations Canada at the address listed in the Contacts section. Corporations Canada will keep the documents on file and return a copy to you with your certificate of incorporation. The articles, when filed, create your corporation, and set out important matters such as the number of directors and types of shares a corporation will have. This form (as are all forms referred to in this guide) is available on this website or by mail (see the Contacts section).

By-Laws: Basically, the agreement between the company and its shareholders setting out the internal rules by which the corporation will function. These often deal with matters such as meetings of directors and shareholders (see Appendix F of this guide).

Corporations Canada (formerly the Corporations Directorate): The branch of Industry Canada that administers the CBCA, and the office with which all filings, such as articles of incorporation, are made.

Director: An individual elected by the shareholder(s) to supervise the management of a corporation. Together, all directors of a company are referred to as the "board of directors." All federal corporations are required to have one or more directors, a majority of whom must be ordinarily resident in Canada.

Director Appointed Under the CBCA: The individual appointed by the federal Minister of Industry under the provisions of the CBCA to independently administer the statute. This individual is referred to as the "Director under the CBCA."

Dissolution: The act of ending the existence of a corporation, under certain circumstances, by filing the required documents with Corporations Canada. Your company could also be dissolved by the Director under the CBCA for failure to comply with the legislation (see "Administrative Dissolution and Revival" in Section 4.5, Common Filing Requirements, of this guide).

Dividend: The share of profit payable to shareholders on their shares.

Federal Incorporation: Incorporation under the CBCA rather than under a provincial or territorial statute.

Incorporation: The act of establishing a corporation by filing the required documents.

Indemnity: Compensation for loss; a promise to pay for costs incurred by a person in certain circumstances.

Officer: An individual appointed by the director(s) of a corporation to manage the day-to-day business of a company, such as president, vice president, secretary, treasurer, etc. The position of officer is distinct from that of director (see above), although one individual in a small corporation very often occupies both positions.

Private Company: In general, a company that does not sell its shares to the public (i.e. is not listed on a stock exchange). The transfer (sale) of shares in the company is restricted in some way, such as by the requirement that the directors or shareholders have to approve in advance any transfer of shares.

Quorum: The stated minimum number of people entitled to attend a meeting who must be present for business to be conducted. Company by-laws may specify the minimum number of directors who must be present at a meeting of the board of directors or the minimum number of shareholders who must be present at a shareholders' meeting; if not, the CBCA sets out quorums.

Resolution: A statement of a decision reached either by directors or by shareholders of a company. A resolution may be written if all parties agree and sign it, or may be made orally in a meeting on the basis of a number of votes cast and then recorded in the minutes. An ordinary resolution is one passed by a majority of the votes cast, while a special resolution is one passed by a majority of not less than two thirds of the votes cast.

Share: A measure of ownership of a corporation. Some people refer to the share certificate as a stock. Shares are distinguished from securities, which are any type of investment instrument, including shares.

Shareholder: An owner in a corporation; a person holding shares in a corporation. Because many activities, such as electing directors, must be done or approved by shareholders, an active corporation must have at least one shareholder.

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