What is a Federal Co-Op with Share Capital?
A federal co-op with share capital in Canada is a cooperative that operates under the Canada Cooperatives Act and is structured to include share capital. This means that it issues shares to its members, who contribute equity to the cooperative.
Unlike traditional cooperatives that might rely solely on membership fees or member contributions without issuing shares, a co-op with share capital combines cooperative principles with a shareholding structure to raise capital and fund its operations.
What are the benefits of Federal Co-Op?
- Capital Raising:
- Issuing shares allows the co-op to raise significant amounts of capital, which can be used for growth, development, and other strategic initiatives.
- Member Investment:
- Members who purchase shares have a vested interest in the success of the co-op, fostering a strong sense of ownership and commitment.
- Democratic Control:
- Despite having share capital, the principle of one-member-one-vote ensures that control remains democratic, preventing domination by a few members with large shareholdings.
- Profit Sharing:
- Members benefit from the co-op’s success through profit distributions based on patronage or dividends on shares, aligning members’ interests with the cooperative’s performance.
- Legal Recognition:
- Incorporation under the Canada Cooperatives Act provides a clear legal status, enhancing credibility and trust among members, investors, and other stakeholders.
Who can start a Federal Co-Op?
- Minimum of 3 individuals above the age of 18;
- 25% of directors must be a Canadian Citizen or a Permanent Resident (PR).
Requirements:
- Minimum of 3 directors are required to start a Federal Co-Op.
- The registered office address must be a physical address in Canada, P.O. Box address is not allowed. If you don’t have a local provincial address, we provide registered address and mail scanning service.
- A Federal corporation, although registered federally, must also register in the province or territory where the corporation is conducting business.
Step 1. Name your corporation.
- Generally a name should have two elements: distinctive and descriptive. The distinctive element can’t be a common English word, it has to be unique or made up words while descriptive elements can be common English words. An example is “Mike Construction”. In this name ‘Mike’ is the distinctive/unique element; ‘Construction’ is the descriptive element.
- The corporate name of a co-operative shall include the word “co-operative” in English or “cooperative” in french as part thereof. The word “co-operative” may be abbreviated to “co-op” in English or “coop” in French.
- A Federal NUANS report and name Pre-approval is required to register a Named Corporation.
Step 2. Select your articles of incorporation:
This step establishes the structure of your corporation. Choose the right share structure:
- Basic: with unlimited common shares with no specific share class.
- Standard: common shares with class A voting and class B non-voting.
- Custom: this share structure allows to categorize shares into many types such as common, preferred, voting, non-voting etc.
Step 3. Establish the office address:
- The registered office address must be a physical address in Canada, P.O. Box address is not allowed.
- You are allowed to have a legal land description address too but must have a P.O. Box connected to it.
- If you don’t have a local provincial address, we provide registered address and mail scanning service.
Step 4. Decide who will be a director, shareholder, officer and Incorporator.
Director – the head of the corporation. Minimum of 3 directors are required to start a Federal Co-Op.
Shareholder – owns the corporation and receives profit from the business as dividends and shares.
Officer – anybody including an employee, no decision making power.
Incorporator – is the person under whose authority the corporation is created. Is not changeable.
Mandatory items to run a business.
- Minute book: consists of bylaws, share structure, minutes & other legal sections. Without it, a corporation is not complete.
- Initial Return: It’s a mandatory filing with Service Ontario for each new corporation. It has to be filed within 60 days of Incorporation. It confirms the details of the corporation. It is not a tax filing with CRA.
- Business Number: It is a unique identification of your business with the Canada Revenue Agency. It is required to register accounts like GST/HST, Payroll, Import/Export accounts.
- Corporate Tax ID: It is like a SIN number for a corporation.
- HST Registration, Harmonized Sales Tax: If you are selling goods and collecting HST you must have an HST account. every time a business incurs an expense – be it rent or paying for goods – it pays HST, if you set up the account, you can claim it back.
- Payroll Account: If you have employees, including yourself, you must set up a payroll account.
- Import/Export: If your goods or raw materials cross the Canadian border, you are required to clear customs using the Import/Export account.
- WSIB Account: It’s the Workplace Safety and Insurance Board registration. If your corporation has employees (except directors and shareholders) you must register for WSIB.
- Annual Return: A corporation must file its Annual Return with the Government every year to keep it active. You may add Annual Return to your package to avoid the risk of forgetting it. We will take care of it!
You can find out more information about annual return here:
How do we process the order?
- We start by verifying the payment and reviewing the order to ensure an error-free application.
- For named companies, we conduct name searches, make reservations, and obtain name approval.
- Next, we prepare the application and articles of incorporation.
- Before registering the corporation, we send a draft for a final check.
- Once approved, we register the corporation according to the chosen queue and promptly email all registration documents to the customer.
- Finally, we complete any additional services included in the package, such as initial returns and CRA accounts.
Timeline
The standard incorporation time for a Federal Co-op is 30 business days. However, for an additional fee, we can expedite the process and complete it within 5 business days. Please be aware that the turnaround time is until 3 p.m. EST. The processing queue includes incorporation and emailing the Certificate, Articles and Electronic Minute Book (if included). The remaining processes in this package like Business Number, CRA programs accounts set up, WSIB registration, etc. are initiated after incorporation processes.
What will you receive?
After the registration is completed we will send you a Certificate and Articles of Incorporation and an Electronic Bylaws & Minutes (if included) by an email.
Why choose us?
- Our team of legal professionals and incorporation experts can establish your corporation within two business hours!
- Our online form offers the option to select, customize, and build your bundle according to your preferences. Simply complete the straightforward form on our website, and we’ll handle the rest.
- Our online form offers the option to select, customize, and build your bundle according to your preferences. Simply complete the straightforward form on our website, and we’ll handle the rest.
- Online Business Registry is an official intermediary for Ontario Province and a registered member of Corporations Canada.
- Our team of legal professionals and incorporation experts can establish your corporation within two business hours!
- Our online form offers the option to select, customize, and build your bundle according to your preferences. Simply complete the straightforward form on our website, and we’ll handle the rest.
- Our online form offers the option to select, customize, and build your bundle according to your preferences. Simply complete the straightforward form on our website, and we’ll handle the rest.
