When drafting Shareholders Agreements with clients, we often explore whether the corporation should consider taking out Key Person Insurance or whether we should create a requirement to obtain this type of insurance in the Shareholders Agreement.
I often get calls from clients asking what they require in order to do business in a particular province. Often these questions come from international clients who wish to do business in Canada, but we also have questions from businesses who operate in a particular province but wish to “do business” in another province.
Unfortunately, the quick answer is the dreaded “it depends”. Typically, to “carry on business” in a particular province in Canada, you need to be incorporated in that province or have a business license to operate in that province. If your company is already incorporated in a different jurisdiction (another province or foreign country), then you would need an Extra-Provincial License.
But what is considered “carrying on business”? Each province has legislation (whether their corporate statute or a specific extra-provincial corporations statute) that provides a definition of what is considered “doing business”.