A company is said to have continued when it has moved from one jurisdiction to another. For instance, if a company moves from the province of Ontario to the province of Alberta, this would be considered to be a continuance. Alternatively, if a company moves from Bermuda to the province of British Columbia this would also be a continuance.
A continuance can be described as the procedure by which a company governed by the corporate laws of a certain jurisdiction ceases to be governed by those laws and becomes governed by the laws of another jurisdiction or by the laws of a different statute in the same jurisdiction.
it is not enough for a company to change its address to the new location. It must obtain permission from the Companies Branch in its current jurisdiction to leave and then obtain permission from the Companies Branch in the new jurisdiction to come into that location. There will be numerous requirements from both jurisdictions in order to do this.
Definition of the Jurisdiction of a Company
The jurisdiction of a company is the place in which it was incorporated, amalgamated or continued. The jurisdiction of a company can be a province, a State, or a country.
In Canada companies can be incorporated, amalgamated or continued in any province or territory of Canada and, as well, in the federal jurisdiction.
In the United States of America, companies can be incorporated, amalgamated or continued in any of the States.
In other countries such as Bermuda, Barbados, etc. companies are incorporated in those countries.
Can a Company Move to Any Jurisdiction
In most cases, a company can move anywhere it wishes. It can move from a province or territory to another province or territory within Canada. It can also move from a province or territory in Canada to a State in the United States. It can as well move from a province or territory in Canada to another country. In some cases, the laws of the jurisdiction will not allow for a continuance to occur.
Exporting and Importing a Business from One Jurisdiction to Another
When a company wishes to leave its current jurisdiction it is said to be “exporting” from its current jurisdiction and when it enters the new jurisdiction it is said to be “importing” into the new jurisdiction. If for instance a company was moving from Bermuda to the province of Ontario, it would be said that it was exporting from Bermuda and importing to Ontario.
Statute Requirements to Continue into Another Jurisdiction
It is important to understand that when a company is exporting from a jurisdiction there are certain requirements for this to be approved and when it imports into another jurisdiction there are requirements for importing as well.
When considering exporting from a jurisdiction, the governing statute of the company in its current jurisdiction must be reviewed to determine what the requirements are for exporting to another jurisdiction and, as well, the statute requirements of the importing jurisdiction must also be reviewed. It is a two-step process.
It will depend on where the company is leaving from and where the company is going to as to what those requirements are.
One of the main statute requirements for exporting a company is to ensure all taxes have been paid and that the company is in good standing with its corporate filings. For instance, all tax returns must be filed, assessed and any outstanding taxes must be paid. Further, all corporate annual return filings which may be required by the Companies Branch must be up-to-date. Each jurisdiction will request verification of these matters in its own format.
Confirmation from those departments may be required in the form of a consent letter from the tax department and/or a Certificate of Status (Certificate of Good Standing) from the Companies Branch in that jurisdiction.
Amendments to Articles Upon Continuance
It is possible with the right approvals to make changes to a company’s charter upon continuance. In some cases, the Articles will need certain modifications to abide by the the laws of the importing jurisdiction.
What Happens Upon Continuance – Organizing the Company in Its New Jurisdiction
Once a company has been continued into the new jurisdiction, it must inform the old jurisdiction that it has moved. The reason for this is that although the old jurisdiction has consented to the continuance, there is no way for the old jurisdiction to know when that continuance occurred so it is usually mandated by law that the company provide the old jurisdiction with a copy of the Articles of Continuance.
Another requirement would be for the company to pass organizational resolutions to re-state the directors, officers and shareholdings of the company as of the date of continuance.
New general operating by-laws and possibly borrowing by-laws will need to be enacted by the directors and confirmed by the shareholders upon continuance since the current by-laws of the company would have been passed pursuant to the laws of the exporting jurisdiction. The laws of every jurisdiction require by-laws to be put into place pursuant to the laws of that jurisdiction.
Continuing from an Province or Territory in Canada to the Federal Jurisdiction
Sometimes companies wish to continue into another jurisdiction for other reasons besides an address change. A provincial or territorial company in Canada may wish to change to the federal jurisdiction in order to conduct business right across Canada.
There is a misconception that if a company registered in Canada wishes to conduct business across Canada, it must register in the federal jurisdiction and once registered it automatically has the right to carry on business everywhere in Canada.
It should be realized that any company registered in Canada, in any province or territory, can conduct business in any other province or territory without registering federally. It would extra-provincially register in the other provinces/territories.
A Federal company incorporated in Canada must register in the province in which its registered office address is located. If a Federal company wishes to conduct business in other provinces and/or territories in Canada it must register extra-provincially in each of those provinces and/or territories in order to conduct business. Each jurisdiction in Canada has its own definition of carrying on business in Canada which should be reviewed before registering since it can be expensive to register and there are annual registration costs.
One of the few benefits of continuing from a province or territory to the federal jurisdiction is that the name of the company is cleared throughout Canada and there is a little bit more protection for the name. If the federal company wishes to register extra-provincially it usually gets an automatic name clearance if its home jurisdiction is federal.
In light of the above limited benefits to continuing into the federal jurisdiction, it should also be noted that the federal government clears the company names very carefully and it is possible that the current name of your company will not be accepted in the federal jurisdiction. In that case the company would either have to change its name or stay in its home province/territory and register extra-provincially in any other provinces or territories as it wishes.