Expanding a business across provincial borders in Canada requires extra-provincial registration to ensure legal compliance and uninterrupted operations.
This article outlines the requirements for extra-provincial corporations carrying on business in Manitoba, the consequences of failing to register, and the available remedies to mitigate risk.
The Corporations Act
Under section 187(3) of The Corporations Act (Manitoba) (the Act), an extra-provincial corporation — meaning a corporation not incorporated under the Act, including a corporation incorporated in another Canadian province, a federal corporation, and a non-Canadian Corporation — must register with the Manitoba Companies Office within 30 days of commencing business activities in the province. Failure to do so may result in ongoing fines until registration is completed.
A corporation operating in Manitoba without proper registration, as well as each of its directors, officers, representatives, or agents, may be fined $50 per day for each day the corporation remains unregistered.
An unregistered extra-provincial corporation is also prohibited from commencing, continuing, or maintaining a legal action in Manitoba courts on a contract governed by Manitoba law until properly registered.
Why Extra-Provincial Registration Matters
Extra-provincial registration enables a corporation to operate legally and fulfill its obligations in another province or territory. Since each jurisdiction has its own corporate and regulatory framework, registration ensures compliance with the specific legal requirements where the corporation carries on business.
Registration also protects a corporation’s legal rights in the additional jurisdiction. It creates a recognized framework for doing business, entering contracts, and enforcing legal rights. By registering, corporations enhance transparency and accountability, allowing regulatory authorities and the public to access key information about their operations.
Extra-provincial registration also prevents name conflicts that could arise if another corporation later registers in Manitoba using the same name.
Risks and Remedies
For example, if a corporation has operated in Manitoba for one year without registration, after applying the 30-day grace period, it may face penalties of approximately $16,750.
To eliminate or mitigate these risks, a corporation may want to consider one of the following options:
1. Extra-Provincial Registration
This option involves preparing and filing the required extra-provincial registration documents with the Manitoba Companies Office while the corporation remains incorporated in its original jurisdiction.
Extra-provincial registration is generally appropriate for corporations that conduct business in Manitoba and other provinces.
2. Continuance to Manitoba
Continuance is a legal process that allows a corporation to move its jurisdiction of incorporation to Manitoba without reincorporating or registering extra-provincially. The corporation retains its existing corporate identity, assets, liabilities, rights, and obligations, but ceases to be a corporation in its incorporating jurisdiction and becomes a Manitoba corporation.
Continuance may be the preferred option where the corporation conducts business solely in Manitoba and no longer operates in its original jurisdiction.
Obtain Tailored Legal Advice
Because each corporation’s circumstances are unique, obtaining legal advice is strongly recommended to ensure compliance with the Act and to determine the most appropriate option for your business.
How We Can Help
With the support of our multidisciplinary team, we provide practical, customized solutions to help your business achieve its goals. We advise on the full range of corporate matters, such as contracts, taxation, intellectual property, regulatory compliance, and governance matters.
If you are interested in discussing your options or devising future plans, please contact a member of Fillmore Riley LLP’s Business Law practice. We would be pleased to assist you.
