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natural person to own property and therights to carry on business.There are several advantages to using acorporate form of business organization asopposed to other available forms such assole proprietorships and partnerships:An incorporated company offersinvestors access to a wide range offinancing opportunities. The flexibilitythat exists with respect to acompany’s share structure undereither provincial or federalcorporations legislation providesinvestors with a number ofinvestment options: shares can bevoting or non-voting; can havelimited or unlimited participation inequity; and can be redeemable for afixed price at the option of thecompany or the holder. The effect ofthis flexibility is that various classesof shares and debt instruments maybe utilized to provide different levelsof shareholder and lenderparticipation in the capitalization ofthe company and to provide varyingdegrees of risk or opportunity forprofit.Generally speaking, the liability of ashareholder is limited to the amountof that shareholder’s contribution tothe company, although the NovaScotia Companies Act provides forthe incorporation of unlimited liabilitycompanies (discussed furtherbelow).The control of a company can easilybe transferred through a transfer ofshares.Federal or Provincial IncorporationEach province has its own companieslegislation, being the Business CorporationsAct (“NBBCA”) in New Brunswick, theCompanies Act (“PEICA”) in Prince EdwardIsland, the Companies Act (“NSCA”) inNova Scotia, and the Corporations Act(“NLCA”) in Newfoundland and Labrador.The federal companies legislation is theCanada Business Corporations Act(“CBCA”). Companies (referred to as“corporations” under the NBBCA and NLCA)may be incorporated either under one of theprovincial companies statutes or under thefederal CBCA. Currently there is littlepractical difference between the provincialand federal powers to incorporate abusiness. A company established under aprovincial companies statute is entitled tocarry on business in that province andgenerally will be required to register in allother jurisdictions in Canada in which itcarries on business. A companyincorporated under federal legislation isentitled to carry on business anywhere inCanada, but it may also be required to beregistered in any province in which it carrieson business.There are certain practical factors that mayaffect the decision on where to incorporate.One important factor is the requirement forat least 25% of the company’s directors tobe Canadian residents for incorporationunder the CBCA or the NLCA. To qualify asa resident, a person must be either aCanadian citizen or a permanent residentunder the federal Immigration and RefugeeProtection Act. Subject to some limitedexceptions, a person must already be livingin Canada in order to be considered to haveresident status. It is possible to avoid theseForms of Business Organizations 13