Continuance (corporate)

Corporations Canada says a continuance (import) allows an incorporated business to effectively re-incorporate under another legislation. Because the business is already incorporated, the legal process is called a continuance. A buyer meets the term when a target changed the law that governs it in the past, or plans to before closing.

Coming in and going out under the CBCA

• Import: a body corporate incorporated otherwise than under an Act of Parliament may apply for a certificate of continuance if the laws of its home jurisdiction authorize it (s. 187), unless s. 268(10) bars it, as it does a body corporate to which the Canada Not-for-profit Corporations Act applies. On the date shown, its articles of continuance are deemed to be its articles of incorporation.
• Export: subject to s. 188(10), a federal corporation may ask the other jurisdiction to continue it if its shareholders authorize the application and it satisfies the Director that the move will not adversely affect creditors or shareholders (s. 188(1)). Approval is by special resolution (s. 188(5)), and a dissenting shareholder may be entitled to fair value (s. 190).
• Ontario’s Business Corporations Act deals with continuance into Ontario in s. 180. This entry covers the CBCA and Ontario only; for another province, read the statute where the company is incorporated.

What to ask

Ask for the articles and certificate of continuance, and which statute now governs the company. For the starting choice of statute, see federal vs provincial incorporation. For a foreign entity, see buying assets without a local entity.