regulation does not apply to them. The Canadian Immigration Service advises that merchants, manufacturers, and their commercial travelers entering Canada temporarily, for the purpose of making purchases or soliciting orders, come within the nonimmigrant commercial-traveler class and, further, that this includes such representatives of manufacturers abroad as are accustomed to make annual or periodical sales trips to Canada, calling on their customers, whether wholesale or retail merchants. The term "commercial traveler" is held not to include house-to-house or store-to-store canvassers, salesmen, or peddlers.

CONTRACT LABOR

While the Canadian Contract Labor regulation (Order-in-Council P. C. 1413 of August 7, 1929) does not apply to nonimmigrants, it does apply to all classes of labor entering Canada, whether for temporary or permanent employment, under contract or agreement express or implied to perform labor or service of any kind in Canada. An American firm desiring to send supervisory personnel or technical employees to Canada, whether for temporary or permanent employment, should secure permission in advance from the Canadian immigration authorities. Application may be made to the District Superintendent of Immigration at Vancouver, British Columbia, at Winnipeg, Manitoba, or at Ottawa, Ontario. The Canadian authorities usually allow temporary entry where any urgency exists but require firms to establish that qualified labor is not available in Canada, before any lengthy or permanent stay is approved.

CANADIAN COMPANY LAW

INTRODUCTION

Three methods are available for an American corporation intending to conduct its own business operations within Canada: (1) Registration as an extra-Provincial company in a Canadian Province; (2) formation of a Provincial company as a subsidiary; and (3) formation of a Dominion company as a subsidiary.

EXTRA-PROVINCIAL COMPANIES

Registration as an extra-Provincial company is generally required to do business in the Canadian Provinces where a foreign company establishes an office, shop, warehouse, or branch factory in Canada. A foreign corporation is required to take out a license and pay a fee in each Province in which it carries on business through a branch establishment of any kind. Whether or not it is advisable to obtain a license in a Canadian Province to do business as a extra-Provincial company will depend upon the nature and extent of the anticipated business. In cases where the company's business activities can be conducted through a small sales office in one Province without the necessity of opening an office or establishment in other Provinces, registration as an extra-Provincial company may be a suitable method of operation. However, inasmuch as taking out a Provincial license involves practically as much expense as incorporation of a Canadian company, many American firms have preferred to incorporate in Canada and thus gain the psychological advantages which are to be obtained by operating as a Canadian company. Another reason for forming a local corporation is that Canadian profits are more easily segregated and the determination of liability to the Canadian and United States income taxes is greatly facilitated. There is no Dominion statute under which a foreign company can obtain a license authorizing it to carry on business throughout Canada.

PROVINCIAL COMPANIES

A company which is incorporated under the laws of any one Province must take out a license to do business in each of the other Provinces in which it contemplates carrying on business, just as American corporations are subject to the license requirements in the several States. There are, however, some exceptions to this rule. The Extra-Provincial Companies Act of Quebec provides that its license requirements shall not apply to companies incorporated under an act of a legislature of another Province of Canada in which companies incorporated under the laws of the Province of Quebec are authorized to do business without being obliged to take out a license therefor. An Ontario Order in Council of February 15, 1930, provided

8

that in the future companies incorporated in the Province of Quebec could carry on operations in Ontario without securing a license. Companies incorporated in Ontario are therefore automatically entitled to carry on business in Quebec without the necessity of obtaining a license. This reciprocal treatment of Quebec and Ontario companies is an important consideration, particularly in view of the fact that they are the most populous Provinces of Canada, but it should be noted that the provision would not apply to an American company licensed to do business in either Quebec or Ontario.

STATUS OF DOMINION COMPANIES

In cases where the carrying on of business throughout Canada or in several Provinces is contemplated, it would be more advantageous to incorporate a company under the Dominion Act, as the expenses and formalities will be less than under the other methods. A Dominion company has the capacity and the status to carry on business in all parts of Canada, and therefore Provincial legislation excluding Dominion companies because of failure to register or obtain a license from resorting to Provincial courts to enforce contracts made in pursuance of the powers granted by their charter is ultra vires."

In the case of the Great Western Saddlery Co., Ltd., v. The King,10 involving consolidated appeals testing the validity of the statutes of Ontario, Saskatchewan, and Manitoba which required Dominion companies to obtain a license as a condition of carrying on business in these Provinces, the Judicial Committee of the Privy Council held that these statutes were ultra vires insofar as they required Dominion companies to become licensed before carrying on business and exercising their powers within these Provinces. The 'Privy Council, in that and other cases, stated, however, that Dominion companies might be subject to Provincial laws of general application such as laws relating to taxation," to mortmain 12 (right to acquire and hold land) and civil rights for the regulation of contracts,13 or those requiring registration for certain purposes, such as furnishing information, and to fix penalties for failure to comply with the requirements so long as they do not "sterilize, or effect destruction of, the capacities and powers which the Dominion has validly conferred." The company laws of several of the Provinces require Dominion companies to register and pay license fees when doing business within the Province, but they provide also that nonregistration shall not affect their power to carry on business or to maintain court actions in the Province.

INCORPORATION UNDER PROVINCIAL LAWS

Provincial Companies Acts require the following number of signatures to the petition or memorandum of the association for the

* Laws Concerning Companies (Quebec), W. Amyot, p. 190.

John Deere Plow Company, Ltd., v. Wharton (1915) A. C. 330.

10 Great Western Saddlery Co., Ltd., v. The King (1921) 2 A. C. 91.

11 Bank of Toronto v. Lambe (1887) 12 A. C. 575.

12 Colonial Building and Investment Association v. Atty. General of Quebec (1883-4) 9 A. C. 157.

13 Citizens Insurance Co. v. Parsons (1881) 7 A. C. 96.

incorporation of a Provincial company: Not less than five in British Columbia, Manitoba, New Brunswick, Ontario, and Prince Edward Island; not less than three in Alberta, Nova Scotia, and Quebec; and in Saskatchewan two subscribers in the memorandum of association for a private company and three for a public company. The various forms used in applications for incorporation may be obtained from the Provincial Secretaries of State of the several Provinces.

The number of directors required under the Provincial acts are as follows: In British Columbia the number is fixed by the memorandum of association, of whom one must be a resident of Canada; in Ontario, New Brunswick, Quebec, and Prince Edward Island not less than three with no maximum number; in Saskatchewan not less than two, of whom one must be a resident of the Province; and in Alberta and Manitoba not less than three nor more than nine.

INCORPORATION FEES OF PROVINCES

The incorporation fees of the several Provinces are as follows:

ALBERTA

For the registration of a company whose nominal capital does not exceed $20,000, $50; and the following additional fees where the nominal capital exceeds $20,000: For every $5,000 or part thereof, from $20,000 up to $100,000, $5; for every $10,000 or part thereof, after the first $100,000 up to $500,000, $3; and for every $100,000 or part thereof thereafter, $10.

BRITISH COLUMBIA

When the authorized capital does not exceed $25,000, $25; and the following additional fees: For every $5,000 or part thereof, between $10,000 and $25,000, $5; between $25,000 and $500,000, $2.50; over $500,000, $1.25.

MANITOBA

Company with capital not exceeding $20,000, $25; and the following additional fees: For each $10,000 or part thereof up to $100,000, $10; for each $25,000 or part thereof up to $150,000, $15; for each $50,000 or part thereof up to $300,000, $20; and for each $100,000 thereafter, $20.

NEW BRUNSWICK

When the capital stock does not exceed $5,000, $50; over $5,000 but not exceeding $10,000, $60; then $10 for each additional $10,000 up to $100,000, when the fee of $150 is reached; from $100,000 to $125,000, $160; from $125,000 to $150,000, $170; then $20 additional for each $25,000 up to $250,000 (or $250); from $250,000 to $300,000, $270; between $300,000 and $400,000, $300; then $50 additional for each $100,000 up to $1,000,000, when the fee of $600 is reached; and thereafter $60 for each $100,000 or part thereof. Annual filing fee for both Provincial and extra-Provincial companies based on capital invested or used in the Province ranging from $5 on a capital of $5,000 to $70 on capital between $200,000 and $350,000. When the capital exceeds $350,000, the fee is $0.20 for every $1,000, with a maximum of $250.

NOVA SCOTIA

For registration of a company whose nominal share capital does not exceed $5,000, $50; between $5,000 and $10,000, $75; thereafter for each $1,000 or part thereof up to $50,000, $1; from $50,000 to $100,000, $0.75; from $100,000 to $250,000, $0.50; from $250,000 to $1,000,000, $0.25, and above $9,000,000, $0.15. (See annual registration fees and tax on paid-up capital under Nova ScotiaCorporation Taxes.)

ONTARIO

Where the capital is $40,000 or less, the fee is $100 between $40,000 and $100,000, $100 and $1 for every $1,000 or part thereof in excess of $40,000. Between $100,000 and $1,000,000, $160; and $2.50 for every $10,000 or part thereof in excess of $100,000. When the capital is over $1,000,000, the fee is $385, and $2.50 for every $10,000 or part thereof over $1,000,000. A fee of from $2 to $10, based on capital, must be paid when the required annual statement is filed.

PRINCE EDWARD ISLAND

When authorized capital is $10,000 or less, $20; between $10,000 and $20,000, $25, and $5 for every additional $10,000 or fraction up to $100,000; between $100,000 and $125,000, $70; and $10 for every additional $25,000 or fraction up to $350,000; between $350,000 and $375,000, $165; and $5 for every additional $25,000 up to $700,000.

QUEBEC

When the capital is $20,000 or less, $40; over $20,000 but under $50,000, $75; over $50,000 but under $100,000, $100; over $100,000 but under $150,000, $150; over $150,000 but under $200,000, $200; over $200,000 but under $300,000, $250; over $300,000 but under $400,000, $300; over $400,000 but under $500,000, $350; over $500,000 but under $600,000, $375; over $600,000 but under $700,000, $400; over $700,000 but under $800,000, $425; over $800,000 but under $900,000, $450; over $900,000 but under $1,000,000, $475; on $1,000,000, $500; on every $1,000,000 of additional capital or fraction thereof, $100.

SASKATCHEWAN

When the nominal capital does not exceed $20,000, $40; thereafter for every $5,000 or part thereof up to $100,000, $5 additional; for every $10,000 or part thereof between $100,000 and $500,000, $3 additional; and thereafter for every $100,000 or part thereof, $20 additional.

REGISTRATION OF EXTRA-PROVINCIAL COMPANIES

DEFINITIONS OF "CARRYING ON BUSINESS"

The Ontario Extra-Provincial Corporations Act provides that no extra-Provincial corporation shall carry on, within Ontario, any of its business unless and until a license so to do has been granted to it, and unless such license is in force; and no company, firm, broker, agent, or other person shall, as representative or agent of, or acting in any other capacity for, any such corporation, carry on any of its business in Ontario unless and until such corporation has received such license and unless such license is in force.

It is, however, further provided that taking orders for, or buying or selling goods, wares, and merchandise by travelers or by correspondence, if the corporation has no resident agent or representative or no office or place of business in Ontario, shall not be deemed a carrying on of business within the meaning of the act. The onus of proving that a corporation is not doing business in the Province rests upon the accused (secs. 6 and 7).

Similar provisions as to what constitutes carrying on business are found in the statutes of the majority of the Provinces. For example, the Quebec Extra-Provincial Companies' Act provides in section 3 that no extra-Provincial corporation shall carry on business in the Province, unless a license under this act has been granted to it, and unless such license is in force, and that no company, firm, broker, agent, or other person shall, as the representative or agent of, or