Corporation Identity is a Must in the Small Claims Court

What is a corporation?

Corporations are interesting legal entities. In the eyes of the law, they are persons. Accordingly, corporations have the rights that they can pursue in the courts via a representative. As with individuals, to pursue its interests in a court of law, the corporation must, in fact, exist.
In a corporation’s case, “existence” means registration with relevant authorities as a provincial or federal corporation.
Being sued by a non-existent corporation is like being sued by a person who never lived. This makes the issue of whether a corporation legally exists very important to any small claim or defence.

If a corporate plaintiff does not exist

If you find out that a corporation has no registration anywhere in Canada, “the plaintiff does not exist” will make for an excellent defence to any claim. In fact, this is the first defence you should consider.
We recommend running an official check of whether a corporation exists, no matter how sure you may otherwise be of its legal status.
For example, we had a case in our practice where a small claim defendant signed a contract with the corporate plaintiff. That corporate plaintiff then sued the defendant. It maintained its existence throughout the trial. The corporate plaintiff hired paralegals and a lawyer who said they represented it. After all that, the defendant checked whether the corporation was legally registered. It turned out that it never existed. Therefore, the corporation could not have sued the defendant, hired a representative or issued any other court proceedings. It could not even accept payment on a judgment in its favour.

If a corporate defendant does not exist

If you are on the other side and are suing a corporation, it’s equally important for you to check whether the corporation exists.
Again, fairly common sense – a judgment against a person that does not exist is useless. You would not be able to collect any money from a non-existent entity. Attempting to rename the defendant after the judgment is a cumbersome and potentially unsuccessful process.

How to check a corporation exists.

It’s important to note here that any plaintiff or defendant must check that the corporation exists.
So, now that we’ve established that checking the corporation’s existence is important; let’s turn to the mechanics of this check. A corporation can be provincial or federal. It means that is; it can be a company operating in a province or all of Canada.
To show that a corporation does not exist, you must check both the provincial and federal databases.

How to check an Ontario provincial corporation

Provincially, this registration can be checked by running a search using the corporation’s name with the Ministry of Government Services. As well, anyone can search it in person on the second floor at 375 University Avenue in Toronto(click here for more information from the Ministry).
If the corporation exists or has existed, the Ministry will provide a Corporate Profile Report. This is an official document that confirms the corporation’s existence, lists its name, directors, shareholders and officers and their contact details, and other useful information. If the corporation has never existed, you can obtain a Certificate of No Record, which confirms this fact.

How to check a federal corporation

If a corporation does not exist provincially, it may be federal.
A search for a federal corporation is free. Anyone can run it using its name online here.
The search will provide you with an informative search result similar to the corporate profile report if the corporation exists and a “0 results” page if the corporation does not exist.

You can also avoid the hassles of running the searches yourself by hiring a business service provider who can run the search for you. A list of several providers can be found on the ServiceOntario website, though this list is not exhaustive.

To summarize, the moral of this particular story is that corporate identity checks are not expensive or difficult to run. For this reason, we strongly suggest you do your homework to avoid the risk of getting into lengthy litigation with an entity that may not even exist.