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The short answer
A federal Canadian corporation can issue shares to a co-founder living in Nigeria; Corporations Canada does not need to be told when someone becomes a shareholder. What the company must do is record the issue in its securities register, and if the co-founder ends up with 25% or more of the votes or value, add them to the register of individuals with significant control within 15 days and file that change with Corporations Canada. If non-residents end up controlling the company, it stops being a CCPC.
Before you issue: check what the articles allow
Start with your articles of incorporation. They set out the classes of shares the company may issue and the rights attached to each. Corporations Canada explains that articles can authorise any number of classes, and that if there is only one class, it must carry voting rights, the right to dividends if declared, and the right to remaining property on dissolution. If you want your co-founder to hold, say, non-voting growth shares, the articles must already provide for that class, or you need articles of amendment first ($200 online federally).
Also check any shareholder agreement already in place. Existing shareholders may have a right to take up new shares before an outsider, or a say over new issues.
Recording the issue properly
Corporations Canada lists the records a CBCA corporation must keep, which include a share register, a securities register and an ISC register, kept at the registered office or another place in Canada the directors choose. For a share issue, the paper trail normally looks like this:
- A written resolution approving the issue: the number and class of shares, the price, and the date.
- Proof of payment: the co-founder's transfer of the subscription money, or a record of the property or past services given in exchange.
- A subscription agreement or letter signed by the co-founder.
- An entry in the securities register with the co-founder's name, address, the shares and the date.
- An updated ISC register if the 25% threshold is met (see below).
Corporations Canada states that you do not have to notify it when a person becomes or ceases to be a shareholder. The ISC filing is the exception that catches people out.
The ISC register and the 15-day rule
An individual with significant control is someone who holds 25% or more of the voting shares or 25% or more of all shares by fair market value, or who has significant influence over the company without holding shares. Corporations Canada says changes must be recorded in the ISC register within 15 days of the company becoming aware of them, and federal corporations must file the change with Corporations Canada within 15 days of recording it. For a co-founder in Nigeria, the register shows their name, date of birth, address, the countries where they are tax resident, the date they became an ISC and how they control the company. Our guide to keeping an ISC register with a shareholder in Nigeria covers the detail.
What it does to your tax position
Under the CRA's definition, a Canadian-controlled private corporation is not controlled, directly or indirectly, by non-residents. If the founders in Canada keep control, the company can remain a CCPC. If the issue gives control to people living outside Canada, or if founders in Canada later move to Nigeria, the company can lose CCPC status and the small business rate. See what a CCPC is and why it lowers your company's tax.
| Co-founder holding (example) | ISC register? | CCPC risk |
|---|---|---|
| 10% voting shares | No, unless they have significant influence another way | Low, if Canadian residents control the rest |
| 30% voting shares | Yes, within 15 days | Depends on who controls the remaining 70% |
| 50% with an agreement giving a casting vote | Yes | High: control may sit outside Canada |
Dividends later paid to a shareholder in Nigeria have their own withholding rules; see Canadian dividends paid to a Nigeria resident.
Pricing the shares and paying for them
Founders often issue shares at a nominal price at incorporation, then struggle when a co-founder joins later. Once the company has customers or investment, a new share issued at the original price may hand value to the newcomer, and it can raise tax questions for both sides. Agree a price that reflects the company at the time and record how you reached it.
Example: a Toronto start-up has 900,000 common shares held by its two Canadian founders. It issues 100,000 new common shares to a Lagos-based engineer for $0.10 each, so the engineer pays $10,000 and holds 10% (100,000 of 1,000,000). If the engineer instead received 300,000 shares, the holding would be 300,000 of 1,200,000, which is 25%, and the ISC rules would apply.
Founders who want shares to be earned over time usually issue them subject to a shareholder agreement with vesting or buy-back terms. Have that agreement drafted before the shares are issued, not after a dispute.
Mistakes that cause trouble later
- Promising equity in a WhatsApp message and never issuing the shares, which leaves the co-founder with a claim and the company with an untidy cap table.
- Issuing shares before the subscription money arrives, with nothing recording what is owed.
- Forgetting the ISC filing because the company assumed no filing was needed.
- Not updating the address of the co-founder when they move between Lagos and Abuja, which leaves the register out of date.
The Nigerian side
Your co-founder is acquiring a foreign shareholding. They should ask a Nigerian adviser how it is treated for Nigerian tax and whether any reporting applies, and keep proof of how the subscription money left Nigeria. Paying through a regulated channel and keeping the receipt protects both sides if a bank or regulator asks later.
Where Pryme fits
A co-founder can hold naira and US dollars in one Pryme account opened from Nigeria and use Swap with the rate and fee shown before approving. Keep a verifiable receipt of the subscription payment, through our partner VerifyDoc.ai, for the company's share records.
Questions people ask
Can a Nigerian resident own shares in a Canadian company?
Yes. Corporations Canada says any person, including an individual or a corporation, can hold shares. Residency affects tax status, for example whether the company is a CCPC, not the right to own shares.
Do I file anything with Corporations Canada when I issue shares?
Not for the issue itself. But if the new shareholder becomes an individual with significant control (25% or more), the ISC change must be filed within 15 days of recording it.
Does my co-founder need to be a director?
No. Shareholders and directors are separate roles. Your articles and any shareholder agreement decide how they relate.
Will adding a Nigerian co-founder change our tax rate?
It can. If non-residents end up controlling the company, it stops being a CCPC under the CRA definition and loses the small business deduction.
Sources
- Corporations Canada: Share structure and shareholders (modified 10 May 2023) · accessed Oct 2026
- Corporations Canada: Corporate records and other corporate obligations (modified 11 Dec 2023) · accessed Oct 2026
- Corporations Canada: Individuals with significant control · accessed Oct 2026
- Corporations Canada: Individuals with significant control, file your information (modified 20 Mar 2026) · accessed Oct 2026
- CRA: Type of corporation (modified 11 Sep 2026) · accessed Oct 2026
- Corporations Canada: Services, fees and processing times (modified 6 May 2025) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.