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Company Registration in Canada
COMPANY
REGISTRATION
IN CANADA
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Canada is a vast country, North of North America. It
borders the North Atlantic Ocean on the east, North
Pacific Ocean on the west, and the Arctic Ocean on
the north. Economically and technologically, the
nation has developed in parallel with the United
States, its neighbour to the south. As an affluent,
high-tech industrial society in the trillion-dollar
class, Canada resembles the United States in its
market-oriented economic system, pattern of
production, and affluent living standards. The
country’s petroleum sector is rapidly becoming an
even larger economic driver with Alberta’s oil sands
significantly boosting Canada’s proven oil reserves.
Licensehub.in can assist you in setting up a
company in Canada.
Canada offers excellent opportunities to Investors
from around the globe to set up branch offices,
subsidiaries or start-up of Small Medium Enterprise
Companies in Canada. With a combination of cultural
diversity, inclusiveness, and government support,
you can be assured that your business will succeed
in Canada regardless of your respective industry.
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and French.
There are two types of incorporation in Canada;
provincial and federal incorporation.
PROVINCIAL INCORPORATION – what are the main
features?
• When you incorporate your business in a
particular province or territory, you are only
entitled to operate your business in that
jurisdiction and have no name protection
outside that province or territory
• If you plan to be operating primarily within one
province, provincial incorporation may be
sufficient
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FEDERAL INCORPORATION
• Federal incorporation gives your business increased business
name protection and wider rights to carry on business
• Federal incorporation of your business means that you will be
able to do business all across Canada under the same business
name, even if some other company is already using a similar
name in some province or territory
• If you choose federal incorporation, you will need to register
your business in any province or territory where you carry on
business
• Federal incorporation will involve more paperwork every year,
as you will need to comply with the corporate filings required
by the federal Director of Corporations Branch and all filings
required by the provinces that your corporation is registered in
• Federal incorporation may cost more
• Federal incorporation can be an excellent choice if your
business needs the nation-wide business name protection that
federal incorporation provides, or if your business is or will be
operating internationally
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FEDERAL VS. PROVINCIAL
The primary difference between the two methods are in the:
• Protection of company name rights
• Ability to conduct business in all provinces
• The overall cost to initiate and renew incorporation
A Federal incorporation provides wider rights to the business owner. It also offers better
protection of your business name. This comes into play if you discover that a business is
operating under the same registered name. Your ability to take corrective action varies. It
generally depends on how your business is registered and legally structured. Federal
incorporation gives you the right to use your business name across all of Canada. It protects
you even if there is another business in a different province using the same name. If you
register your business only in a single province, you are only protected in that location. If a
business is using your name in another province, you won’t be able to register there.
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BASIS OF FDERAL INCORPORATION PROVINCIAL INCORPORATION
DIFFERENCE
Business Name To file for a Federal With a Provincial Incorporation, many
Requirements incorporation, your business provinces will accept a business name as
name must be significantly long as there are no exact matches.
distinct and will need to be
reviewed by Corporations
Canada for approval.
Annual Filing Depending on the province you Federal registration is usually less
Requirements are registered in, you may only expensive at the outset, the annual costs
have to file paperwork in certain outweigh these savings in the long run.
circumstances.
Simplicity A Federal incorporation offers Professionals, particularly bankers,
greater protections, but this is attorneys, and accountants may be more
offset by increased familiar with provincial corporations.
requirements. Extra costs may
be associated with each of the
filings, such as the annual
filings.
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The Advantage of Federal Incorporation
The main difference between federal and provincial
incorporation is that federal incorporation gives your business
increased business name protection and wider rights to carry
on business throughout the entire country.
Federal incorporation of your business means that you will be
able to do business all across Canada under the same
business name, even if some other company is already using a
similar name in some province or territory.
This is not the case with provincial incorporation. When you
incorporate your business in a particular province or territory,
you are only entitled to operate your business in that
jurisdiction and have no name protection outside that province
or territory.
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DISADVANTAGES of Federal
Incorporation
When you read the above information about the
difference between provincial and federal
incorporation, you may wonder why everyone who
wants to incorporate in Canada doesn't just incorporate
federally. That may be because the downside to federal
incorporation is it takes extra work and money.
Although provincial and federal incorporation is an
"either-or" proposition, if you choose federal
incorporation, you will need to register your business in
any province or territory where you carry on business.
Federal incorporation will involve more paperwork
every year, as you will need to comply with the
corporate filings required by the federal Director of
Corporations Branch and all filings required by the
provinces that your corporation is registered in.
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TYPES OF COMPANY IN CANADA
In Canada, there are four basic business structure to do business/trade. The person willing to do
business here in country has to choose the good Business Structure as per their requirements to be
registered in Canada for operation.
SOLE PROPRIETORSHIP
It is very easy and inexpensive to register. The regulatory burden is very light and person do have
direct control and decision making. In this type of business structure, creditor can make a claim
against the individual assets as well as business assets in order to satisfy any debts.
PARTNERSHIP
It is non-incorporated business that is created between two or more people. In a general
partnership, each partner is jointly liable for the debts of the partnership but in a limited
partnership, a person can contribute to the business without being involved in its operations.This
type of business form is fairly easy and inexpensive to form. Partnership Deed is major document to
be prepared and kept safe to avoid any future dispute in business/trade.
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CORPORATION
It can be incorporated at the federal or provincial/territorial level. It is incorporated with
legal recognition having a capability of ownership to be transferable. It is separate from
its shareholder as far as separate legal entity is concern. As a shareholder of corporation,
shareholder will not be personally liable for debts, obligation or acts of the corporation. It
is preferred form of business as it is of limited liability, continuous existence and easier to
raise capital than it might be with other business structure.
COOPERATIVE
It is owned and controlled by an Association of members (AOM). It can be set up as a
profit or as a not for profit organization. It is good to established as it is most democratic
form of Business due to Democratic Control (like One Member One Vote). It has limited
liability with the ownership and controlling by its members.
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STEPS TO CONSIDER BEFORE PLANNING BUSINESS
A. Planning a business
Person required to plan the form and
manner of operation of entity as a whole
business plan, is most before move to
any required steps/procedure to
incorporate the business.
B. Choosing Business Name
Next job to person who is planning to do
business in Canada, required to choose
proper name of Business and need to
follow consistently with all the
communication and business operation.
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C. Registering your business with the
government
The next important matter for business structure is to
register it with concern department for commencement
of job.
D. Applying for permits and licenses
Irrespective of form/ structure of business, entity is
required to obtain the permit and licenses as required
by regulatory framework of Canada.
E. Getting business support and financing
Last but not the least, as a universal truth of business it
is the step to be followed at any cost i.e. business
support and financing for the same.
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COMPANY FORMATION
PROCESS IN CANADA
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Step 1: Naming of Business
It must be such unique and easy to remember,
and should describe the products and services
the business provide.
Step 2: Business Number
Register person required to obtain Business
Number to identify your business to federal,
provincial and municipal governments. This
Business number will be used for dealing with
the government regarding GST/Harmonized
Sales Tax (HST), payroll, import/export and other
activities.
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Step 3: Incorporation
It can be done federally or provincially. Both means either paper mode or online are available for
incorporation.
Name Search: The name once approved will last for maximum 90 days and it will expire. Meaning
thereby person registering corporation required to full fill other credentials within 90 days of Name
Search.
Article of Incorporation: It need to be signed by the incorporator(s). If incorporator is a company then
article must be signed by an individual authorized by that body. Person can file Article of Incorporation
through Online Filing Centre or Complete Form 1 where person need to state proposed name,
province or territory in Canada, share structure and restriction on share transfer, number of directors
etc.
Language of Articles: It can be either French or English or both.
Provide initial registered office address which can be used for further communication and first board
of Directors. Filing the appropriate form and paying the fee as per Canada Business Corporation Act.
Filing Incorporation documents cost 200USD or 250USD for online and paper mode as the case may
be respectively.
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Step 4: Processing of Application
After all the above steps, the Corporations Canada will analyses and make sure Article of
Incorporation have been properly and appropriately completed and that the proposed name is
acceptable. Applications will be complete if it includes all necessary documents, forms are complete
and signed and fees is included.
Step 5: Provincial and territorial registration
Registration is different from incorporation. If you run business, have an address or offer product or
services other than incorporated address, required to take registration within a week after
incorporation in each province to have permission of doing business/trade.
Step 6: Obtain Business Number or permits and other requirements
As per the Canada Revenue Agency (CRA), any person doing or running business either in province or
federal required Business Number for GST/Harmonized Sales Tax (HST), Payroll deductions, corporate
income tax, import and export duties and taxes. Some of Municipality also required permits to
operate business on that locality like license of alcohol for restaurant services etc.
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THANK YOU
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