Company Registration in Canada

Company Registration in Canada

Canada is a country of opportunity due to the availability of sound technology and resources provided by the Government. The rules and regulation are straightforward. Apart from this supportive environment is also offered in Canada. Company registration in Canada is a seamless and straightforward process.

Package inclusions:
  • 100% foreign ownership
  • End to follow-up with State Authority
  • Company registration certificate
  • • Assistance in Bank Account opening
  • Company PAN and TAN
  • Name Approval Certificate
  • GST Registration
  • PF Registration
  • ESI Registration
  • PT Registration (Maharashtra and Karnataka)
Company Registration in Canada

Company Registration in Canada- An Overview

Canada is the world's tenth largest mixed economy allowing people to establish and carry out business. Company registration in Canada is a straightforward procedure. The resources provided in Canada makes it simple for any investor or entrepreneur to start a business. Any person across the global can incorporate and start business a business in Canada. The government offers different forms of incentives to entrepreneurs to operate in Canada. Apart from this, many investors migrate to Canada as the opportunity provided makes it easier for company registration in Canada. It is a leading country and categorised as one of the prominent G7 nations. Apart from this, it is ranked for ease of doing business in the world.

Benefits of Company Registration in Canada

The following are the benefits of company registration in Canada:

Benefits of Company Registration in Canada
  • Straightforward Incorporation Procedure

    When compared to other countries, the Company Registration process is quite straightforward. Apart from this, incorporating a company in Canada is completely an online process. This makes it simple for an entrepreneur to incorporate a company in Canada.

  • Cost of Incorporation is Low

    The cost of Company Registration in Canada is quite low when compared to other jurisdictions such as the USA, Australia and the UK. Even the annual compliance cost for running the company is quite low.

  • Global Infrastructure

    Amongst the G7 economies, Canada has been ranked for ease of doing business. Hence incorporating or starting a business in Canada is quite simple. Apart from this, the Canadian government offers different form of allied scheme incentives for companies to invest in Canada. It is quite stable when compared to other countries.

  • Different Industries

    There are different industries that flourish in Canada. This would include the financial services sector, insurance business, legal sector as well as the automobile sectors. All these sectors provide different opportunities for businesses to grow. There is continuous government support also offered to these industries.

  • Corporate Tax Advantages

    Tax rates in Canada are comparatively less when compared to other jurisdictions. The applicable federal tax rate stands at 15%. However, if the Canadian business is controlled by Canadian shareholders, then they can avail small business deductions (SBD). When taking all deductions and benefits then amount of tax paid by the Canadian Controlled company would be 11%.

  • Beneficial Corporate Legislation

    The status of the company or a corporation is different from its shareholders or members. Hence even if the owners change, the business would exist. The company can also enter into different form of agreements and sue on contracts. Apart from this, property can be purchased by the company. Hence the company has the status of perpetual succession.

  • Talent

    There is a multitude of talent available in Canada. Immigration policies and sponsorships are attracting different individuals to apply to Canada. Through this a diverse talent pool is offered in Canada.

  • Less Corruption

    All investments carried out by investors would have some form of protection, as law and legislation would support foreign investment and investors.

Types of Business Structures in Canada- Company Registration in Canada

In Canada, there are four basic business structures to carry out some form of trade or profession. Hence it is crucial for the individual to select the type of business structure before carrying out operations in Canada. The following are the types of business structures utilised in Canada:

Types of Business Structures in Canada
  • Sole Proprietorship

    It is very easy and not costly to register. The regulatory burden is very light and person does have direct control and decision making. In this type of business structure, creditors can make a claim against the individual assets as well as business assets in order to satisfy any debts. Usually this form of business structure is utilised in the process of company registration in Canada. Only drawback of having this form of business structure is the amount of liability is more for the individual.

  • Partnership

    Partnership can be understood as an association of individuals with a common purpose of sharing profits. The individuals involved in a partnership would be two or more. 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. It would be beneficial to consider forming the business of a limited liability partnership.

  • 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 shareholders as far as separate legal entity is concern. The shareholder of the corporation 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. Some of the corporations are governed by the Ontario Securities Act.

    There are two types of corporations which can be carried out under company registration in Canada:

    • Federal Incorporation

    • Provincial Territorial Incorporation

    • Federal Incorporation- When going for company registration in Canada, this form of corporation can be utilised. When starting a federal corporation under company registration in Canada, the laws of Canada would be applicable to the company.

    • Provincial Territorial Incorporation- There is thirteen provinces or territories in Canada. Hence the local laws of these provinces would be applicable for starting a business in Canada.

  • 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 establish this form of organisation 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 control by its members. The provisions related to the Canada Cooperatives Act (Coop Act) would be applicable to all forms of cooperatives incorporated in Canada. When forming a cooperative, it is important to mention the requirements of the cooperative in the Memorandum of Association.

Primary requirements for Company Registration in Canada

Before finalization of any form of Business Structure, it is always advisable to go through of below steps:-

a. Planning a business

The applicant is required to carry out conclusive planning related to the business before setting up the business. The following are the steps required to be carried out in the planning phase for company registration in Canada:

  • Develop Business Ideas
  • Find the Location for carrying out the business
  • Select the suitable business structure

b. Choosing Business Name

In the next step for Company Registration in Canada the applicant is required to choose the name of the business. This is something similar to reserving the name of the business. There are several guidelines which have to be adhered by the applicant while choosing the name of the business. Some of the guidelines would be choosing a unique name which is not similar to any other name.

The following are the rules related to choosing the name for Company Registration in Canada:

  • The name of the company must not confuse the general public and other customers.
  • Name which is chosen by the company must be easy to pronounce and remember.
  • Apart from this the applicant has to ensure that the name is not taken by any other company. If this happens, it would result in legal issues related to trademark infringement. In order to avoid such situations, the name of the company must be reserved.
  • Names can be checked in the following website https://www.canada.ca/en/services/business/start/choosing-a-business-name-2.html
  • However, checking names which are utilised by companies would be the Nuans Website https://www.nuans.com/eic/site/075.nsf/eng/home .
  • If the company is registered under a particular province or the territory then the corporate registry search can be carried out to find the name of the company in the province or the registry.

c. Registering your business with the government

In this step the applicant would have to register the business with the government. Based on the type of corporate structure which is utilised by the applicant, there are different businesses which have to be registered. The following considerations have to be taken by the applicant for Company Registration in Canada:

  • Main location of the registered office of the business
  • Locations and Geographical Areas where the applicant would operate
  • Name of the Business

d. Applying for permits and licenses

Irrespective of the form/ structure of business, every entity is required to obtain permits and licenses.  There are different permits which are available in the following website https://services.bizpal-perle.ca/?lang=en&b=01 .

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. There are different programs which are offered by the government of Canada related to regional business support and support for immigrant entrepreneurs.

Procedure for Company Registration in Canada

The following procedure has to be adopted for company registration in Canada:

Procedure for Company Registration in Canada
  • Pre-Incorporation Steps

    First and foremost the applicant would have to go online to the following website, to consider the pros and cons of the particular business (https://www.canada.ca/en/services/business/start.html ). Then the applicant would have to choose the appropriate structure utilised for the business. Out of the above structures, the applicant can choose any form of business structure.

  • Step 1: Naming of Business

    It must be such unique and easy to remember, and should describe the products and services the business provides. Apart from this there are other guidelines to follow for naming the company.

  • Step 2: Business Number

    The registered business is required to obtain Business Registration 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.

  • Step 3: Incorporation

    It can be done federally or provincially. Company Registration in Canada for federal as well as provincial companies can be carried out both through the offline procedure or the online procedure.

    Name Search: The name once approved will last for maximum 90 days and it will expire.

    • Names can be checked in the following website https://www.canada.ca/en/services/business/start/choosing-a-business-name-2.html

    • However, checking names which are utilised by companies would be the Nuans Website https://www.nuans.com/eic/site/075.nsf/eng/home

    Article of Incorporation (Articles of Association)

    Such document is required to be signed by the applicant. If incorporator is a company then articles must be signed by an individual authorized by that body. The applicant can file the Articles of Incorporation through Online Filing Centre or Complete Form 1 where the applicant would have to provide the name of the company, 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.

    Registered Office

    Provide the registered office address which can be used for further communication. Apart from this the applicant has to also provide the list of first board of directors of the company.

    Filing Fee

    The applicant has to file the prescribed fees as per Canada Business Corporation Act. Filing Incorporation documents cost 200 Canadian Dollars or 250 Canadian Dollars for online and paper mode as the case may be respectively.

  • Step 4: Processing of Application

    After all the above steps, the authority (Corporations Canada) will review the documentation. Apart from this the authority will also check the articles of association of the company if the activities have been mentioned correctly. Applications will be complete if it includes all necessary documents, forms are complete, signed and fees are included.

  • Step 5: Provincial and territorial registration

    Registration is different from incorporation. If the business is run or services are provided from different addresses then provincial addresses and territorial addresses must also be mentioned in the application form. This must be intimated to the authority.

  • 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 is required to obtain Business Number for GST/Harmonized Sales Tax (HST), Payroll deductions, corporate income tax, import and export duties and taxes. Some Municipalities also require permits to operate business on that locality like license of alcohol for restaurant services etc.

Documents Required for Company Registration in Canada

The following documents are required for company registration in Canada:

  • Certificate of Incorporation.
  • Memorandum of Association and Articles of Association of the Company.
  • Articles of Incorporation for a Federal Corporation or a Provincial Territory in Canada (Form 3001).
  • Registered Office of the Business and Information on first Board of Directors ( Form 3002)
  • Nuans Name Search Report- This would be provided to show the authority that sufficient steps have been carried out by the company related to the name search and reserving the name.
  • Name has been approved by the corporations Canada then attachment of the approval letter also has to be provided.
  • Federal Business Number and the Income Tax Number for carrying out corporate transactions from the relevant revenue authority of Canada.
  • Registered Office Address of the Business.
  • In case the Shareholders are foreigners then address proof must be provided in Canada
  • Copy of the Passport (Visa).
  • Information on the Paid up capital Required for forming a company.
  • Application filing fee.

Cooperatives

For Cooperatives the following documents are required:

  • Cover letter from the applicant stating all information which is required for filing the application.
  • Information whether the cooperative starting in Canada is for profits or not for profits.
  • A complete signed and PDF version of the Articles of Incorporation of the Cooperative (Form 3001).
  • Registered Office of the Business and Information on first Board of Directors (Form 3002).
  • Nuans Name Search Report- This would be provided to show the authority that sufficient steps have been carried out by the company related to the name search and reserving the name.
  • Name has been approved by the corporations Canada then attachment of the approval letter also has to be provided.
  • Application Filing fee.

How to reach Enterslice for Company Registration in Canada

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Frequently Asked Questions

Company registration in Canada is completely an online process. However, the applicant can also choose the offline mode for filing an application. Depending on the requirements the applicant can file the company registration.

The following are the types business structures under company registration in Canada:

Sole Proprietorship

Partnership

Corporation

Cooperative.

Canada is one of the most competitive G7 nations in the world offering thriving investment opportunities. Apart from this the government supports and provides incentives for different forms of business. This country has one of the world’s most productive labour forces which can be utilised by an investor. As per data of the World Bank, Canada is the third easiest place to carry out business.

There are two types of corporations which can be carried out under company registration in Canada:

  • Federal Incorporation
  • Provincial Territorial Incorporation.

These corporations are governed by federal laws and if the company is formed in a province or territory, then there are different form of territorial laws which would be applicable to them. Hence if the company is formed in Alberta then the rules and laws applicable to Alberta would be applicable to the company. Apart from this the main authority that governs the process of company registration in Canada is the Corporations Canada.

Some of the benefits offered by the Canadian Government for ease of carrying out business would be the following:

  • Ease of Securing Credit
  • Protection of Minority Shareholders
  • Less Corporate Tax Rates
  • Ease of Paying Registration Fee
  • Resolving Disputes.

Some of the ways to reduce tax exposure is to secure the Small Business Deduction percentage of tax which is currently 11%. Previously this percentage was 9%. Apart from this the company can carry forward losses for a period of 20 Years. Shareholders also have the opportunity to defer any personal income tax. This can be carried out by retaining earnings at the company level.

One of the most important steps for company registration in Canada is to choose the appropriate business structure.

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