Company Registration in Canada

Company Registration in Canada

Canada has a well-developed economy courtesy of a friendly and open market which has allowed entrepreneurs from all around the world to tap into the ever-growing business opportunity. Now you can also benefit from it by setting up a company in Canada. Connect with Enterslice today to register your business.

Package inclusions:
  • Name reservation
  • Assistance in opening a Canadian bank account for your company
  • Registering with tax authorities and afterwards obtaining a GST/VAT from the revenue department
  • Drafting of required documents
  • Preparation of forms to be filed
  • Online Filing of company incorporation application
  • Liaising with the concerned department
  • End to End Assistance
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. The wealth of resources in Canada makes it simple for any investor or entrepreneur to start a business. Any person across the globe can incorporate and start a company 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 also well placed in the ease of doing business index in the world. You can choose from different types of business structure depending on your business activity.

Benefits of Company Registration in Canada

The following are the benefits of company registration in Canada:

  • Straightforward Incorporation Procedure

When compared to other countries, the Company Registration process is quite straightforward here. 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 appropriate type of business structure before carrying out operations in Canada. The following are the types of business structures utilised in Canada:

  • Sole Proprietorship

This form of business structure can be easily registered. 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 concerned. 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 are thirteen provinces or territories in Canada. Hence the local laws of these provinces would be applicable for starting a business in Canada.r
  • 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.

  • Branch Office

This option can be suitable for a foreign company that intends to conduct in Canada the same business activities as abroad. It is considered as a mere extension of the parent company.

Primary requirements for Company Registration in Canada

Before you begin with the company registration process, it is always advisable to consider below steps:-

  1. 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
  1. Choosing Business Name

The applicant should 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.
  • 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.
  1. Federal or Provincial registration

Foreign investors willing to set up companies in Canada can register them at federal level or provincial level. The main difference between the two reside in the possibility of offering services and selling goods in the Canadian territory. So the companies registered at federal level can carry out operations throughout the whole country, whereas companies incorporated at a regional level will be limited to operating only in the province where the business is registered.

  1. Resident Shareholder and Company Secretary

There should be one shareholder and director who must be a Canadian national. However, a foreigner can be a director but only in specific territory or region. Further, appointment of Company Secretary will be required.

  1. Registered Office Address

Every incorporated business must have a registered office address.

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;
  • Registered Office of the Business and Information on first Board of Directors;
  • 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;
  • Federal Business Number and the Income Tax Number for carrying out corporate transactions from the relevant revenue authority of Canada;
  • 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;
  • Registered Office of the Business and Information on first Board of Directors;
  • 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.

Procedure for Company Registration in Canada

The following procedure is adopted for company registration in Canada:

  • Reserve Business Name

Once the name of the company has been decided upon, the next step is to reserve the name with the concerned authorities.

  • Choose the business structure

You need to choose the most appropriate form of business structure from the available options i.e., sole proprietorship, corporation, partnership, branch office etc.

  • Finalise the registration procedure

As stated above, company registration can be done either at a federal or provincial level. Accordingly the application is filed with the department for company registration.

  • Documentation filing

Keep ready the documents required for company registration procedure which needs to be filed with the concerned department.

  • Company Incorporation

Once the company registration application is verified and accepted then the certificate of incorporation shall be issued.

  • Obtain Tax Registration and Various licenses

Register for taxation with the tax administration in Canada and the company should obtain various business licenses as per the nature of the business activity.

Frequently Asked Questions

Yes, foreigners can open companies in Canada under the same conditions as locals.

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 of business structures under company registration in Canada- Sole Proprietorship, Partnership, Corporation, Cooperative and Branch Office.

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.

Yes, after the company has been incorporated, a corporate bank account should be opened.

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 and other tax incentives
  • 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.

Related Articles

Related Articles
11 May, 2022
Company Registration

Doing Business in Canada: Advantages and Disadvantages

Most of the foreign investors overlook the prospects of doing business in Canada when they are thinking of entering the North American market. This piece o...

Read More
09 May, 2022
Partnership Firm

Setting up a Partnership in Canada

Many people who do not wish to set up a big business and are satisfied with small business but want to take benefits from each other in terms of capital,.....

Read More
05 Jan, 2021
Company Registration, Global Registration

What are the Advantages of Company Registration in Canada?

Company registration in Canada is one of the preferred locations for entrepreneurs purely because of its advantages. Canada has always been a supporter of...

Read More
15 Sep, 2018
Company Registration, Global Registration

Steps for Company Formation in Canada

Canada is a Country which is located in the northern part of North America. Incorporation in Canada is considered to be easy simple and efficient because o...

Read More

Why Enterslice?

Top 100 Most Innovative Companies in Asia

Top 100 Most Innovative Companies in Asia - Red Herring

Forbes 30 Under 30 in American business

Forbes 30 Under 30 in American business and industry figures Lists.

Services delivered by 300+ Qualified CA and CS

Services delivered by 300+ Qualified CA and CS

Top 100 Most Innovative Companies in Asia - Red Herring

Top 100 Most Innovative Companies in Asia - Red Herring

Trusted Partner