Please refer to our info-graphic below for a summary of the advantages and disadvantages to incorporating federally versus provincially. For more information on the advantages and disadvantages of Provincial Ontario Corporation and a Federal Canada Corporation and for assistance in selecting your type of corporation, Contact Us to speak with one of our business lawyers. The above provides information of a general nature only. This does not constitute legal advice.
All transactions or circumstances vary, and specified legal advice is required to meet your particular needs. If you have a legal question you should consult with a lawyer. Phone Phone. Ensure your business is protected today.
Speak with a business lawyer. Send us a message, but doing so does not mean that we are your lawyers until we have confirmed so in writing. Please do not include any confidential information in your message. Residential Locations of Directors and Shareholders: The location of the directors and shareholders, as well as their ability to travel, is an important consideration when deciding between incorporating under the Ontario Business Corporations Act or the Canadian Business Corporations Act.
Name Selection: When you go to incorporate a company the government must first know if that name has been taken. Turn-Around Time: Because the name selection under the Canada Business Corporations Act is decided by government examiners based on availability across Canada, turn-around time is usually longer than selecting a name under the Ontario Business Corporations Act. Convenience: The advantage of incorporating under the Ontario Business Corporations Act is that it combines both the tax and the annual filing requirement into one form.
Please refer to our info-graphic below for a summary of the advantages and disadvantages to incorporating federally versus provincially click to enlarge F. What are the main advantages of federal incorporation versus provincial incorporation?
Reading time : 5 min. Let me take you back to elementary school for a little geography lesson: Canada is composed of ten provinces and three territories. What does this have to do with entrepreneurship? No idea? Lex Start will explain to you the consequences of this choice. For even more information on provincial incorporation in Quebec, download our free incorporation Ebook now. First of all, incorporation under the regime of the Beautiful Province is less expensive.
Why is that? Federally incorporated companies wishing to do business in Quebec must in all cases register with the Quebec Enterprise Register. These companies must register in all provinces and territories where they intend to do business.
This means that federally incorporated companies must produce documents for Corporations Canada AND for the Registraire des entreprises, so they will have twice as much paperwork to fill out!
Federal Incorporation When a business is incorporated at a federal level, it receives greater name protection, but also requires stricter name selection.
A NUANS report will search the Canadian database of corporate names to determine if the one you have chosen is distinct from any other registered name in Canada, including names that are only provincially incorporated. Once you receive acceptance from the federal government, the corporate name is protected throughout Canada and all of its provinces and territories.
Incorporating federally also allows your company to conduct business across Canada. There are no restrictions on office location or where your company records need to be kept.
As a federal corporation, you are subject to annual filings with your Director of Corporations branch as well as any additional provincial filings. You will also need to extra-provincially register your corporation for each province that you do business in. The cost of federal incorporation generally runs at a lower rate than provincial incorporation. Ready to incorporate across Canada?
Should I Incorporate Provincially or Federally? If you own a smaller business operating on a local level and have no plans of expanding across provinces, as well as no national customers or suppliers, it may make more sense to incorporate within your province. Oppositely, if your company regularly conducts business with other Canadian or international partners and you have plans for establishments in more than one province, federal incorporation may be the way to go.
There are many advantages and benefits for choosing to run your business as a corporation. If it is the next move for you, you may be thinking about how to incorporate your business in Canada. However, when you look into incorporating your business, you may have read that can do this on either the federal or provincial level. What does this mean? Which is right for you as a business entity in Canada? Although it may seem more tedious to set up, federally incorporating your company has its advantages.
When you do so, you will first notice that you go through a stricter name selection through a NUANs name search and Federal examiner. However, this ensures that your corporate company name is protected across the country, its provinces, and territories. In other words, you can make profits and advertise your business across Canada and benefit from an increase in recognition outside your local jurisdiction.
Yet if at any point your corporation uses any other name, you have to register it under the business Names Act, as well. The CBCA also provides more flexibility in quorum requirements, which is ideal if your founders are located in different cities.
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