Canada company registration
Canada company registration is straightforward if you are familiar with the entire process. With Tetra Consultants at the wheel, you will be able to dedicate your time and resources to other more important business channels. With our lean-and-mean mentality, you can rely on our team of experts to provide you a seamless experience throughout the whole process of foreign company registration in Canada. Our ultimate goal is for your Canada company to be operationally ready within the stipulated time frame. Our service package includes everything you will require to set up business in Canada:
- Canada Company registration
- Local company secretary and registered address
- Nominee Canada director services
- Opening a local or international corporate bank account
- License applications (if required)
- Annual accounting and tax services
How long does it take to register a company in Canada?
- Tetra Consultants will register company in Canada within 2 weeks. After receiving due diligence documents of the directors and shareholders, our team will search for the availability of your preferred company name and prepare all required documents for incorporating a Canadian company.
- Throughout the Canada company registration process, you will not be required to travel overseas.
- After Tetra Consultants has registered your Canada company, you can expect to receive the documents of your new company including the certificate of formation, Memorandum and Articles of Association as well as register of directors and shareholders.
- Within 4 weeks upon registering your Canada company, we will open a corporate bank account with either a local or international reputable bank.
- As such, you can expect your company to be fully operational and ready for business within 6 weeks from engaging Tetra Consultants.
- If you are keen to know more about doing business in Canada, Tetra Consultants has prepared a step by step explanation of all steps required.
What is the difference between Provincial and Federal incorporation?
- It is critical to choose the jurisdiction in which your corporation will be incorporated when forming an entity in Canada. You can incorporate either federally or in any of the 13 provincial/territorial jurisdictions. So once you have chosen to advance with Canada company registration and are now debating whether to do it provincially or federally. You probably have a lot of questions, and one of the most prevalent is how to decide between federal and provincial incorporation. Fortunately, Tetra Consultants can assist with both, and our team of business setup experts is experienced to accurately guide you with everything you need to know to make the best choice.
- Provincial incorporation: The process of registering a company with the government of a certain province or territory in Canada is known as provincial incorporation. The corporation will be subject to the laws and regulations of that province or territory, as well as any applicable provincial legislation, such as business registration procedures, tax laws, and corporate governance standards. This means that the corporation can only function in the province or territory where it is registered.
- Federal incorporation: In contrast, federal incorporation is the procedure of registering a corporation with the federal government of Canada. The corporation will be subject to the Canada Business Corporations Act (CBCA) once registered, which is a federal act that governs the incorporation, organization, and administration of corporations in Canada. Unlike a provincial or territorial company, a federally formed corporation can operate and do business within Canada and overseas.
Here are some key points to remember when choosing between provincial and federal incorporation for Canada company registration.:
- Registering a corporation with the government of a specific province or territory in Canada.
- Subject to the laws and regulations of that province or territory.
- Required to comply with any applicable provincial statutes, including business registration requirements, tax laws, and corporate governance rules.
- Limited to operating within the province or territory in which it is registered.
- Typically less complicated than federal incorporation.
- Suitable for businesses that plan to operate only within a specific province or territory
- Subject to the Canada Business Corporations Act (CBCA), a federal statute that sets out the rules for the incorporation, organization, and management of corporations in Canada.
- Has the ability to operate and conduct business across Canada and internationally.
- Must comply with federal laws and regulations, as well as any applicable provincial laws.
- More complicated than provincial incorporation, but may provide greater benefits in terms of business expansion and access to capital.
- Suitable for businesses that plan to operate nationally or internationally.
How do I choose between a Federal and Provincial incorporation?
- Choosing between federal and provincial incorporation depends on various factors, including the type of business, its location, and its growth plans. Here are some factors to consider when making this decision:
- Scope of business: If you plan to operate only within a specific province or territory, then provincial incorporation may be more suitable. However, if you plan to expand your business across Canada or internationally, then federal incorporation may be a better option.
- Regulatory requirements: Different provinces and territories have different regulations and laws governing businesses, including tax laws, business registration requirements, and corporate governance rules. Consider the regulatory requirements in the province or territory where you plan to operate and ensure that you can comply with them.
- Corporate structure: Federal incorporation offers more flexibility in terms of corporate structure and ownership. If you plan to have a complex corporate structure or multiple shareholders, then federal incorporation may be a better option.
- Cost: The cost of incorporation should be the most crucial of the factors that impact your choice of jurisdiction; yet, it is a concern. Companies that are federally incorporated must be incorporated at the federal level before being registered extra-provincially in one or more provinces. As a result, the overall cost of incorporation is generally greater for federal incorporation because both federal and provincial filing costs are required. The sole exclusions are federal corporations with headquarters in Ontario or Prince Edward Island. Because neither Province imposes extra-provincial filing costs for federally established corporations, the cost to incorporate federally is the same as or less than the cost to incorporate provincially. Consider the cost of incorporating and maintaining the corporation, including legal and administrative fees.
- Business Goals: Consider your business goals and growth plans. If you plan to raise capital through public offerings, mergers or acquisitions, or other transactions, then federal incorporation may be a better option as it offers greater flexibility and visibility.
- Ultimately, the decision to choose between federal and provincial incorporation depends on your business needs and objectives. Careful consideration of the above factors with Tetra Consultants’ assistance will help you make an informed decision.
How are Canadian corporations regulated?
- The Canada Business Corporation Act (CBCA) is the governing legislation for the formation and administration of a Canadian Federal Corporation. The corporate governance framework for many small and medium-sized Canadian corporations, as well as many of the biggest organizations operating in Canada, is provided under the Canada Business Corporations Act (CBCA).
- The law outlines precise and open guidelines for the formation of federally incorporated firms, the duties of management, the board, and shareholders, as well as financial accountability. The comprehensive and up-to-date corporate governance rules outlined in the Act ensure that federal companies have the resources necessary to address any new problems that may arise in the capital markets in the near and far future.
Who regulates Corporations in Canada?
- Canadian corporations are regulated by various government bodies at the federal and provincial levels. Here are some of the key regulatory bodies:
- Federal Government: The federal government of Canada regulates corporations that are incorporated under the Canada Business Corporations Act (CBCA). This includes ensuring compliance with the CBCA and other federal laws, such as tax laws and securities laws.
- Provincial Governments: Provincial governments regulate corporations that are incorporated under provincial statutes. Each province has its own corporate legislation, which sets out the rules for incorporating, organizing, and managing corporations. Provincial governments are also responsible for enforcing corporate governance and securities regulations within their jurisdiction.
- Securities Commissions: Securities commissions are regulatory bodies that oversee the securities markets in Canada. They regulate the issuance and trading of securities, including stocks, bonds, and mutual funds. Securities commissions also regulate insider trading and other forms of market manipulation.
- Competition Bureau: The Competition Bureau is an independent law enforcement agency that promotes competition and enforces the Competition Act, which regulates mergers, acquisitions, and other business practices that could harm competition in Canada.
- Industry-Specific Regulators: Certain industries, such as banking, telecommunications, and energy, are regulated by specialized federal or provincial agencies. These regulators oversee industry-specific legislation and ensure that corporations operating in these industries comply with applicable laws and regulations.
- Corporate Governance Regulators: Regulators such as the Canadian Securities Administrators, the Toronto Stock Exchange, and the Canadian Investor Protection Fund oversee corporate governance and investor protection in Canada.
- Overall, Canadian corporations are subject to a complex and evolving regulatory environment. Compliance with applicable laws and regulations is essential for corporations to operate successfully and sustainably in Canada.
How to register a company in Canada?
Step 1: Choosing an optimum business structure
- Prior to company formation, it is essential to choose the correct type of company. Tetra Consultants will advise you on the most optimum business entity to suit your needs. Generally, the most common type of company in Canada is a corporation, which is the equivalent to a limited liability company. Subsequently, Tetra Consultants will recommend either a Federal Incorporation or a Provincial Incorporation, based on the scale of your business and your business goal in the region.
Step 2: Reservation of company name
- Depending on whether you choose Federal Incorporation or Provincial Incorporation, Tetra Consultants will search and register for pre-approval of your company’s name through the Newly Upgraded Automated Name Search report (NUANS name search report) or a provincial name search report. Corporate name pre-approval will be valid for 90 days from the date on the NUANS name search report.
Step 3: Preparation and submission of relevant documents for Canada company registration
- After you have received pre-approval for your company’s name, you are required to prepare the documents required for a foreign director for incorporation of the company. This includes the application form, notarized passport copies and proof of address of individual directors and shareholders. Tetra Consultants will also draft the Articles of Incorporation and other relevant corporate documents, based on your business activity and corporate structure.
- If you are planning to appoint a corporate shareholder, Tetra Consultants will require the Certificate of Incorporation, Memorandum & Articles of Association, minutes of the relevant Board of Directors’ meeting, power of attorney to appoint corporate shareholders’ representative, directors’ personal information and other relevant documents.
- Once received, Tetra Consultants will submit the documents to the Corporations Canada local authority, as well as registering with any authorities at the specific Canadian province or territory that your company will be set up in.
Step 4: Corporate bank account opening
- After your company has been incorporated, you can proceed to open a corporate bank account. Tetra Consultants will assist you in opening a corporate bank account with a reputable Canadian bank.
Step 5: Obtain Business Number and relevant licenses
- Tetra Consultants will next proceed to assist your company in registering for the Business Number. This is needed according to the guidelines of the Canada Revenue Agency, for various purposes such as for tax on export and import duties, tax on Goods and Service or on Harmonized sales, tax on your business’ income, or deducting payrolls.
- In addition, depending on your type of business and municipality in which it is based, you may need permits or licenses to authorize your business. Tetra Consultants will assist your company to apply for the required permits and licenses.
Step 6: Tax Registration
- Upon successful registration of the business number and required licenses, Tetra Consultants will apply for a corporation income tax account with the Canada Revenue Agency. All companies in Canada are subjected to accounting and tax obligations.
- Generally, companies in Canada pay a net tax rate of 15% after tax reductions. Depending on the location of your business, you may be subjected to 2 different corporate tax rates. The lower rate will apply to income eligible for the federal small business deduction while the higher rate will apply to all other sorts of income.
- All corporations in Canada are also required to submit annual financial statements audited by a certified public accountant.
Types of companies in Canada
There are many types of companies in Canada to choose from when you decide to proceed with Canada company registration. When deciding the most suitable entity type, it is important to consider various factors that include but are not limited to the availability of individual liability protection, tax ramifications, ownership and management flexibility as well as compliance requirements. Each type of Canada company will come with its distinctive features. Before the start of the engagement, Tetra Consultants will fully understand your business before recommending the most optimum business entity in Canada. Some considerations we take into account include the type of business activity, tax obligations and nationalities of shareholders and directors. Our consultants will also offer more information on the requirements imposed to set up these entities.
Corporation (Limited Liability Company)
- A separate legal entity, a Canada corporation holds similar legal properties to a limited liability company. It can enter into contracts and own property in its own name, which is to be separated and viewed distinctively from its owners. Most foreign investors choose to set up a corporation when doing business in Canada.
- By registering a corporation, in the event of an unfortunate winding up, you will not be personally liable for the debts and obligations of the company. Unlike Sole Proprietorships as well, you can raise large amount of capital more easily.
- With a Canada-incorporated corporation, you will have to file a T2 corporation income tax return and make tax payments in monthly or quarterly instalments. Corporations are also liable to file for GST or HST return. All Canadian-incorporated corporations must have a registered office address and a board of directors. The registered office will serve to upkeep and maintain corporate records and official documents.
- Under Canadian company requirements, at least 25% of the directors should be resident Canadians. In the case whereby your corporation has less than 4 directors, minimally 1 should be a resident Canadian. Additionally, it is important to note that ownership restrictions may be in place for certain sectors (airlines, telecommunications and film distribution) – as such, requiring a majority of resident Canadian directors.
- There are 2 types of incorporation when registering for a corporation in Canada: Federal Incorporation and Provincial/Territorial Incorporation.
- A Federal Corporation would be administered under the constitution of Canada while a Provincial Corporation would apply the local provincial law based on the province it is registered in.
- A Federal Company registration is beneficial if you wish to carry out business activities throughout Canada or enjoy greater legal protection for your business name. Although the registration cost for a Federal Corporation is usually slightly lower than a Provincial Corporation, the annual fees for a Federal Corporation may be higher due to the stricter filing requirements and the need for extra-provincial licenses.
- Jointly shared between two or more partners, general partners and the business are seen as one and the same by the law. In the case of a winding-up, the general partners can be personally liable for all debts and obligations incurred by the business. There is no minimum capital requirement imposed by the government. Generally, even a verbal agreement can be used to form a partnership.
- When it comes to income tax, the partnership is not recognized as a distinct entity. Therefore, partners are not required to file an income tax return. Instead, each partner can include a share of the partnership income on a personal, corporate or tax return. Nonetheless, registration for GST or HST is still applicable to partnerships.
- With shared characteristics of both a limited liability company and a general partnership, a limited partnership includes both the general and limited partners. General partners are owners entitled to manage the company. As such, general partners also bear unlimited liability for the company’s debts and obligations. Meanwhile, limited partners are not entitled to manage the company. Their liability only extends to the amount of their investment.
- Under Canadian legislation, there is no minimum capital requirement.
- Similarly, when it comes to income tax, partners are not required to file an income tax return. Instead, each partner can include a share of the partnership income on a personal, corporate or tax return. Nonetheless, registration for GST or HST is still applicable for partnerships.
- Under the Canada Cooperatives Act, you can create a co-operative. A legally incorporated corporation created to meet common needs such as widening access to products or services. This joint business should be owned by members who use its products as well as members who do not. Surplus of a co-operative can be further distributed at the AGM.
- Generally, at least 3 persons are required to incorporate a co-operative. At least a quarter of the members should be residents of Canada. In cases whereby there are only 3 members, at least 1 of them should live in Canada. Further, no more than 20% should be elected by investment shareholders or otherwise also known as members who do not use the products.
- The simplest form of business structure, Sole Proprietorship does not include the separation of legal personalities between the owner and the entity. As such, the owner and its entity are seen as one and the same. While this simplifies operations, it can lead to frustrations in the event of a winding-up.
- In the case of a winding-up, the proprietor can be personally liable for all debts and obligations incurred by the business. Any transfer of business is not allowed and hence, there is no continuity. Unlike other business structures, Sole Proprietors are required to report their business income on a T1 income tax and benefit return.
- If you are looking to set up a small business (minimart, art studio, bakery, etc.) yourself or within your family that includes the advantages of an easy startup and complete control, Sole Proprietorship may be the business form for you.
- Generally, most Sole Proprietorship businesses will have to register with the relevant provinces and territories. However, for those who are intending to operate the business under their personal name, you may not have to register. In certain provinces such as Newfoundland and Labrador, registration is exempted for Sole Proprietorships.
Reasons to consider for company registration in Canada
Before you proceed to register a Canada company, it is important to understand the business landscape of the jurisdiction. This is to ensure that your newly established entity will be able to safely and legally conduct business, while striving towards your long-term business goals.
- According to Transparency International’s Corruption Perceptions Index, Canada is ranked 12th among 180 countries in 2019 when it comes to the relative degree of public sector corruption.
- The United States and Canada have strong bilateral relations, leading to the formation of many arrangements between the 2 countries.
- In the recent 2019 elections, Canada’s political leaders failed to take up an approach in resolving climate and housing crises.
- Canada is the world’s tenth largest economy based on GDP. Being the fourth largest oil exporter, Canada is equipped with an advanced energy extraction sector. Canada also has well-developed manufacturing and service sectors and has close trading ties to the US economy due to its geographical location.
- According to the World Bank’s Doing Business Report, Canada is ranked 23rd when it comes to the ease of doing business.
- Canada have various income tax treaties that, if applicable, will relieve some of your economic burden.
- In 2020, it has been reported that the pandemic and oil shock have led to a deep recession with Canada reflecting a contraction of 3.8%.
- According to the Official Languages Act, both English and French have attained official federal status throughout Canada. Specifically, 86.2% of Canadians are well-versed with the English language.
- To eliminate against criminal and terrorist groups, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act has been enacted in June 2000, suggesting Canada’s fight against criminal and terrorist groups.
- According to Statistics Canada, the national poverty rate has dropped to 8.7% in 2018.
- According to Statistics Canada, nearly all Canadians under the age of 45 use the Internet every day. This suggests that the country is home to many digital natives.
- In the 2019 Developer Survey, it was reported that Canada is home to 2.98% of developers, claiming it a title as the “sixth most represented”.
- With a strong tech scene, Canada is also home to a growing list of tech giants such as Google’s Sidewalk Labs, Uber and Microsoft.
- Canadian businesses and organisations are protected under federal or provincial privacy protection legislation. The legislation incorporates a series of stringent rules and penalties that aims to protect and govern the collection, use and disclosure of information.
- The Canada’s taxation laws relies on a self-assessment test by taxpayers. Taxpayers are individually responsible and accountable to the Authority for reporting their total income and thereby, determining the amount of tax payable.
- Generally, businesses pay a corporate tax of 15% of net income after tax reduction. However, if the Canadian business is eligible for Small Business Deductions and managed only by Canadian shareholders (i.e. it is a Canadian Controlled Company), then the net tax rate would be 9%. Such a tax rate is relatively more favourable to most other jurisdictions.
- Canada’s insolvency laws allows a business to undergo “recovery” even after filing for insolvency such that businesses can file for a Proposal with the creditors.
- Canada has developed well-planned legislation to protect the environment through the use of permits that will restrict and control the discharge of pollutants into the environment.
- Enacting the new Impact Assessment Act, Canada’s initiative aims to provide the community with greater protection by allowing them to have participation rights in the projects that will affect them.
- Leveraging on its oil and gas industry to generate the country’s fortune, the country also faces various environmental issues such as climate change.
Contact us to find out more about Canada company registration. Our team of experts will revert within the next 24 hours.
Can a foreigner register a company in Canada?
- Yes, a foreigner can register a company in Canada but the requirements for a company registration in Canada for non-residents are stricter compared to that of other countries and jurisdictions. At least 25% of the Board of Director must comprise of resident Canadians. If the corporation has less than four directors, then at least one of the directors must be a resident Canadian. You will also have to submit additional documents such as a visa permit and a tax registration certificate if you are a foreigner.
How many directors and shareholders are necessary for company incorporation in Canada?
- There needs to be at least 1 director and 1 shareholder to incorporate a company in Canada. The shareholder and the director can be the same person. However, there must be at least 1 resident director in the company. If the company has more than 4 directors, at least one-quarter of the directors in the company must be a Canadian resident.
What are the differences between Federal Incorporation and Provincial/Territory Incorporation?
- A Federal Corporation is administered under the constitution of Canada while a Provincial Corporation is administered under the local provincial law based on the province it is registered in. A Federal Corporation can carry out business activities throughout Canada and enjoy higher foreign recognition and greater legal protection of its business name. However, a Federal Corporation may need to apply for extra-provincial licenses if it wishes to conduct business activities in certain provinces.
- To register a Federal Corporation, you will need to register two times: once with the federal government and another with the province in which your corporation is situated in. The registration cost for a Federal Corporation is usually lower than a Provincial Corporation.
How do I verify a company in Canada?
- There are two ways you can verify a company in Canada.
- The first way is through the Nuans name search report or a provincial name search report. The Nuans name search report provides you with a list of existing trade names in Canada and some provinces while the provincial name search report provides you with a list of trade names in specific provinces. You can verify the existence of a company through this name search report and apply for your trade name after you have confirmed that your trade name is unique. The cost of this name search report will vary depending on the jurisdiction you are applying from.
- Alternatively, you can also choose to conduct a name search during your online incorporation process if you are applying for a Federal Corporation. An additional fee of $13.80 will be charged for using this function.
How much does Canada company registration cost?
- The engagement fee depends on the services you require from Tetra Consultants. Prior to each engagement, our team will fully understand your business needs and inform you of the exact services you require.
- Tetra Consultants’ fees include government fees such as business name reservation charges, company registration fees and tax registration costs.
Can I use virtual office for company registration in Canada?
- Yes, you can use a virtual office for company registration in Canada. When you register for a virtual office, you will receive a registered business address in Canada which you can use to register your company. Any telephone calls or mail received will be directed to this registered address.
What is the difference between BIN & BN numbers?
- A BIN number is a business identification number issued by the Province of Ontario to identify business accounts in the Ontario province while a BN number is a business number issued by Revenue Canada to all corporations in Canada for the filing and payment of taxes.
Can you backdate company registration?
- A Canadian company is not allowed to backdate its company registration. Only charities are allowed to backdate their registration dates if they file with the Charities Directorate all information returns (Form T3010) that are due before the registration of the charity.
What business is best in Canada?
- Some of the more profitable business opportunities in Canada include financial services, transportation and warehousing, and retail services.
- The financial sector in Canada employs the greatest number of people and is one of the most profitable industry in Canada. However, the oligopoly of banks in Canada makes it difficult for new firms entering the banking business in Canada. Hence, it may be more prudent to provide financial services such as accounting, bookkeeping and financial consulting.
- Transportation and warehousing services are commonly provided by many Small and Medium-sized Enterprises in Canada and they are relatively profitable because of the huge US market located right next to Canada.
- Online retail sales have shown a sharp increase in recent years, hence it may be profitable to set up a business in the e-commerce industry or open a retail shop that provides online services in Canada.
How do I protect my business name in Canada?
- To protect your business name in Canada, you can choose to register your business name as your company’s trademark. Doing so will provide you with exclusive rights to the business name for a minimum of 15 years. In other words, other companies will not be able to register an identical or similar business name during this period. The trademark can be renewed indefinitely.
Do I need to register my business with Canada Revenue Agency (CRA)?
- Yes, you will need to register for a Canada Revenue Agency (CRA) program account to pay corporate, sales and other taxes. A CRA program account will also provide your company with a Business Number (BN) which is necessary for your company to access federal, provincial, and municipal government platforms in Canada.
Do I need to register my online business in Canada?
- Yes, you will need to register your online business in Canada even if all business activities are conducted online. This means that you will need to go through the standard process to register a company through the Canadian government website or the registry of a particular province.