Starting a business in Canada can be a rewarding endeavour, however, it can be difficult to navigate the registration process. Regardless of whether you’re a foreign investor or a local business owner, understanding how to register a corporation in Canada is crucial.
This guide will offer thorough explanations of the procedure, requirements, costs, and benefits of incorporating your business in Canada. By the end, you’ll be well-prepared to embark on your business journey with confidence.
How to Register a Corporation in Canada?
The process of incorporating a corporation in Canada can be streamlined into five key steps:
1. Choose Your Incorporation Path:
Canada offers two incorporation options – federal and provincial/territorial. Here’s a quick breakdown to help you decide:
Federal Incorporation: Ideal for businesses operating across multiple provinces or planning to raise capital from the public.
Provincial/Territorial Incorporation: Suitable for companies that conduct their main business within a certain territory or province.
2. Secure a Unique and Catchy Business Name:
Names that appeal to your target market and accurately represent your brand identity should be brainstormed. Remember to conduct a NUANS (National Units on Names for Search) search to ensure the name is available and complies with federal and provincial/territorial regulations.
3. Prepare the Required Documents
You’ll need to prepare and file several documents, including:
Articles of Incorporation: This document outlines the corporation’s structure and basic operational details.
Corporate Bylaws: Bylaws govern the internal management of the corporation.
Initial Registered Office Address and First Board of Directors Form: This includes the corporation’s address and the names and addresses of the directors.
4. File the Articles of Incorporation
Submit the Articles of Incorporation to the appropriate regulatory body. For federal incorporation, this is Corporations Canada. For provincial incorporation, submit to the relevant provincial authority.
5. Acquire a Business Number and Register for Taxes
Once incorporated, acquire a business number (BN) from the Canada Revenue Agency (CRA). You will also need to register for applicable taxes, like the Goods and Services Tax (GST)/Harmonized Sales Tax (HST), payroll deductions, and import/export accounts.
Requirements for Registering a Corporation in Canada
Before you begin the registration process, it’s crucial to ensure that you meet the following requirements:
- Determine the type of corporation: Determine the extent of your business operations to determine whether to form a federal or provincial/territorial organization.
- Appoint directors: A minimum of one director, who is at least eighteen years old and not legally incapacitated, is required for your corporation.
- Appoint shareholders: A minimum of one shareholder, which may be either an individual or another corporation, must be appointed by your corporation.
- Obtain a business number: You’ll have to acquire a business number from the Canada Revenue Agency (CRA) for tax purposes.
Selecting a Company Name for Your Canadian Corporation
Choosing the right company name is a crucial part of the incorporation procedure.
Here’s how to ensure your name meets Canadian regulations:
1. Unique and Descriptive
Your company name ought to be distinctive and descriptive of the goods or services your enterprise provides. Avoid generic terms that could cause confusion.
2. Legal Elements
Include a legal element in your business name, such as “Incorporated,” “Limited,” “Corporation,” or their abbreviations (Inc., Ltd., Corp.).
3. NUANS Report
Conduct a NUANS (Newly Upgraded Automated Name Search) report to check the availability of your chosen name. This search compares your proposed name with existing corporate names and trademarks.
4. Avoid Prohibited Terms
Make sure no words that are illegal and could mislead the public or breach Canadian legislation are included in the name of your firm.
Costs and Fees for Registering a Corporation in Canada
You may create an efficient budget by being aware of the expenses associated with registering a corporation in Canada.
Here are the key expenses:
1. Incorporation Fees:
Federal Incorporation: Approximately CAD 200 online or CAD 250 by mail.
Provincial Incorporation: The cost ranges from CAD 100 to CAD 500, depending on the province.
2. NUANS Report: A NUANS report typically costs around CAD 75 to CAD 100.
3. Ongoing Compliance Fees: from CAD 20 to CAD 50 for federal corporations and slightly higher for provincial corporations.
Advantages of Incorporating a Corporation in Canada
Incorporating your business in Canada offers several significant benefits:
1. Limited Liability: Your personal assets are shielded from business debts and responsibilities by incorporation, which also reduces your personal culpability.
2. Tax Advantages: Corporations can benefit from lower tax rates, income splitting, and various tax deductions not available to sole proprietorships or partnerships.
3. Strengthened Credibility: The legitimacy of your company is increased by incorporation among suppliers, consumers, and possible investors.
4. Perpetual Existence: A corporation continues to exist independently of its owners, providing stability and continuity.
5. Access to Capital: Corporations can raise more money more easily by selling shares, which facilitates their ability to raise more funds and expansion.
Conclusion
It is a wise idea to register a business in Canada as doing so can have several advantages, such as reduced liability, tax benefits, and increased legitimacy. Even though the procedure is complex, it is doable given the right resources and assistance.
At IncPass, we make the registration process easier while offering knowledgeable support to make sure your company complies with all legal requirements. You may quickly register your company in Canada with IncPass and have access to other services like obtaining virtual office space, registering bank accounts, and more. Let us assist you in realizing your aspirations to become an entrepreneur.
FAQs
Can a non-resident start a corporation in Canada?
Certainly, non-residents are allowed to form corporations in Canada; but, they may need to choose a Canadian resident to serve on the board and adhere to specific residence criteria for directors.
What is the distinction between federal and provincial incorporation?
Federal incorporation allows you to operate across Canada, while provincial incorporation limits your business to the province of registration. Federal corporations also have a more recognizable business name search system (NUANS).
What are the yearly prerequisites in Canada for the upkeep of a corporation?
Annual requirements include filing an annual return, holding annual general meetings, maintaining accurate corporate records, and filing tax returns.
