COMPANY FORMATION IN CANADA

For company formation in Canada, the primary steps involve choosing a business structure, deciding between federal or provincial incorporation, selecting a name, and registering with the relevant government bodies. Foreigners can also form a company in Canada, but certain requirements apply. Step 1: Choose a business structure Consider your business goals, desired liability protection, and tax implications. Structures include: Sole proprietorship: Simple, single-owner structure with unlimited personal liability. Partnership: Owned by two or more people. Types include general (unlimited liability), limited (liability capped at investment for limited partners), and limited liability (protects against partners' misconduct). Corporation: Separate legal entity with limited liability for owners (shareholders). Offers potential tax advantages but is more complex and costly to set up. Co-operative: Member-owned and controlled, focused on meeting members' needs. Step 2: Decide on federal or provincial incorporation The choice depends on your business's scope and budget. Federal Incorporation Provincial Incorporation Business Scope Operate nationwide with one registration. Limited to a specific province. Name Protection Nationwide. Limited to the province. Name Approval Stricter standards, potentially longer process. Less stringent, faster approval. Cost Higher due to extra-provincial registration in other provinces. Generally lower, unless expanding to multiple provinces. Canadian Directors At least 25% generally required, though some provinces have removed this. Varies by province; some have no residency requirement. Step 3: Choose a name The name must be unique and not misleading. A NUANS report may be needed to confirm name availability. A numbered name is an option to save time and fees. Step 4: Prepare and file documents Requirements vary by structure and jurisdiction. Key documents include Articles of Incorporation and potentially corporate bylaws. You'll need to provide details like the business address, share structure, and director/shareholder information. Filing is done online or by mail to the relevant government agency. Step 5: Complete post-incorporation tasks After incorporating, you need to: Register with the CRA for a Business Number (BN). Obtain necessary licenses and permits (BizPaL can help identify these). Open a separate business bank account. Register for GST/HST if applicable (revenue over $30,000 annually). Set up corporate records, including a minute book