In Canada, entrepreneurs have the option of incorporating a company federally with the Government of Canada, or provincially with the provincial government where their head office is located. Legally, there are only minor differences between federal and provincial corporations. Incorporating provincially won't stop you from serving customers outside of your home province, and incorporating federally doesn't necessarily make it easier to operate nationwide. The differences are subtle and both allow you to grow your business as you see fit.
For tax purposes, there are no significant differences between the two.
Unlike the United States, where companies make strategic legal decisions about their state of incorporation (which is why Delaware corporations remain very popular), Canada does not offer a wide-range of differences among the various provinces. Ownr currently offers incorporations in British Columbia, Alberta, and Ontario, as well as with the federal government for companies based in Ontario. Below is a list of the key differences between federal and provincial corporations
If you are based in Ontario, Ownr allows you to choose between a federal or a provincial incorporation.
Choosing a federal incorporation means your company will be incorporated pursuant to the Canada Business Corporations Act. Your chosen name will be registered nationwide. A federal corporation usually takes between one to five business days to complete.
Federal corporations have slightly lower upfront costs, as government registration fees are approximately $100 less than provincial fees. However, federal companies require slightly more ongoing paperwork than provincial corporations (certain documents will need to be filed both federally and provincially), and corporations must pay $12/year to maintain the company and file their Annual Return. Thankfully, we take care of the additional paperwork at Ownr.
Federal Incorporations require that 25% of the directors of the company be "Resident Canadian". Read more about residency requirements here.
Ontario provincial incorporations are processed faster than federal corporations, and can be completed in one business day. The corporate name is only registered and reserved in Ontario.
Ontario provincial companies, can be incorporated by non-residents of Canada. This makes Ontario corporations a great solution if you're new to Canada or intending to operate a Canadian company from abroad.
Currently, Ownr allows Alberta companies to incorporate with the provincial government. Incorporating federally in Alberta is significantly more expensive, so most Albertans are content to incorporate provincially.
Alberta incorporations typically take one business day. The Alberta government processes incorporations quickly during business hours, but it requires that the incorporator prove their identity before incorporating. Ownr has built an identification-verification system, so you won't have to worry about this step taking additional time.
The corporate name is only registered and reserved in Alberta.
Alberta provincial companies can be incorporated by non-residents of Canada.
British Columbia Incorporations
Ownr incorporates BC-based companies provincially with the BC government. Like Alberta, incorporating federally in BC is significantly more expensive, so most British Columbians are content to incorporate provincially.
The corporate name is only registered and reserved in BC.
If you incorporate a numbered company (e.g 12345678 British Columbia Inc.), your BC corporation can be set up very quickly. If you wish to incorporate a named company, the BC name approval process takes roughly seven business days or you can pay an additional $100 fee to have it reviewed by the government within one business day.
BC provincial companies can be incorporated by non-residents of Canada.
Ownr incorporates Québec-based companies provincially with the Québec Registraire. Just like in Alberta and BC, incorporating federally in Québec is significantly more expensive, so most entrepreneurs opt to incorporate provincially.
The corporate name is only registered and reserved in Québec.
If you incorporate a numbered company (e.g 1234-5678 Québec inc.), your Québec corporation can be set up very quickly. If you wish to incorporate a named company, the Registraire must review your name and the process can take 3-4 business days.
Québec provincial companies can be incorporated by non-residents of Canada.
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