Registering a Business in Canada
Registering a Business in Canada
Before you decide on a business structure, here are a few issues to think about:
• How easy is it to set up and operate?
• What are the tax advantages and disadvantages?
• What are the potential legal liabilities?
• How easy will it be to liquidate the business?
• Do you plan on raising more equity capital as the business grows?
• What are the regulations to keep the business structure active?
• How much record keeping is required?
• What happens to the business upon the death of the owner?
Type of the Business:
In Canada you can run a business as a sole proprietorship, partnership, and corporation. As a corporation, your business is a legal entity on its own, separate from you or any shareholders, and is seen almost like an individual under the law.
You may choose to incorporate your business at the federal or provincial level, if you plan on expanding outside of your province in the future, you’ll want to incorporate federally.
How to incorporate a business Federally
Incorporating a company federally is a four-step process.
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Step 1: Name your corporation
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Step 2: Create your articles of incorporation
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Step 3: Establish the initial registered office address and first board of directors
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Step 4: Submit and pay the fee
Step 1: Name your corporation
Every incorporation must have a name that legally determines and identifies it. The first step to incorporating is deciding on how you want to name your corporation.
Your corporation can have either a corporate:
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word name, made up of letters and symbols; or
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numbered name, for example, 12345678 Canada Inc.
A numbered name is the simplest way to name your corporation because the Canadian government assign the number. You can use a different name to conduct business.
With a word name, you have the legal right to use it across Canada once Corporations Canada approved your name.
Step 2: Create your articles of incorporation
This step establishes the structure of your corporation.
If you are incorporating a small business, consider choosing basic incorporation. This basic incorporation can enlist available pre-packaged
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pre-determined articles of incorporation (you can amend them later, as needed)
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one or two classes of shares
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a maximum of 10 directors
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an assigned, numbered corporate name.
Alternatively, you can customize your articles of incorporation to suit your specific business needs. In this case, choose custom incorporation and specify:
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your corporate name
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your share structure and any restrictions on share transfers
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your corporation's number of directors
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any restrictions you might want to set for your business or business activities
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any other provisions.
Language of the articles
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Your articles of incorporation can be in the official language of your choice. They can be:
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in either official language (English or French)
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in both official languages (English and French)
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bilingual (using both official languages equally).
Step 3: Establish the initial registered office address and first board of directors
Every incorporated business must have a registered office address and a board of directors.
The registered office is where you must keep your corporate records and where official documents will be served on the corporation. Choose an address where you will be sure to receive any legal of the corporation.
You also need to decide who will make up your corporation's board of directors. Check the Director requirements to make sure your directors meet the eligibility criteria. When you incorporate, you have to disclose each director's first name, last name, address, and indicate whether or not they are a resident Canadian.
Step 4: Submit and pay the fee
The fastest and simplest way to submit your incorporation application and pay is through our Online Filing Centre.