Set up a Corporation in Canada
Updated on Tuesday 14th January 2020
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From the beginning, we mention that a corporation is a preferred business form in Canada, just like limited liability companies are chosen for incorporation in numerous countries worldwide. Because LLCs are not available in Canada, foreign investors can set up corporations that present the same attributes as LLCs. In compliance with Canadian legislation, our specialists in company formation in Canada are able to offer assistance and guidelines for all entrepreneurs who want to register a company in Canada, whether as residents or non-residents of Canada.
Steps in opening a corporation in Canada
A corporation in Canada can be set up in one of the 13 jurisdictions (provincial and territorial) in the country or in the federal jurisdiction. The Canada Business Incorporations is in charge of registering the companies and the authority which issues the registration certificate of a firm. Here are the main requirements one should consider when registering a corporation in Canada:
• reserve a distinctive name for your corporation – the name can also be a number issued by the Trade Register;
• draft, notarize and submit the Articles of Association with the federal or provincial Trade Register;
• provide information, such as identification papers, about the owners of the Canadian company;
• submit documents of the business location, such as the address of the company;
• appoint the managers of the corporation – their personal information must also be filed with the Trade Register;
• open the company’s bank account and deposit the share capital of the business;
• prepare the corporate seal – it must also be submitted with the Companies Registrar upon incorporation;
• register for tax purposes, obtain a VAT number and register for social security and employment purposes.
In addition to the documents and requirements mentioned above, a corporation cannot be set up without a minute book which needs to comprise the directors register, a copy of the Articles of Association, securities register, the resolution of managers and the share transfer register. Our Canadian company formation agents are able to offer complete support in drafting the documents for your corporation in Canada.
The Articles of Association of a Canadian corporation
The Articles of Association are the most important documents when setting up a corporation in Canada. These must contain the following information:
- who the shareholders and the company directors are, as well as their duties and rights;
- the number of shares issued by the company and their allotment to the shareholders;
- the types of shares to be issued by the company and if any restrictions apply;
- the activity or activities which will be undertaken by the Canadian corporation;
- other clauses and specific information that the shareholders want to mention.
You can read about the creation of a corporation in Canada in the scheme below:
The corporate minute book of a Canadian corporation
Once the certificate of registration of the corporation has been received, the next step is to determine and organize the structure of the company. We mention that the organization of the corporation involves written documents which are kept in a corporate minute book. Such documents are prepared and presented in a meeting held by the stockholders and the managers of the corporation.
Register for a federal business number
Each corporation must register for the federal business number which is used for tax purposes by the financial authorities. For example, the federal business number will be verified for federal corporate income taxes and payroll source contributions. Furthermore, a corporation in Canada must register any non-corporate business name different from the name of the company which will be used in the province in which the activities take place. Please consider that this requirement is mandatory.
Please watch our video on how to set up a corporation in Canada:
How long does it take to register a corporation in Canada?
The timeframe for registering a corporation in Canada is detailed below:
- preparation of the incorporation documents - 1 day;
- business name reservation - 1 day;
- filing the incorporation documents - 1 day;
- tax and VAT registration - a few hours.
For extra information about how to register a corporation in Canada, we suggest you get in touch with our local company formation representatives.