What You Need to Know About Incorporation in Canada

Your Questions About Incorporation in Canada Answered

Discussing incorporation issues
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Wonder if you can set up an LLC (Limited Liability Corporation) in Canada? What the difference is between provincial and federal incorporation? Or how to incorporate your business in a particular province or territory? These incorporation in Canada FAQs will answer your questions.

Click on the appropriate question listed below to be taken to the answer.

Questions on the Incorporation in Canada Process

What is incorporation?
This definition explains what incorporation is, how it differs from other forms of business structure in Canada such as the sole proprietorship and the partnership, and discusses the benefits and drawbacks of incorporation.

How do you incorporate your business in Canada?
This article explains the steps to incorporation in Canada, from choosing your corporate name through the different incorporation documents you need to prepare to file for incorporation.

What are the different types of corporations in Canada?
Not all corporations in Canada are created equal when it comes to corporate taxes; Canadian-controlled private corporations enjoy corporate tax advantages the other types of Canadian corporations don't. Read all about it here.

What is the difference between federal and provincial incorporation?
Once you've decided to incorporate in Canada, this is the first decision you have to make; whether to incorporate federally or set up your corporation in a particular province or territory. This explanation of the advantages and disadvantages of both federal and provincial incorporation will help you decide.

How much does it cost to incorporate?
The answer to this question depends on where you choose to set up your new corporation as the cost of federal incorporation and the cost of incorporation in each province or territory is different. Here’s a comparison of the different incorporation in Canada fees you can expect.

What is a NUANS search and why is it necessary?
No matter where you incorporate your new company, you will have to get at least one of these done as part of the incorporation process, because one of the characteristics of incorporation is the business name protection it provides. Here are the details.

Can you set up an LLC in Canada?
This is a common question as LLCs are popular types of incorporation in the U.S. and other countries such as the U.K. and Mexico, but as you'll see in this article, Canada does not have an equivalent corporate structure.

What is extra-provincial incorporation?
Being incorporated in one province or in a foreign jurisdiction such as the U.S. does not automatically give you the right to conduct business anywhere in Canada. In fact, the different provinces and territories demand, in most cases, that corporations that have been incorporated elsewhere (other provinces, the U.S., etc.) register with them (and often pay a fee) before they can do business in their borders. Here are the details.

What constitutes "doing business" in other provinces where you are not incorporated, and what is extra-provincial registration?
Depending on your intended business activities, you may not be required to register in other provinces where you intend to conduct business. Even if you have to do so, the process of registering your business in the another province may be simple if the two provinces have reciprocal agreements for business registration, as this article explains.

How do you set up shares for a new corporation?
There are many ways to set up the share structure for a corporation, depending on the number of owners, dividend requirements, taxation and estate issues, and other factors that should be taken into consideration. Here’s what you need to know about setting up shares, something you need to do even if you’re setting up a corporation of one.

Salary or dividends - How do you pay yourself?
There’s no short and simple answer to this question, but it’s really important to get it right because of the potential tax repercussions. Here are the pros and cons of each of the ways you can take profits out of your corporation and some suggestions for creating the best tax scenario for yourself.

How to Incorporate in Various Canadian Provinces & Territories

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