Incorporation in Canada – All Your Questions Answered

Nov 10, 2023

In this video I will provide answers to the most frequent questions that I deal with about incorporating a business in Canada. These questions are relevant for all types of incorporators — Canadian and non-resident.

Is Federal Corporation Better?

There is no difference from the following perspectives:

  • Where it can operate
  • What it can do
  • Registration requirements in case of multi-provincial operations

Watch our video about Federal vs. Provincial Corporations here:

   • Federal vs  Provincial Incorporation …  

What is the minimum capital investment? 

  • In Canada there is no mandatory requirement for minimum capital investment.
  • A Company could be incorporated with $1.00
  • Basic planning is needed for the future capital tax benefits (future sale of shares/exit).

Can I incorporate alone?

Yes. One person can incorporate and operate a corporation in Canada

No need for additional partners 

There are no limitations on the number of partners that could be involved in a corporation

Do I need to give shares to the director/s?

  • No, there is no mandatory requirement to provide shares to a director of the corporation, and there is no requirement for the shareholders to be directors.
  • Directors, officers, and shareholders could be different individuals or could be the same person all three.

Registered Address – Rules

  • Must be located in the province where the corporation is registered.
  • Could be residential or commercial 
  • Cannot be PO Box

Do I need to register in each province where I operate?

  • The rule for mandatory registration is “permanent presence”, which means that you have one of the following in a province other than the province of the initial registration:
    – Office with employees 
    – Warehouse
     Physical operations on a permanent basis
  • If you only ship from one province to others – not necessarily
  • If you provide services online – not necessarily

What is the annual cost of maintenance?

  • Annual corporate return – could be done by the company, if 3rd party is used – $300 – $500/year
  • Annual Income Tax Report – $700 – $3,000+
  • HST and Payroll annual reports – $500 – $1,000

Do I need a corporate bank account?

  • There is no mandatory requirement for a bank account
  • An account will be needed to pay wages, source deductions, taxes, etc.
  • No special requirements for a bank account

Can a corporation operate different businesses?

  • Yes. There is no limitation on the number of businesses that a corporation may operate.
  • Make sure that articles of incorporation do not limit it to one business only

Can I operate under a different name(s)?

  • Yes. But every name must be registered 
  • A corporation may operate multiple businesses under multiple names under the same entity
  • Registration is done under the provincial registry even for Federal corporations
  • There are no limitations on the number of names that a corporation may have

You can find Contracts for Business Owners in Canada here https://www.businessdocs.ca/

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