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:
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