Provincial Incorporation in Canada. Can You Do Business in Other Provinces?

Sep 25, 2023

 

If I Incorporate a Business Provincially in Canada, Can I Do Business in Other Provinces?

Sure, you have the option to conduct business in different provinces and territories if you establish your business in a specific province or territory. Nevertheless, it is necessary to register your corporation separately in each province or territory where you intend to operate. The complexity and duration of this registration process vary considerably depending on the province or territory where your business was originally incorporated and the additional locations you wish to operate in. (The process of Extra-Provincial Incorporation provides more information on this registration procedure.)

 

What Does It Mean To “Do Business” in a Province?

According to Michael J. Velletta, a Corporate and Commercial Law attorney and partner at Velletta & Company in Victoria, BC,

“Doing business for the purpose of registration typically means having employees, facilities or offices in the jurisdiction. Merely entering into contracts in Canada or selling goods or services in another jurisdiction, does not necessarily require registration in that jurisdiction” ( Some Provinces Have Reciprocal Agreements for Extra-Provincial Registration

If you start a business in British Columbia and later decide to operate in Alberta, the process is relatively straightforward. Due to the New West Partnership Trade Agreement (NWPTA), which includes BC, Alberta, and Saskatchewan, you are required to register your corporation in Alberta. If your corporation in BC has a specific name rather than a number, you will need to obtain a NUANS report. The cost for this report is currently $30 when obtained through the BC Registry Services. Assuming the name search is successful, the information is forwarded to the Alberta Registry, and an Alberta registration confirmation is provided. No additional fees are incurred for this process.

Moreover, under the trade agreement between these provinces, your corporation is not obliged to file an extra-provincial annual report.

Similar arrangements exist in other provinces as well. For instance, Nova Scotia has an agreement with New Brunswick. Consequently, if you establish a business in one province, there is no requirement to register it in the other.

In my opinion, Ontario is a favorable province for conducting additional business activities. Businesses that have been federally incorporated or incorporated in any other province or territory in Canada do not need an extra-provincial license to operate within Ontario. However, they must file an Initial Return/Notice of Change Form 2 (as per the Corporations Information Act) within 60 days of commencing business operations in Ontario. There is no fee for submitting this form.

Since there may be additional procedures and fees to adhere to, depending on your industry and municipal regulations, it is advisable to contact the Business Info Line at 1-888-745-8888 and speak with an Information Officer who can help you with your specific situation, according to Service Ontario’s recommendation.

Ontario and Quebec have a special agreement where if you originally incorporate a business in Ontario, you are not required to obtain an extra-provincial license to operate in Quebec, and vice versa. However, you still need to register your corporation in the other province. In Quebec, this involves filing a “D√©claration d’immatriculation” within 60 days of conducting business in the province.

 

Provinces That Do Not Have Agreements

Let’s return to the original example. If you have incorporated a business in British Columbia (BC) and want to conduct business in Manitoba, you will face some hurdles. BC and Manitoba do not have an agreement that covers the extra-provincial registration of corporations. Consequently, you will be required to undergo the extra-provincial registration process for Manitoba. This process involves a Request for Name Reservation, which comes with a filing fee of $40.00, and a Form #5: Application for Registration, costing $300. Additionally, you will need to file an Annual Return, which amounts to $50.00. If your business was initially incorporated at the federal level, you will still need to follow the same extra-provincial registration procedure to operate in Manitoba.

As you can see, conducting business in Manitoba, having already incorporated a business in another Canadian province or territory, is significantly more expensive and paperwork-intensive compared to incorporating in a different province and intending to conduct business in Ontario.

To be fair, this article does not aim to single out Manitoba. Most other provinces in Canada impose similar costly and burdensome procedures on domestic Canadian corporations that have their “home bases” situated elsewhere within the country. It is ironic that we have free trade agreements with other countries, such as the United States, but not between provinces within our own nation.

If your specific situation has not been addressed in this article and you need information about whether your corporation requires extra-provincial registration and the associated process in a particular province, you should reach out to the Corporate Registry of that province. The home page of the Incorporation FAQs provides a “How to Incorporate in Various Canadian Provinces & Territories” section containing links to each respective Corporate Registry.

 

Need more information? CBES is here to assist you; feel free to contact us for expert guidance.

 

 

 

 

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