Last updated on March 21st, 2019 at 04:44 am
A federal or Canada corporation is completed through the federal government instead of any of the Provincial incorporations available across Canada.
What does a federal/Canada incorporation offer?
A federally incorporated company offers all of the same benefits as any Provincial incorporation such as:
- Limited liability protection for individuals
- Name protection (if business is named and not numbered)
- Flexibility to make changes such as the corporate name, address, directors, share structure
- Potential tax advantages
- Existence is continual (never require to renew or re-register)
- Greater access to capital
- Better branding if also completing trademark on same business
Why choose a federal incorporation over a Provincial Incorporation?
This is a question, we get almost everyday. There are advantages and disadvantages to completing a federal incorporation.
- Government fees to incorporate $200.00 (this is cheaper than most provinces)
- Higher recognition around the world
- In general better name protection for the business name once obtained
- Import and export licences is with the federal government
- Typically more difficult to obtain name approval for business name
- Annual return filing – every year required to update corporate record with government
- Business name must be approved by federal government examiner
- May take a day or two longer to gain approval and complete incorporation
Here are a few simple questions that may assist you in determining if a federal corporation suites your needs.
- Do you see opening physical locations for your business in other Provinces?
- Are you planning on advertising your business outside of your Province?
- Are you planning to trademark the same name?
- Are you in business with foreign countries?
- Will you be importing or exporting?
If you answered yes to any of these questions, perhaps a federal incorporation may be a good option for you.
Our information is simply a guide to assist you, we are not a law nor accounting firm. You may want to speak to professionals before you decide what is the best direction for you.
Laura Harvey is an entrepreneur herself as the owner of Ontario Business Central Inc. Her passion has always been about supporting the entrepreneurial spirit and advancement within Canada.
Laura authors in-depth blogs for Ontario Business Central assisting entrepreneurs and business owners to start, manage and grow their businesses. She has almost 30 years of expertise as a corporate specialist and 25 years of being an entrepreneur. Laura has the unique position of supporting a community that she also belongs to. She walks the walk right along with you.
You can find Laura on Linkedin and Twitter.