LLC in Canada: Register a Foreign Limited Liability Company

ByMichela Ellis
limited liability company business owners

Originally Published Apr 21, 2016

Many business owners are familiar with the Limited Liability Company structure used in countries like the United States. This is a popular choice because of its flexibility and capacity to protect personal assets from business liabilities. However, in Canada, LLCs are not recognized as a formal business structure. This leads many entrepreneurs to ask, “What is an LLC in Canada?” or “How can I register my foreign LLC to do business in Ontario?”.

In this blog, we’ll explain what an LLC is, and how Ontario Business Central can help you register or renew your foreign LLC to ensure it complies with local regulations.

What is an LLC Company?

An LLC (Limited Liability Company) is a business structure that combines the advantages of both a corporation and a partnership. In this structure, the owners—called members—benefit from limited liability. This generally protects their personal assets from the business’s debts or legal issues.

LLCs also feature pass-through taxation, which allows the business’s profits and losses to flow directly to the members. Members can then report them on their personal tax returns. This avoids the double taxation associated with corporations, where the business and shareholders are taxed separately.

A Limited Liability Company (LLC) does not need to have a formal board of directors, unlike a corporation. Members of an LLC can manage the business themselves, or they can appoint managers to handle day-to-day operations.

This flexibility allows LLCs to tailor their management structure to fit the specific needs of their business. Smaller companies may find it easier to operate without the formalities that come with a traditional corporate structure. Additionally, this setup can help reduce overhead costs and streamline decision-making processes, offering a more agile business model.

LLCs in Canada

Although LLCs are widely used in the United States and many other countries, they are not recognized as a formal business structure in Canada. For those wondering How to start an LLC in Canada, the most common LLC equivalent in Canada would be a Corporation. Corporations are a separate entity from their directors, which helps protect personal assets from business debts and liabilities. Limited Partnerships in Canada also provide limited liability protection for some of the partners.

Foreign business owners who want to expand into Canada can register an LLC as an Extra-Provincial LLC. This registration allows the company to maintain its original structure while complying with Canadian laws, particularly in provinces like Ontario. If you’re wondering what limited liability company options are available in Canada, registering an EP LLC is the primary way for foreign companies to operate in the country.

How to Register a Foreign LLC in Ontario

To operate your LLC in Ontario, you must register it as an Extra-Provincial LLC (EP LLC). Here’s how the process works:

1. Who is Eligible?

You must have already registered your business as a Limited Liability Company in another jurisdiction, typically the United States. Forming an LLC as a new business is not an option in Canada, so this process applies only to existing foreign LLCs. You don’t need to be a Canadian citizen to register a foreign LLC or to be a member of one.

2. Required Documents

You will need to provide specific legal documents to register your foreign LLC in Ontario. These typically include the articles of organization or certificate of formation from the jurisdiction where the company was originally created. You may also need to supply proof that the registration is in good standing in its home country. Ontario does not create a new set of filed articles of organization when completing the license.

3. Authorizer

In Canada, LLC companies extra-provincially registered may have a general manager/representative, or a person acting under power of attorney authorize the filing. If the authorizer is a person acting under Power of Attorney, whether an individual or corporation/registered entity, they MUST have an Ontario address and an OCN or BIN.

4. Submit the Application

Once the necessary documents are prepared, you can submit the application. Ontario Business Central can assist with this process, ensuring that your registration is completed smoothly and efficiently. After approval, your company will be legally authorized to operate in Ontario as an Extra-Provincial Limited Liability Company.

Bring Your Limited Liability Company into Ontario

Renewing an Extra-Provincial LLC in Ontario

After registering your foreign LLC as an EP LLC in Ontario, the registration is valid for five years. To continue doing business, you must renew the registration every five years. Ontario provides a 60-day grace period after the expiration date for you to renew your registration. Failing to do so could prevent your business from operating in Ontario.

At Ontario Business Central, we offer services to assist with the renewal process. We file your documents on time to keep your business compliant with local regulations.

Benefits of Operating a Limited Liability Company in Ontario

Registering a foreign LLC as an Extra-Provincial LLC in Ontario has many benefits. Some of the most significant include:

  • Access to Canadian Markets: Allows your business to enter the Canadian market while retaining its limited liability structure. Ontario, in particular, offers great opportunities for expansion.
  • Limited Liability Protection: Your LLC will retain its original limited liability structure. Your personal assets will continue to be shielded from business liabilities. In comparison, owners of sole proprietorships or partnerships are personally liable for the business’s debts and obligations. Unlike the protection offered by LLCs or incorporation, this can put personal assets at risk.
  • Streamlined Registration: Instead of forming a new business entity in Canada, you can maintain your LLC while meeting Ontario’s regulatory requirements.

By taking advantage of Ontario’s Extra-Provincial registration process, you can expand into a new market without needing to restructure your business.

LLC vs. Corporation in Canada: What’s the Best Option to Start an LLC?

Before expanding into Canada, it is important to know the difference between a Limited Liability Company in Canada and a corporation. Both offer limited liability protection, but the choice comes down to taxation and management structure. Since LLCs are not recognized in Canada, you may need to choose between registering a foreign Limited Liability Company as an EP LLC or incorporating your business as a corporation under Canadian law.

In Ontario, small business owners can choose between a few other types of business registrations. General Partnership or Sole Proprietorship both offer simplicity and direct control over the business. Unlike incorporation, these options don’t create a separate legal entity, meaning the sole proprietor or general partners are personally responsible for the business’s debts and obligations. While this may work well for smaller operations, incorporating offers added liability protection, which is something small business owners should consider as they grow.

In general, if you want to keep your corporate structure intact, registering as an Extra-Provincial LLC is the best option. However, if you’re starting a new business in Canada, registering the Limited Liability Company equivalent in Canada, a corporation, will be necessary. Either way, Ontario Business Central can help guide you through the process.

Navigating the Unique Business Landscape

While LLCs are not a recognized structure in Canada, foreign businesses can still operate as an Extra-Provincial LLC in Ontario. Whether you need to set up an LLC in Ontario, or renew your EP LLC, Ontario Business Central is here to help. Our team will assist with the paperwork so that your business can operate smoothly in the Canadian market.

While forming a Canadian LLC isn’t possible, you can still complete LLC company registration by setting up your Ontario LLC through a foreign limited liability company LLC registration. Let us guide you through the process and ensure your business is compliant with Ontario regulations.

If you’re ready to expand your business or need assistance with your Extra-Provincial LLC, contact us today to get started!

inquiries@ontariobusinesscentral.ca
Toll-Free: 1-800-280-1913
Local: 1-416-599-9009
Fax: 1-866-294-4363
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Monday – Friday E.S.T.

Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.

Michela Ellis
Michela Ellis

Michela, who joined the OBC team in 2024, plays a pivotal role in driving our social media initiatives and coordinating strategic partnerships with other businesses. With a rich background in managing social media for local businesses, she has honed her skills in crafting engaging, impactful content and building meaningful collaborations that elevate brand visibility. Her thoughtful approach and creative flair not only strengthen our online presence but also help establish valuable connections within our industry. Now, Michela is bringing her wealth of expertise to our blog content, sharing insights, practical tips, and educational resources designed to support and empower our clients as they navigate their business journeys.