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Start-up a Corporation in Canada

Many foreign companies operate in Canada as corporations. A corporation is a business that is legally separate from its owners. You can incorporate in Canada under two jurisdictions:

  1. Under provincial law - If the business will operate in only one province, the company is incorporated provincially.
  2. Under federal law - Companies that plan to do business across Canada must be incorporated under federal law. Some types of business, such as banks, are subject to industry-specific legislation.

Start-up a Branch Office
Foreign corporations can set up a branch office in Canada, as long as they comply with the Investment Canada Act and provincial registration and licensing requirements.

There are certain tax advantages related to this business structure. However, the foreign business’ liability for the debts and obligations incurred in its Canadian operations is not limited to the Canadian operation.

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Start-up a Subsidiary Corporation
A foreign corporation can expand into Canada by incorporating a separate subsidiary corporation under Canadian Federal laws or any of the provincial statutes governing corporations. The registration process for a subsidiary is the same as for a corporation.

The main advantage to a branch office is that debts and obligations incurred in the Canadian operation are limited to Canada and will not affect the foreign corporation.

Start-up a Joint Venture
A joint venture exists when two or more people agree to contribute goods, services or capital to one business enterprise. Canada has no specific laws governing joint ventures. Currently, joint ventures are governed by the contract between the parties involved.

A joint venture contract should outline the terms of collaboration. It defines the contributions of everyone involved, the management structure and the sharing of profits. A lawyer can provide legal help with your joint venture. You can also contact us for assistance.

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Provincial Registration
A company does not need to federally and provincially. However, in many cases when a company is incorporated federally, they will likely be required to register their business in one or more province(s) and/or territory(ies) where they carry on business. Corporations Canada is working with provincial and territorial officials to decrease this burden.

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