Start Your New Business in Canada with Icon Offices
Start your new business in Canada with Icon Offices! Incorporate a company for only $39.99. Affordable virtual offices & prime addresses. Click here to succeed!
Starting a business is an exciting venture, especially in a foreign country. It can be an exciting as well as daunting venture. For those looking to start or expand their business in North America, Canada is recognised as the most business-friendly country. Canada’s legal regulations, financial and operational factors have influenced many entrepreneurs to incorporate their company. There are various opportunities available in Canada for business owners to tap into no matter where they are located.
Navigating the complexities of legal regulations while forming a company in Canada can be complicated, especially for foreigners. Icon Offices helps entrepreneurs from all around the world to incorporate their companies in Canada. This guide will give a comprehensive overview of how to form a federal corporation in Canada with Icon Offices, which will streamline the whole process for you.
What is a federal corporation in Canada?
A federal corporation operates under the federal government of Canada under the Canada Business Corporations Act (CBCA). Unlike a provincial corporation, this company structure can operate across various provinces and territories within the country.
A federal corporation is the equivalent of an LLC in other countries meaning it offers limited liability to shareholders. Shareholders are typically not liable for the debts incurred by the company and liabilities beyond their shares.
The structure is governed by a board of directors and must comply with the CBCA rules and regulations. In case of a change in ownership or management, a federal corporation can continue to exist independently.
What are the differences between a federal incorporation and a provincial incorporation?
There are two ways you can incorporate a corporation in Canada, the first one is incorporating your corporation federally and the second one is incorporating your corporation provincially. Provincial incorporation allows a company to operate in the province where it is incorporated and federal incorporation allows a corporation to operate anywhere in the country. However, federal corporations still need to register with the respective province in which it will conduct business. The registration requirements are different for each province and territory, but conducting business typically includes: having an address, a post office box or a phone number in a province or territory, or offering services or products in a province or territory.
The differences between the two structures include;
Jurisdiction
Federal Corporations can operate under the federal government and across various provinces and territories whereas provincial incorporation can only operate in the province where it is incorporated.
Name protection
Federal incorporation has name protection across Canada while the name protection of provincial incorporation is limited at the provincial level. Companies in other provinces can incorporate a company with a similar company name which can affect the business significantly.
Business reach
Companies incorporated federally can operate anywhere in Canada without limitations regarding the location of their head office, corporate records, or annual general meetings.
In contrast, companies that are provincially incorporated are limited to operating in their province of incorporation only.
Recognition
Companies that incorporate federally are recognised worldwide as Canadian corporations.
On the other hand, provincial incorporation lacks the same international recognition as federal corporations.
Online services
Federal incorporation facilitates online services for document submission, fee payments, and acknowledgments without the need for intermediaries. The processes for provincial incorporation can differ significantly from one province or territory to another.
What are the benefits of incorporating a federal corporation?
Limited liability: Federal corporations offer limited liability to shareholders and directors. This means that they are not liable for debts incurred by the company.
National recognition: Federal corporations are incorporated at a federal government level giving them national recognition.
Access to capital: Federal corporations can attract investors by selling shares to raise capital. Lenders and creditors can easily finance corporate structures.
Credibility: A corporation incorporated at a federal level enhances professionalism and credibility with customers and suppliers.
Tax advantage: Corporations are taxed at a lower rate than individuals and can benefit from tax deferrals, allowing you to reinvest earnings back into the business.
How to start a federal corporation with Icon Offices?
Eligibility check
To incorporate a federal corporation with Icon Offices, you will have to check your eligibility for incorporating a company in Canada. You are eligible to incorporate a company in Canada if:
- · If you are 18 years old and above
- · 25% of the directors are Canadian residents
- · Directors should not be bankrupt and should not have any criminal records
You can incorporate a company in Canada even if your company does not have any Canadian resident directors. In such cases we can help you incorporate a business corporation at a provincial level instead of a federal level.
Choose a company name
If you are eligible to incorporate a Federal Corporation in Canada, you can proceed with the next step which is choosing a name for your company. You can either opt for a numbered company name ( for example: 1234567 Inc. ) or you can choose a word name ( for example: Wetrade Inc. ). Incorporating a company with a numbered corporation name is quick, easy and cheap as compared to a word name. To incorporate a corporation with a word name additional factors need to be considered. Since, a federal corporation offers name protection across Canada your chosen name should be unique and should not be similar to other business names or trademarks in Canada.
A corporate name contains three elements:
- · a distinctive element (such as a surname or other unique term);
- · a descriptive element (e.g., Manufacturing, Consulting, Trading); and
- · a mandatory legal element (e.g., Corp., Inc., Ltd.).
Example: Gellers Trading Limited.
As part of your primary research you can check national databases and business registries for ensuring that your chosen name is not already being used by any other business. Once you finalise the name of your corporation you will need to acquire a NUANS report to support your application to incorporate your corporation.
The NUANS search report will search the Canadian database for existing corporate names, business names, and trademarks to determine if the one you have chosen is distinct from any other registered entity in Canada, encompassing names that are incorporated solely at the provincial level.
A NUANS (Newly Upgraded Automated Name Search) report is valid for 90 days from the date it is issued. This applies across Canada for both federal and provincial incorporations, including Ontario.
As part of our company formation service Icon Offices will also acquire the NUANS report for your company.
Create articles of incorporation
In Canada, the incorporation process relies on a crucial document: the Articles of Incorporation. This document explains the basic framework and laws of the company's framework after being established. It is usually filed before any provincial or federal government in Canada.
The flexibility in writing Articles of Incorporation allows you to cater to the needs of your business. You can customise the document to include:
- · Your company's unique name and branding
- · Details about share ownership and transfer restrictions
- · The number of directors who will oversee the corporation's operations
- · Any specific limitations or guidelines for your business
- · Additional provisions that reflect your company's distinct goals and objectives
You can make sure that your new business is well-planned and meets all the necessary legal standards by carefully drafting your Articles of Incorporation.
Establish a registered office address and appoint directors
All businesses that incorporate in Canada are required to maintain a registered office address. You need to set up a primary registered office and designate at least one director; however, you may choose to appoint additional directors as well.
The registered office serves as the location where all official documents for the company are sent. You can opt for Icon Offices registered agent services / virtual office services and use our address for your company. This will also help you keep your home address private and better manage your posts.
As the next part of the incorporation process you must submit the names and addresses of the directors while also indicating their residency status in Canada. It's essential to ensure that all directors fulfill the necessary eligibility requirements.
Additionally, you must file information regarding individuals who have significant control over the corporation, which may include shareholders, directors, or officers.
Registration
After gathering all the necessary documents, you can submit them to Icon Offices, and we will assist you in incorporating your company online.
Once your company is formed, we will share your company formation documents with you. The company formation documents for a Federal Corporation includes:
- · Certificate of Incorporation
- · Articles of Incorporation
- · Initial Registered Office Address and First Board of Directors
- · Corporate Information Sheet
- · Extra-provincial Registration (if applicable)
With this step-by-step guide you can seamlessly register your business with Icon Offices. If you encounter any hardship while incorporating your business, contact us at [email protected].