Not sure whether to incorporate federally or provincially? The following article outlines the main main differences between federal and provincial incorporation in Canada.
The main difference between federal and provincial incorporation in Canada lies in the jurisdiction under which your business operates. Here are the key points to understand about each option:
Federal Incorporation:
- Jurisdiction: A federally incorporated business operates across all provinces and territories in Canada.
- Business Name Protection: Federal incorporation provides broader name protection since your business name is protected at the national level.
- Trademark Protection: Federal incorporation allows you to obtain a federal trademark registration, providing additional protection for your brand nationwide.
- Extra-Provincial Registration: If you plan to conduct business in provinces other than the one where you are incorporated, you’ll need to register as an extra-provincial corporation in each additional province.
- Reporting Requirements: Federal corporations must comply with reporting requirements set by Corporations Canada, which include filing annual returns and financial statements.
- Costs: Federal incorporation generally involves higher initial and ongoing costs compared to provincial incorporation.
Provincial Incorporation:
- Jurisdiction: A provincially incorporated business operates within a specific province or territory in Canada.
- Local Focus: Provincial incorporation is suitable if your business operates primarily within a specific province and doesn’t have plans for nationwide expansion.
- Name Protection: While the name is protected within the province, it may not be automatically protected in other provinces. You may need to register your business name separately in each province where you conduct business to ensure protection.
- Provincial Regulations: Provincially incorporated businesses must comply with the specific regulations, reporting requirements, and laws of the province in which they are registered.
- Costs: Provincial incorporation generally involves lower initial and ongoing costs compared to federal incorporation.
How to Decide Between Provincial or Federal Incorporation in Canada:
When deciding between federal and provincial incorporation, consider factors such as the nature of your business, its scope, growth plans, and the level of name protection required. If you have plans to expand your business nationwide or want the added benefits of federal trademark protection, federal incorporation may be a suitable choice. However, if your business is primarily focused on a specific province and you prefer lower costs and simpler reporting requirements, provincial incorporation may be more appropriate.
It’s advisable to consult with legal and financial professionals who can provide guidance based on your specific business needs and objectives. They can help you understand the implications of each option and make an informed decision.
How to Incorporate Federally in Canada
If you plan to incorporate federally, you can do so on the Government of Canada’s website or use a service like Ownr for some added perks.
How to Incorporate Provincially in Canada
You can incorporate using Ownr or directly on the websites of the provincial and territorial government agencies responsible for business incorporation in Canada:
- Alberta: Alberta Corporate Registry Website: http://www.servicealberta.ca/corporate-registry.cfm
- British Columbia: BC Registry Services Website: https://www.bcregistryservices.gov.bc.ca/
- Manitoba: Companies Office (Manitoba) Website: https://companiesoffice.gov.mb.ca/
- New Brunswick: Service New Brunswick – Companies and Deeds Online Website: https://www.snb.ca/online/corppage/CORP-e.asp
- Newfoundland and Labrador: Registry of Companies, Department of Service NL Website: http://www.servicenl.gov.nl.ca/registries/companies/
- Northwest Territories: Department of Justice, Registrar General of Corporations Website: https://www.justice.gov.nt.ca/en/services/corporations/
- Nova Scotia: Registry of Joint Stock Companies Website: https://www.novascotia.ca/sns/access/business/registry-of-joint-stock-companies.asp
- Nunavut: Department of Community and Government Services, Registrar General of Corporations Website: https://www.gov.nu.ca/executive-and-intergovernmental-affairs/information/corporate-registries
- Ontario: Ontario Ministry of Government and Consumer Services – Companies and Personal Property Security Branch Website: https://www.ontario.ca/page/business-names-ontario
- Prince Edward Island: Corporate/Business Names Registry, Consumer, Labour and Financial Services Website: https://www.princeedwardisland.ca/en/information/finance/business-name-registration
- Quebec: Registraire des entreprises du Québec Website: https://www.registraireentreprises.gouv.qc.ca/en/default.aspx
- Saskatchewan: Information Services Corporation – Corporate Registry Website: https://www.isc.ca/Saskatchewan-Corporate-Registry/Pages/default.aspx
- Yukon: Government of Yukon – Corporate Affairs Website: https://yukon.ca/en/business/starting-your-business/register-your-business
