For many entrepreneurs planning to start a business in Canada, the first question is often: Should I choose federal incorporation or provincial incorporation? Here’s a concise comparison of the two:
Scope of Operations
Federal Incorporation: Allows operations in all provinces and territories (though some provinces may require additional filings or registrations).
Provincial Incorporation: Limited to the province of registration. To operate in other provinces, separate registrations are required.
Name Protection
Federal Incorporation: The company name is protected nationwide, and no other company in Canada can use it.
Provincial Incorporation: The company name is protected only within the registered province; other provinces can register companies with the same name.
Registration Process
Federal Incorporation: Registered with Corporations Canada, requiring annual filings and updates.
Provincial Incorporation: Registered with the provincial authority; requirements vary by province. If operating only within the province, annual filings are generally simpler.
Registration Costs
Federal Incorporation: Registration costs approximately $200-$250, with potential additional filing fees in some provinces.
Provincial Incorporation: Costs vary by province, e.g., around $300 in Ontario.
Recommendations
Choose Federal Incorporation if:
Your business operates or plans to operate nationwide.
You want the company name protected across Canada.
Choose Provincial Incorporation if:
Your business operates only within the province of registration.
You prefer a simpler and potentially less expensive registration process.
If you need further assistance, feel free to reach out for help!
