How to open a legal entity in Canada for business

Canada is often chosen for its clear rules and the ability to complete most procedures online. But each province has its own nuances, so it is important to determine the form of business and place of registration in advance. Below are the basic steps and checks that are most convenient to start planning with. More detailed information about Canada business visa processing time can be found on the website cbg-a.com.

What form and where to register

First, you should decide on the «shell» for the business.

In Canada, there are three: working for yourself as an individual entrepreneur (sole proprietorship), teaming up with a partner (partnership), or registering a company (corporation). Individual entrepreneurship is the easiest entry point, but all responsibility falls on the owner. Partnership is similar, only risks and profits are shared between the participants. A corporation is a separate legal entity: it better protects personal assets, is more convenient for investments, and provides more flexibility with shares — so it is chosen more often when it comes to growth.

Next — «where to register».

There are two ways: federal registration (under the Canada Business Corporations Act) or provincial. «Federal» gives a single name throughout the country and is easier when entering other provinces. Provincial is usually cheaper at the start and easier to maintain, but to work outside «your» province you will have to do an additional registration (extra-provincial).

In some regions, you still need a local address and even a resident director — it is better to check this point in advance so as not to run into formalities at the last moment.

And more about money and benefits. Taxes in Canada consist of a federal part and a provincial «superstructure».

Subsidies and grants are also tied to them — they are often available only to those who are registered in this province and conduct business there. A simple rule: if the team, clients and suppliers are concentrated in one region, start with provincial registration.

If you plan to work in several provinces from day one, take a closer look at federal registration with subsequent registration where you will actually work.

Check in advance:

• • where the office and actual operations will be (province, city);
• • requirements for directors and address (residence, postal/real);
• • industry licenses and permits (alcohol, food, financial services, etc.);
• • available grants/tax credits in the selected province;
• • annual fees, reporting and renewal dates.

Step by step: how to open a company

1) Name. Do a match search: NUANS (for federal) or provincial search. You can choose a numeric name and operate under a registered business name (DBA).

2) Constitutional documents. Submit Articles of Incorporation, indicate share classes, registered office address, board of directors. At the federal level — through Corporations Canada, in the provinces — through local registries.

3) Certificate. After verification, the registry issues a Certificate of Incorporation — a “certificate of creation” of your company.

4) Taxes. Get a Business Number (BN) from the CRA, and if your turnover exceeds 30,000 CAD in 12 months, register for GST/HST. If you hire employees, connect a payroll account (RP).

5) Bank account. The bank will ask for the incorporation documents, the protocol on the appointment of signatories, ID cards, and a brief description of the business.

6) «Minute book». Create a corporate book: by-laws, register of shareholders/directors, first resolutions, minutes.

7) Licenses. Check municipal requirements: zoning, sanitation, signs, home office, etc.8) Name/brand protection. If necessary, register a trademark (at the federal level — through CIPO).

Basic package of documents:

• • Certificate of Incorporation and Articles of Incorporation;
• • Resolution on the appointment of directors and authorized signatories;
• • Minutes of the issue of shares and the register of shareholders;
• • Business Number and (if applicable) GST/HST confirmation;
• • Lease/registered office address and directors’ ids.

Costs and Timeframes (Benchmarks)

Federal online registration fee is about CAD 200, provincial fees are higher or lower depending on the region. Annual reporting: confirmation of information in the registry and corporate declaration.

Most applications are processed in 1-3 business days, with a NUANS name reservation — up to 90 days to use the result. Bank account opening takes 1-7 days after KYC. CRA taxes usually take a few hours/days when submitted online.

What helps to avoid delays:

• • choose in advance whether there will be one class of shares or several (for investors/funds, a multi-class structure is useful);
• • do not delay receiving BN and GST/HST — without them, it is difficult to issue invoices interprovincially;
• • immediately determine who is running the “minute book” (a lawyer, a corporate provider, or the owner himself);
• • check whether your type of activity is permitted by the zoning of the selected address;
• • prepare a short “business plan summary” — banks are happy to request it.

Conclusion

The algorithm looks like this: determine the form and province, check the name, submit Articles, get a certificate, issue a BN