Company Registration in Canada

Canada is recognized globally for its stable economy, transparent legal system, and investor-friendly policies, making it an ideal destination for entrepreneurs and foreign investors to establish and grow their businesses. Whether you’re a local entrepreneur or an international business looking to expand, registering a company in Canada offers access to a diverse market, a skilled workforce, and numerous government support programs.

Company registration in Canada is a structured and straightforward process, governed by federal and provincial/territorial laws. Depending on your business goals, you can choose to incorporate federally to operate across Canada or provincially for specific regional operations.

In this guide, we’ll walk you through the essential steps, legal requirements, and key considerations to successfully register your company in Canada.

Types of Business Entities for Company Registration in Canada

When starting a business in Canada, choosing the right type of business structure is crucial. Each entity type has its own legal, tax, and operational implications. Below are the primary types of business entities available in Canada:

1. Sole Proprietorship

• Overview: A business owned and operated by a single individual.

• Key Features:

  • Easy and inexpensive to set up.

  • Full control by the owner.

  • Owner is personally liable for all debts and obligations.

  • Income is reported on the owner’s personal tax return.

2. Partnership

• Overview: A business owned by two or more individuals/entities who share profits and responsibilities.

• Types:

  • General Partnership (GP): All partners share liability.

  • Limited Partnership (LP): One or more partners have limited liability.

  • Limited Liability Partnership (LLP): Common among professionals; offers liability protection to partners.

• Key Features:

  • Shared management and risk.

  • Requires a partnership agreement.

  • Not a separate legal entity (except LLP).

3. Corporation (Incorporated Company)

• Overview: A separate legal entity from its owners (shareholders).

• Types:

  • Federal Corporation: Allows operation across all provinces and territories.

  • Provincial Corporation: Incorporates under a specific province and operates primarily there.

• Key Features:

  • Limited liability protection for shareholders.

  • Perpetual existence.

  • Subject to corporate tax rates.

  • Greater credibility and access to funding.

4. Cooperative (Co-op)

• Overview: A business owned and controlled by its members, who use its services or products.

• Key Features:

  • Democratic control (one member, one vote).

  • Profits distributed among members.

  • Can be incorporated federally or provincially.

5. Branch Office of a Foreign Corporation

• Overview: A foreign company can register a branch office to operate in Canada without forming a separate Canadian entity.

• Key Features:

  • Not a separate legal entity from the parent company.

  • Must register with the appropriate provincial authority.

  • Parent company is liable for branch obligations.

Eligibility Criteria for Company Registration in Canada

Before registering a company in Canada, it’s important to understand the basic eligibility requirements. These may vary slightly depending on the province and the type of business entity, but the general criteria include:

1. Age and Legal Capacity

• The applicant(s) must be at least 18 years old.

• Must have the legal capacity to enter into a contract (i.e., not mentally incapacitated or bankrupt).

2. Residency Requirements

• Federal Corporation:

  • At least 25% of the directors must be Canadian residents.

  • In case there are fewer than four directors, at least one must be a Canadian resident.

• Provincial Corporations:

  • Some provinces (e.g., British Columbia, Quebec) do not require Canadian resident directors.

  • Other provinces (e.g., Ontario, Alberta) follow the federal 25% rule.

3. Registered Office Address

• The company must have a registered office address in Canada.

• This address will be used for official correspondence and must be a physical address (not a P.O. Box).

4. Unique Business Name

• The business name must be distinct and not already registered by another entity.

• You can choose:

  • A Numbered Corporation (e.g., 1234567 Canada Inc.), or

  • A Named Corporation (which may require a NUANS name search for federal or some provincial registrations).

5. Minimum Number of Directors and Shareholders

• Private Corporation: Requires at least one director and one shareholder.

• Shareholders can be individuals or corporate entities, and foreign nationals are allowed.

• Share capital structure must be defined at incorporation.

6. Permits and Licenses

• Depending on the nature of the business, you may need to obtain specific federal, provincial, or municipal licenses or permits to operate legally.

7. Compliance with Industry-Specific Regulations

• If operating in regulated sectors (e.g., financial services, food, healthcare), additional certifications or approvals may be required.

Procedure for Company Registration in Canada

Registering a company in Canada involves a clear and well-defined process governed by Corporations Canada at the federal level and respective provincial registrars at the provincial level. You can register a company either federally (to operate across all provinces) or provincially (to operate in a specific province).

Step 1: Choose the Type of Business Entity

• Decide on the most suitable structure:

  • Corporation (most common for liability protection)

  • Sole Proprietorship

  • Partnership

  • Cooperative

• Most foreign investors prefer incorporating a corporation.

Step 2: Choose Federal or Provincial Incorporation

• Federal Incorporation: Allows operation across all provinces/territories; governed by the Canada Business Corporations Act (CBCA).

• Provincial Incorporation: Register in a specific province (e.g., Ontario, British Columbia); ideal for local businesses.

Step 3: Name Your Company

• Choose between:

  • A Named Corporation (must be unique and descriptive)

  • A Numbered Corporation (e.g., 12345678 Canada Inc.)

• Conduct a NUANS name search report (required for named corporations, except in Quebec).

Step 4: Prepare Incorporation Documents

• Articles of Incorporation

• Registered Office Address

• Initial Registered Directors and Shareholders

• Corporate Name Reservation (if applicable)

• Consent to Act as Director (optional but recommended)

Step 5: Submit Incorporation Application

• File online through:

  • Corporations Canada (Federal)

  • Respective provincial registries (e.g., ServiceOntario, BC Registry Services)

• Pay the applicable incorporation fee (varies by jurisdiction).

Step 6: Obtain a Business Number (BN) and Tax Accounts

• Register with the Canada Revenue Agency (CRA) to obtain:

  • Business Number (BN)

  • GST/HST Account (if annual revenue exceeds CAD 30,000)

  • Payroll Account (if hiring employees)

  • Corporate Income Tax Account

Step 7: Register for Provincial Licenses and Permits

• Depending on your business activities and location, obtain relevant:

  • Municipal business licenses

  • Zoning permits

  • Industry-specific approvals

Step 8: Open a Corporate Bank Account

• Use your incorporation documents, BN, and personal ID to open a business bank account in Canada.

Step 9: Maintain Corporate Compliance

• File Annual Returns with Corporations Canada or the provincial authority.

• Maintain corporate records, meeting minutes, and up-to-date director/shareholder information.

• Fulfill tax filing and reporting obligations annually.

Various Taxes Applicable to Registered Companies in Canada

Registered companies in Canada are subject to several federal and provincial/territorial taxes, depending on their structure, operations, and location. Understanding these taxes is essential for compliance and financial planning.

1. Corporate Income Tax

• Federal Tax Rate:

  • Basic rate: 15%

  • Small business deduction (SBD): Reduced to 9% for Canadian-controlled private corporations (CCPCs) on the first CAD 500,000 of active business income.

• Provincial/Territorial Tax Rates:

  • Vary by province (e.g., Ontario: 11.5%, British Columbia: 12%, Quebec: 11.5%).

  • Total effective corporate tax (federal + provincial) typically ranges from 23% to 31% depending on location and eligibility for the small business deduction.

2. Goods and Services Tax (GST) / Harmonized Sales Tax (HST)

• GST: A federal consumption tax of 5%.

• HST: A combined federal and provincial tax, applicable in provinces that have harmonized (e.g., Ontario: 13%, Nova Scotia: 15%).

• Businesses must register for GST/HST if annual taxable revenues exceed CAD 30,000.

3. Provincial Sales Tax (PST) / Retail Sales Tax (RST)

• Applies in provinces that have not harmonized with the federal GST:

  • British Columbia: 7% PST

  • Manitoba: 7% RST

  • Saskatchewan: 6% PST

• Collected separately from GST and remitted to the respective provincial authority.

4. Payroll Taxes and Deductions

Companies with employees must deduct and remit:

• Canada Pension Plan (CPP) contributions

• Employment Insurance (EI) premiums

• Income Tax Withholding

• Provincial payroll taxes (if applicable, e.g., Ontario’s Employer Health Tax)

5. Withholding Taxes

• Applicable on certain payments made to non-residents (e.g., dividends, interest, royalties).

• Standard rate: 25%

  • May be reduced under tax treaties (e.g., 5–15%).

6. Other Applicable Taxes (Industry or Province Specific)

• Excise Tax/Duty: On alcohol, tobacco, and fuel.

• Carbon Tax/Environmental Levies: May apply based on location and sector.

• Digital Services Tax (proposed): Targeting tech companies with digital revenue in Canada (pending final implementation).

Documents Required for Company Registration in Canada

To register a company in Canada, whether at the federal or provincial level, certain key documents must be prepared and submitted. These documents ensure the legal structure, ownership, and operations of the business are clearly defined and compliant with Canadian corporate laws.

1. Articles of Incorporation

• The foundational document that outlines:

  • Company name

  • Registered office address

  • Share structure and rights

  • Number and powers of directors

  • Incorporator(s) details

• Filed with Corporations Canada (for federal) or the provincial registrar.

2. NUANS Name Search Report (if using a named corporation)

• A Newly Upgraded Automated Name Search (NUANS) report is required for named corporations (not needed for numbered companies).

• Confirms that the proposed company name is unique and not in conflict with existing registered names.

• Note: Not required for incorporations in Quebec.

3. Notice of Registered Office Address

• Must provide a physical Canadian address for official correspondence.

• Can be a business or lawyer's office; P.O. Boxes are not accepted.

4. Notice of Directors

• A list of initial directors including:

  • Full legal name

  • Address

  • Residency status (some provinces and federal require at least 25% Canadian resident directors)

5. Incorporator(s) Information

• Details of the individual(s) or legal entities incorporating the company.

• Includes name, address, and signature.

6. Consent to Act as Director

• A signed declaration from each appointed director confirming their consent to act.

• While not mandatory for filing in all jurisdictions, it is recommended for internal records.

7. Shareholder Information & Share Structure

• Information on the initial shareholder(s).

• Number and types (classes) of shares to be issued.

• Rights and restrictions associated with each class of shares.

8. Company Constitution or Bylaws (optional but recommended)

• Governs internal operations, voting rights, director powers, and shareholder relations.

• You can either:

  • Adopt replaceable rules (default rules under the law), or

  • Submit a customized corporate constitution.

9. Identification Documents

• For each director, shareholder, and incorporator:

  • Passport or Government-issued ID

  • Proof of address (e.g., utility bill, bank statement)

Benefits of Company Registration in Canada

Canada is one of the most business-friendly countries in the world, offering a stable economy, strong legal framework, and global trade access. Registering a company in Canada comes with a wide range of advantages for both local and foreign entrepreneurs.

1. Access to a Stable and Growing Economy

• Canada consistently ranks among the top G7 economies.

• Offers macroeconomic stability, low inflation, and high levels of investor confidence.

2. 100% Foreign Ownership Allowed

• Foreigners can own 100% of a Canadian corporation, especially under federal or certain provincial jurisdictions (e.g., British Columbia, Quebec).

• No mandatory local shareholding in many sectors.

3. Limited Liability Protection

• Incorporation provides separation between personal and business assets.

• Shareholders are only liable up to the amount invested in shares.

4. Low Corporate Tax Rates with Incentives

• Combined federal and provincial tax rates are competitive.

• Small businesses may qualify for the Small Business Deduction (SBD), reducing the tax rate to as low as 9% federally.

• R&D credits and other tax incentives are available.

5. Access to International Markets

• Canada has free trade agreements with over 50 countries, including:

  • US & Mexico (CUSMA)

  • EU (CETA)

  • Asia-Pacific nations (CPTPP)

• Ideal base for export-oriented businesses.

6. Reputable Global Business Image

• A Canadian-registered company enhances credibility and trust.

• Attracts more clients, partners, and investors due to Canada’s global standing.

7. Skilled Workforce and Innovation Ecosystem

• Access to a highly educated and skilled workforce.

• Strong support for innovation through government grants, accelerators, and tech hubs.

8. Ease of Doing Business

• Straightforward company incorporation process (can be done in as little as a few days).

• Efficient online services from Corporations Canada and provincial registries.

9. Permanent Establishment for Visa or PR

• Company registration can support visa or immigration applications, including Entrepreneur or Start-up Visas.

• Helps foreign investors establish long-term presence in Canada.

10. Asset and Name Protection

• Incorporation provides exclusive rights to your business name across jurisdictions.

• Ensures business continuity and transferability of ownership.

Why Choose YKG GLOBAL for Company Registration in Canada?

Choosing the right partner for company registration can make all the difference—especially when navigating international compliance, legal complexities, and tax obligations. YKG GLOBAL stands out as your trusted consulting partner for seamless business setup in Canada.

 1. Over 40 Years of Experience

With over four decades of expertise, YKG GLOBAL has helped thousands of clients across the globe establish and scale their businesses with complete legal clarity and operational efficiency.

 2. Global Perspective, Local Insight

Our consultants combine global business knowledge with deep insight into Canadian federal and provincial regulations, ensuring your company is registered the right way, the first time.

 3. End-to-End Support

We provide comprehensive assistance, including:

• Company structure advisory

• Name reservation & NUANS reports

• Federal or provincial incorporation

• Tax registration (BN, GST/HST)

• Banking & compliance guidance

Everything under one roof—no third parties, no confusion.

 4. Tailored for Foreign Entrepreneurs

Whether you're a non-resident or an international enterprise, we specialize in 100% foreign-owned Canadian company setups, including subsidiary registration and nominee director services (if required).

 5. Transparent Pricing with No Hidden Costs

Our pricing model is clear and upfront. We offer flexible packages based on your business needs—with no hidden fees or last-minute charges.

 6. Fast Turnaround Time

Thanks to our streamlined internal processes and government liaisons, we help you incorporate in just a few business days, keeping your business plans on schedule.

 7. Ongoing Compliance & Advisory

Our relationship doesn’t end with registration. We assist with:

• Annual returns filing

• Corporate tax & accounting

• Expansion, licensing, and legal advisory

• Mergers, restructuring, and more

 8. Multilingual & Multi-country Support

Serving clients in over 20+ countries, including India, UAE, Germany, Singapore, and Brazil, YKG GLOBAL brings the world to your business.