Types of companies in Canada
- sole proprietorships – require a single member who conducts the business in his or her name;
- partnerships which can be general or limited and require at least two founding members;
- corporations which require at least one shareholder and a director;
- co-operatives which can be established as for-profit or non-profit reasons and can have a large number of shareholders.
Partnerships in Canada
Corporations in Canada
Co-operatives in Canada
The profit distribution, the limited liability, and full control of the activities are among the attributes of a co-operative in Canada. The association of members of a co-operative oversees its activities and such business entity can be set up as a for-profit or not-for-profit body. Even if it’s not the main selection when establishing a company, investors can choose this kind of entity if there is a need for gathering resources and providing access to mutual needs in accordance with the initial project. Please consider that at any time, an individual can change the business structure and adopt a new one if the plans have reformed or the improvements demand such transformation. For details about this and the procedures for company incorporation in Canada, you may contact our specialists.
Opening a subsidiary company in Canada
Foreign companies are drawn by the Canadian developed industries, such as manufacturing, energy, and pharmaceutics which is why they are interested in establishing their presence on the local market. A subsidiary company can be a good idea for an international company interested in company incorporation in Canada.The subsidiary company must follow the same legislation as local companies considering it will be registered as a corporation in Canada. The parent company must prepare the same set of documents as when registering a local business. Moreover, the Canadian subsidiary can be registered at a federal or regional level.
The following documents must be prepared for starting a business in Canada in form of a subsidiary:
- the Canadian company’s Articles and Association and its bylaws must be drafted;
- the parent company’s Articles of Association and Certificate of Incorporation are also necessary;
- information about the subsidiary’s directors and managers (these requirements will differ from province to province);
- the lease contract indicating the legal address of the Canadian subsidiary.
The Canadian branch office
Foreign companies seeking to control the Canadian entity can set up branch offices. This business form will follow the same registration requirements as the subsidiary and can also be established at a federal or provincial level. Foreign companies registering branches in Canada use these entities for specific projects which usually have a limited period.With respect to the documents needed to open a branch office in Canada, these are the same as for a subsidiary company, however, the parent company must also appoint a secretary.
Documents for company incorporation in Canada
- articles of association through the federal or provincial incorporation in Canada;
- the business number which is issued by the Canada Revenue Agency for tax purposes;
- detailed information about the new company’s shareholders (name, address, nationality);
- details about the business address of the company to be registered;
- information about the company’s bank account where the share capital will be deposited.
Once the company incorporation process in Canada has successfully ended, the business owner or his/her representative must apply for special licenses and permits, in order to start the activities. Besides legal support for your future company, a suitable guidance when registering a business in Canada will be offered by our Canadian specialists in company incorporation.
Company registration at federal and provincial levels in Canada
Foreign investors who want to set up companies in Canada can register them at federal or provincial level. The main difference between the two types of registration procedures reside in the possibility of offering services and selling goods on the Canadian territory: companies registered at a federal level can operate throughout the whole country, while companies incorporated at a regional level will be limited to operating in the province where the business is registered.Our Canadian company formation representatives offer registration services at both federal and regional levels.
Taxation of companies in Canada
In Canada, company taxes are applied at federal and local level. At a federal level, the maximum corporate tax rate is 38%, however, the authorities grant several tax deductions and thus the corporate rate can be lowered to 10% in the case of private corporations.
At provincial level, the following rates apply for investors intersted in starting a business in Canada:
|Territory||Lowest Rate||Highest Rate|
|Newfoundland and Labrador||3%||15%|
|Prince Edward Island||4.5%||16%|