In Canada, entrepreneurs have the option of incorporating a company federally with the Government of Canada, or provincially with the provincial government where their head office is located. Legally, there are only minor differences between federal and provincial corporations. Incorporating provincially won't stop you from serving customers outside of your home province, and incorporating federally doesn't necessarily make it easier to operate nationwide. The differences are subtle and both allow you to grow your business as you see fit.
For tax purposes, there are no significant differences between the two.
Unlike the United States, where companies make strategic legal decisions about their state of incorporation (which is why Delaware corporations remain very popular), Canada does not offer a wide-range of differences among the various provinces.
Founded currently offers incorporations in British Columbia, Alberta, and Ontario, as well as with the federal government. Below is a list of the key differences between federal and provincial corporations:
If you are based in Ontario, Founded allows you to choose between a federal or a provincial incorporation. Choosing a federal incorporation means your company will be incorporated pursuant to the Canada Business Corporations Act. Your chosen name will be registered nationwide. Additionally, federal corporations have slightly lower upfront costs, as government registration fees are approximately $100 less than provincial fees.
However, federal companies require slightly more ongoing paperwork than provincial corporations (certain documents will need to be filed both federally and provincially), and corporations must pay $12/year to maintain the company and file their Annual Return. Thankfully, we take care of the additional paperwork at Founded.
Ontario provincial incorporations are processed faster than federal corporations, and can be completed in a matter of minutes. A federal corporation usually takes about one business day to complete.
Currently, Founded allows Alberta companies to incorporate with the provincial government. Incorporating federally in Alberta is significantly more expensive, so most Albertans are content to incorporate provincially.
The Alberta government processes incorporations quickly during business hours, but it requires that the incorporator prove their identity before incorporating. Founded has built an identification-verification system, so you won't have to worry about this step taking additional time.
British Columbia Incorporations
Founded incorporates BC-based companies provincially with the BC government. Like Alberta, incorporating federally in BC is significantly more expensive, so most British Columbians are content to incorporate provincially.
Unlike federal corporations, BC companies can be incorporated by non-residents of Canada. This makes BC corporations a great solution if you're new to Canada or intending to operate a Canadian company from abroad. If you incorporate a numbered company (e.g 12345678 British Columbia Inc.), your BC corporation can be set up very quickly. If you wish to incorporate a named company, the BC name approval process takes roughly seven business days or you can pay an additional $100 fee to have it reviewed by the government within one business day.