Types of companies in Canada

The following types of entities for starting a business in Canada are:

• 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.

Foreign companies can register branches, representative offices and subsidiaries in this country and our specialists in company incorporation in Canada can offer help with the local procedures. 

Partnerships in Canada

Two or more individuals can establish a partnership in Canada, which is considered a non-incorporated business, where the financial resources are combined and invested in the company or business. In accordance, the profits of the firm are shared as established in an agreed contract signed when the partnership was settled. In general partnerships in Canada, partners are subject to legally responsible debt payments, compared to the limited partnerships where an individual can underwrite to a business without being part of its actions. The main benefits of setting a partnership as part of company incorporation in Canada are the low costs, tax advantages and the equal share of the profits at a certain point.

Corporations in Canada

A corporation is also a suitable business option in Canada, considering the legal aspects and the requirements in this matter. For instance, the stockholder of such entity is not responsible for the company’s debts or any kind of obligations. Also, starting a company in Canada in the form of a corporation will be subject to a particular tax system and the business owner can have several advantages. One should know that the ownership of a corporation in Canada is transferable, and the formation of the company is made at a federal or territorial level. For any kind of incorporation in Canada, we remind that our company formation agents in Canada are at your disposal with comprehensive information about the registration process and the steps to consider when drafting the documents with the authorities in charge of business registration.

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 a 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 the 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.

It should be noted that each province has its own regulations related to the creation of subsidiary companies. Another interesting fact about Canada is that there are several types of subsidiaries which can be established here.

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.

We have also created a scheme showing the procedure of opening a company in Canada:

Documents for company incorporation in Canada 

Companies can be registered if the following documents are provided to the local institutions during the process of starting a business 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, suitable guidance when registering a business in Canada will be offered by our Canadian specialists in company incorporation.

We also invite you to watch our video on starting a business in Canada:

The competitiveness and the highly developed economy of Canada are the testimony of a friendly and opened market where entrepreneurs worldwide can activate in varied areas of business, considering a multitude of advantages adapted with the market’s requirements and needs. With an FDI inflow of about $49 billion registered in 2016 and a nominal GDP of around $1.52 trillion, Canada is an economic force (10th position among countries worldwide) and performant cities like Ottawa (the capital of Canada), Vancouver, Montreal, Quebec or Toronto are top locations for business purposes. Investors from abroad can establish several business forms like corporations, partnerships, co-operatives or sole proprietorships. For each kind of entity, varied conditions and requirements are imposed, in accordance with the Commercial and Civil Laws in Canada.

The requirements for starting a business in Canada can be explained by our team of Canadian company formation specialists who can also help you when drafting the documents with the authorities in charge. You can contact us for details about the procedures for company incorporation in Canada.