Registering your company in Canada can be complicated and making mistakes like registering incorrectly or at the wrong level can negatively impact your business. It is imperative to understand the differences between incorporating at a Federal/Provincial level and being extra provincially registered.
Companies that register at the Federal level can operate under the same name across Canada. The flexibility can be very useful, especially if the corporation decides to have operations in different provinces or territories. But that does not mean that the business can operate in any other province or territory other than the one they first register in. If they register at the provincial level, the name is only secure in that one area.
There can be many reasons as to why a company decides to incorporate in a specific province or territory in Canada. Some provinces may require a local Canadian director and for many international companies, they may not have any physical employees in the country. The company may choose to incorporate in a different province to avoid this requirement. But, this can pose a problem for business operations.
Companies that are incorporated in British Colombia, for example, are not able to operate in Quebec. They are only able to do business in British Colombia. To carry on business in another province or territory, the company must extra provincially register in the other individual jurisdictions.
The activities of businesses are constantly in flux so your business must think ahead and look at the bigger picture. If there is a possibility of your business entering into contracts, having an employee or be selling in a different province, it is important to register correctly.
The process for companies looking to extra provincially register their businesses varies depending on the province or territory. The costs and time for the approval also differ adding to the complexity.
For example, in Quebec, a Canadian company that is provincially incorporated and wants to extra provincially register must:
- obtain a name approval for the name in Quebec in English and French;
- submit an application that includes the type of company, their activities, any employees in Quebec;
- provide list of board and officers;
- provide list of shareholders;
- have a local address in Quebec or an attorney on record.
Additionally, all the forms for registering in Quebec are in French, adding another layer of complexity. Filling takes about 2-3 business days and costs CAD 200. After approval, the business will be issued the registration number (NEQ).
To keep your company compliant, an annual declaration must be filed every year to renew the registration. Every province is different but Quebec does impose a penalty if filed late. For businesses that are not compliant with extra provincial registering, there are penalties put forth by the respective Ministry/Registry.
Partnership trade agreement
If you decide to incorporate in any of these three provinces, British Colombia, Alberta and Saskatchewan, the corporation falls under the Partnership trade agreement. The agreement creates an interprovincial free trade zone. The benefit of this agreement that it streamlines the regulatory process to operate a business in these jurisdictions. Businesses incorporated in these provinces do not need to file multiple reports and registrations but they still need to have a local address in each province. Overall, the maintenance is less and its more cost effective.
For multinational businesses that do not want to incorporate in Canada but would rather set up a branch, they must be registered with a foreign extra provincial licence. The requirements are different and in addition to the business information, they must provide a copy of the certificate of incorporation of the parent company, a copy of the certificate of good standing of the corporation and, if the documents are not in English, they must be translated and notarized. The filing does not require the directors of the foreign corporation to be Canadian citizens or permanent residents.
An individual is required to be an 'Agent for Service'. This individual is required to be an individual who resides in Ontario and is 18 years or older or has a separate Ontario corporation.
We can help
TMF Canada can help local and foreign businesses incorporate and register in all provinces and territories in Canada. Our experts help companies maintain compliance while navigating through complex local laws and regulations. Contact our experts in Canada to find out how we can help grow your business.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.