Business entities in Canada

Business entities in Canada

Since 2003, Healy Consultants provides our Clients with the best corporate structures for doing business in Canada. The most common corporate structure used by foreign investors is the establishment of a Canadian Private Corporation. Entrepreneurs can alternatively setup a Canadian Public Corporation. Foreign legal entities looking to do business in Canada can either do so by establishing a Canadian Branch of a Foreign Corporation or a subsidiary.

The Canadian Private Corporation

    Canada business setup requirements for limited liability company (LLC)

  • The Canadian Private Corporation is the most common corporate structure used by entrepreneurs and investors setting up business in Canada. Depending on each Canadian territory or province, a private corporation may require at least 1 or 2 directors and shareholders at incorporation. The director of a private corporation must be an individual and depending on province may or may not be required to be a resident of Canada;
  • A Canadian Private Corporation required a paid up share capital of CAD1 at incorporation and must have any of the following words “Limited, Limitée, Corporation, Incorporated, Incorporée, Ltd., Ltée, Inc. or Corp.” at the end of the company name.

The Canadian Public Corporation

  • Like the private corporation, the Canadian Public Corporation requires at least 1 or 2 directors and shareholders depending on the provisions of the companies acts of the different Canadian provinces and territories. A Public Corporation is mostly established by investors looking to list the company on the local stock exchange;
  • A Canadian Public Corporation must also appoint one company secretary who must be an individual and must not be resident of Canada.

The Canadian Branch of a Foreign Corporation

  • Foreign companies looking to do business in Canada are permitted to setup branch offices in their preferred Canadian provinces and conduct business like any other legal entity in Canada. The foreign company is required to become licensed or register as an extra-provincial corporation in the particular province in which it intends to conduct business;
  • In certain provinces like Quebec, the branch of a foreign entity is required to adopt a French business name in conformity with the province’s trade charter.

Table of comparison between Canadian provinces/territories

 OntarioQuebecBritish ColombiaAlbertaManitobaSaskatchewan
Preferred legal entityPrivate CorporationPrivate CorporationPrivate CorporationPrivate CorporationPrivate CorporationPrivate Corporation
How long to set the company up?2 weeks2 weeks2 weeks2 weeks2 weeks2 weeks
How long to open company bank account?4 weeks4 weeks4 weeks4 weeks4 weeks4 weeks
Legal Liability?LimitedLimitedLimitedLimitedLimitedLimited
Wholly foreign owned?YesYesYesYesYesYes
Minimum share capital?CAD1CAD1CAD1CAD1CAD1CAD1
File annual tax return?YesYesYesYesYesYes
Tax registration certificate required?YesYesYesYesYesYes
Recommended corporate bank account?ScotiabankRBC Royal BankCIBCBank of MontrealHSBCScotiabank
Does our Client need to travel?NoNoNoNoNoNo
Resident director required?YesNoNoYesYesYes
Resident shareholder required?NoNoNoNoNoNo
Minimum directors allowed?111111
Minimum shareholders?111111
Tax Identification code needed?YesYesYesYesYesYes
Company secretary required?YesYesYesYesYesYes
Corporate shareholders allowed?YesYesYesYesYesYes
Corporate director(s) allowed?NoNoNoNoNoNo
Canada corporate tax rate?11.50%11.90%11%12%12%12%
Annual financial statements required?YesYesYesYesYesYes
Statutory audit required?YesYesYesYesYesYes
Regulated by?Canada Revenue AgencyQuébec RevenueBC Registry ServicesAlberta Corporate RegistryEntrepreneurship ManitobaSaskatchewan Corporate Registry
Allowed to issue sales invoices?YesYesYesYesYesYes
Allowed to sign contracts?YesYesYesYesYesYes
Allowed to import and export goods?YesYesYesYesYesYes
Capital/preferred cityTorontoQuebec CityVictoriaEdmontonWinnipegRegina
Can rent an office space?YesYesYesYesYesYes
Can buy Canadian property?YesYesYesYesYesYes
Can own equity in other Canadian companies?YesYesYesYesYesYes
Total Canada business setup costs in Yr. 1?
Subsequent annual costs (incl. accounting and tax fee)?
Sample engagement invoice?

Contact us

For additional information on our business setup services in Canada, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar