Federal CANADA Corporation

Fråga: As corporations are Provincially Registered, what is a Federal Canada Corporation then?

Svar: Corporations are registered and regulated by the province in which they are registered, which means a corporation has name protection against other corporations and companies starting under the same name in that province. However, if you have the intention to expand to have physical locations in other provinces in Canada in the future (think IKEA or H&M), it is more convenient to have one corporation as opposed to multiple corporations for each province that has a physical location.

Federal corporations give you the right to use your business name across all of Canada. It protects your company against another business in a different province using the same name. If you register your business only in a single province, you are only protected in that jurisdiction. If a business is using your name in another province, you won’t be able to register there. This can be problematic for businesses looking to expand operations in the future.

Enter, the Canada Corporation Option. You may incorporate and obtain name protection for all of the provinces in Canada through incorporating through Corporations Canada (a Canadian Federal Government department), and then proceed to register in the province you wish to operate out of. If you were operating out of B.C., you would first incorporate through Corporations Canada, then register your Canada Corporation with the Province of British Columbia since all registration still falls in the provincial Jurisdiction. Being a Federal Canada Corporation means going through the extra step of having to register in the province after incorporating.

The name protection that comes with incorporating a business in B.C. prevents other corporations and businesses from starting under a same or similar name. Forming a Canada Corporation prevents other companies starting under the same or similar names in other provinces. Thus, when you are ready to expand to those provinces your business name would still be available.

Cost Considerations

A federal incorporation offers greater protections, but this is offset by increased requirements. Extra costs may be associated with each of the filings, such as an extra annual filing for the federal corporation along with an annual filing for the province it is registered.

The current cost to incorporate Federally is $200 CAD with a federal name search called NUANS, which costs $20 CAD. Additionally costs may also be required for each province you intend to operate in. (Provincial registrations for federal Incorporations vary in cost. For example, in British Columbia, it costs $351.50 CAD and the filing is referred to as registering an “Extraprovincial Company”.)

Click the image below to incorporate a Federal Canada Corporation or to learn more.

Other Considerations

Unlike incorporating in provinces and territories that do not have residency requirements, for federal Canada Corporations, at least 25% of the directors of a corporation must be resident Canadians. However, if a corporation has less than four directors, at least one director must be a resident Canadian. At least 1/4 of the directors of a corporation must be resident Canadians.

If you wish to incorporate your company as a federal Canada corporation to protect your company’s name, explore trademarking to protect your intellectual property trade name and logo. Examples of Swedish companies with a registered trademark are below: