Should we Incorporate federally or provincially? This is a question many business lawyers receive from clients. The short answer is, of course, it depends. However, to put things into perspective, the majority of corporations that I incorporate are incorporated in Ontario. Ontario corporations tend to be a lot quicker to set up, and when it comes to a named company, Ontario corporations are a lot quicker to incorporate. With that being said, a Corporate name may be better protected at the federal level.
In Canada there are two ways to incorporate a company: (1) federally and (2) provincially. Each level of government has its own governing statute. For argument's sake, the federal act and Ontario act are similar in many ways, and are not the topic of this article. Some of the main practical differences between a federal and provincial company are:
⦁ Federal corporations require an annual ~$20 maintenance fee.
⦁ The process to obtain a named corporation is stricter at the federal level and may take longer.
⦁ Federal corporations require a provincial registration for the corporation's primary place of business.
⦁ Named corporations are compared to other business name registers by an examiner, rather than an individual or lawyer.
When incorporating you can choose a numbered company or a named company. While a federally incorporated corporation requires an examiner to take a more in-depth look at the business name and trademark registers, a federally incorporated corporation will not afford you with the same protection as a registered trademark.
If you have more questions about incorporations or business structures, get in contact with us.