What is Company Registration in Canada?
Canada is the world's tenth largest economy having mixed economy allowing people to established and do trade of any aspect of economy from all over world. The resources of Canada is huge which is properly utilized in support of strong laws and regulation with development & used of science and technology in Business/Trade. Any person across the global can have access to incorporate and start business in Canada with hassle free compliance and regulatory framework in country.
Types of Company formation in Canada?
In Canada, there are four basic business structure to do business/trade. The person willing to do business here in country has to choose the good Business Structure as per their requirements to be registered in Canada for operation.
The list of Business Form and process to register are discussed below:-
1. Sole Proprietorship
It is very easy and inexpensive to register. The regulatory burden is very light and person do have direct control and decision making. In this type of business structure, creditor can make a claim against the individual assets as well as business assets in order to satisfy any debts.
It is non-incorporated business that is created between two or more people. In a general partnership, each partner is jointly liable for the debts of the partnership but in a limited partnership, a person can contribute to the business without being involved in its operations. This type of business form is fairly easy and inexpensive to form. Partnership Deed is major document to be prepared and kept safe to avoid any future dispute in business/trade.
It can be incorporated at the federal or provincial/territorial level. It is incorporated with legal recognition having a capability of ownership to be transferable. It is separate from its shareholder as far as separate legal entity is concern. As a shareholder of corporation, shareholder will not be personally liable for debts, obligation or acts of the corporation. It is preferred form of business as it is of limited liability, continuous existence and easier to raise capital than it might be with other business structure.
It is owned and controlled by an Association of members (AOM). It can be set up as a profit or as a not for profit organization. It is good to established as it is most democratic form of Business due to Democratic Control (like One Member One Vote). It has limited liability with the ownership and controlling by its members.
Before finalization of any form of Business Structure, it is always advisable to go through of below steps:-
a. Planning a business
Person required to plan the form and manner of operation of entity as a whole business plan, is most before move to any required steps/procedure to incorporate the business.
b. Choosing Business Name
Next job to person who is planning to do business in Canada, required to choose proper name of Business and need to follow consistently with all the communication and business operation.
c. Registering your business with the government
The next important matter for business structure is to register it with concern department for commencement of job.
d. Applying for permits and licenses
Irrespective of form/ structure of business, entity is required to obtain the permit and licenses as required by regulatory framework of Canada.
e. Getting business support and financing
Last but not the least, as a universal truth of business it is the step to be followed at any cost i.e. business support and financing for the same.
What is Company formation Process in Canada?
Before registration process start, make sure that you have decided the form of business/trade.
Step 1: Naming of Business
It must be such unique and easy to remember, and should describe the products and services the business provide.
Step 2: Business Number
Register person required to obtain Business Number to identify your business to federal, provincial and municipal governments. This Business number will be used for dealing with the government regarding GST/Harmonized Sales Tax (HST), payroll, import/export and other activities.
Step 3: Incorporation
It can be done federally or provincially. Both means either paper mode or online are available for incorporation.
Name Search: The name once approved will last for maximum 90 days and it will expire. Meaning thereby person registering corporation required to full fill other credentials within 90 days of Name Search.
Article of Incorporation: It need to be signed by the incorporator(s). If incorporator is a company then article must be signed by an individual authorized by that body. Person can file Article of Incorporation through Online Filing Centre or Complete Form 1 where person need to state proposed name, province or territory in Canada, share structure and restriction on share transfer, number of directors etc.
Language of Articles: It can be either French or English or both.
Step 4: Processing of Application
After all the above steps, the Corporations Canada will analyses and make sure Article of Incorporation have been properly and appropriately completed and that the proposed name is acceptable. Applications will be complete if it includes all necessary documents, forms are complete and signed and fees is included.
Step 5: Provincial and territorial registration
Registration is different from incorporation. If you run business, have an address or offer product or services other than incorporated address, required to take registration within a week after incorporation in each province to have permission of doing business/trade.
Step 6: Obtain Business Number or permits and other requirements
As per the Canada Revenue Agency (CRA), any person doing or running business either in province or federal required Business Number for GST/Harmonized Sales Tax (HST), Payroll deductions, corporate income tax, import and export duties and taxes. Some of Municipality also required permits to operate business on that locality like license of alcohol for restaurant services etc.
Canada is a country of opportunity due to availability of sound technology and transparent support of Canadian Government with abundance of resources. The rules and regulation is very friendly and less burdensome to followed and applied in Business or trade. Hence the resources backed by technology do give results where government is also supportive for investors to do business in Canada.