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Canada: Company Forms |
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Canada Introduction
Apart
from those business structures listed below,
businesses in Canada can also take the form
of sole proprietorships, joint ventures and
trusts. It is also possible to establish unlimited
liability companies in Nova Scotia, Alberta
and British Columbia.
There are a number of corporate structures that
can be used; it is necessary at the end of the
tax year to choose which of these structures
applies to the business for both tax purposes
and so as to best suit the needs of the business.
However, careful consideration must be given
to changing the corporation type from one to
another as this may have negative tax consequences.
The different types of corporation include:
-
The Canadian-Controlled Private Corporation
(CCPC);
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The Co-operative Corporation;
-
The Public Corporation; and
-
The Corporation Controlled by Public Corporation.
Details
of these types of corporation are available
on the Canada Revenue Agency website.
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Canada Private Limited Liability Company
The
Private Limited Liability Company is the most
widely used business structure in Canada. It
is a separate legal entity that is distinct
from its owners, and can therefore enter into
contracts and own property in its own name.
The company must have at least one director.
The type of registration required depends on
where in Canada the company is to operate. If
the company is to operate only in one state,
it need only register in that state. However,
if the company is to operate across Canada,
it must be registered under federal law; it
may also be required to register or be licensed
under state or provincial law.
The documents required for registration include:
-
The
Articles of Association;
-
An Initial Registered Office Address and First
Board of Directors Form; and
-
If required, a NUANS name search report dated
not more than 90 days prior to the filing
date.
It
is strongly recommended that a Corporate Name
Information Form also be supplied on registration.
The registration fee is CAD200 for online filing
through the Corporations Canada Online Filing
Centre, or CAD250 for filing by mail, fax, email
or in person.
.
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Canada Public Limited Liability Company
A Public Limited Liability Company is one that
has a class of shares listed on a prescribed
Canadian stock exchange. It must also comply
with prescribed conditions under the Income
Tax Regulations as to the number of shareholders,
the pubic trading of its shares and the company’s
size. The minimum number of directors depends
on provincial regulations, but is generally
at least three.
As with Private Limited Liability Companies,
the type of registration required depends on
where in Canada the Public Limited Liability
Company is to operate. If the company is to
operate only in one state, it need only register
in that state. However, if the company is to
operate across Canada, it must be registered
under federal law; it may also be required to
register or be licensed under state or provincial
law.
The documents required for registration include:
-
The
Articles of Association;
-
An Initial Registered Office Address and First
Board of Directors Form; and
-
If required, a NUANS name search report dated
not more than 90 days prior to the filing
date.
It
is strongly recommended that a Corporate Name
Information Form also be supplied on registration.
The registration fee is CAD200 for online filing
through the Corporations Canada Online Filing
Centre, or CAD250 for filing by mail, fax, email
or in person.
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Canada Partnership
A
Partnership consists of two or more people coming
together with the joint aim of pooling resources
in order to trade under one umbrella business
entity and make a profit. There is no requirement
for a written agreement or contract between
the partners.
Each partner must register for tax purposes,
and must account for his or her share of the
Partnership’s net income or loss on an
annual tax return. However, the Partnership
itself is not required to pay tax on its income,
nor file an annual tax return. If there are
six partners in the Partnership, though, the
Partnership must file an annual Partnership
Information Return.
It is also possible to establish a Limited Partnership,
thus limiting each limited partner’s responsibilities
and liabilities in a similar way to shareholders
in a corporation. A general partner in a Limited
Partnership will continue to have unlimited
liability.
Canada Branches and Representative Offices
A
Branch can be established in Canada by a foreign
corporation. The Branch must be registered or
obtain a licence in the province in which it
intends to carry on business. The definition
of “carrying on a business” varies
from province to province, so careful consideration
must be made to establish exactly what type
of business can be carried on in any one province.
It is possible for branches to benefit from
certain tax advantages, depending on the province
in which it is established. For example, in
some instances, losses incurred by the branch
can be offset against taxable profits earned
by the foreign corporation in other jurisdictions
– although this does, of course, depend
on whether the other jurisdiction allows such
offset.
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