To register a new company has some formalities (FDI rules) for the foreign investors and our discussion on limited company registration process in Canada. In an era of globalization, businesses are expanding beyond their national boundaries. It is no surprise to see more and more companies looking into other countries to establish their business there. Canada is among one of those countries which has attracted a lot of attention of the foreign investors and companies alike.
Canada provides a very stable market with a strong economy, great government support and an easy access to the US market as well. So, companies looking to conduct their business in Canada will have to formally register their companies in Canada before they can proceed. In order to incorporate their companies, there are certain steps one has to follow. Listed below are those simple steps:
Step One: Select Corporate Jurisdiction–
When registering a business in Canada, a company has the options of choosing to register their companies in either one of the 1 provincial and territorial jurisdiction available to them. Its either that or they can go with federal jurisdiction of incorporation.
This is the very first step of registering a company in Canada and should be done after thorough understanding of what each jurisdiction offers to the companies. Before deciding where to incorporate, one should think about the following questions;
- Where will the company go on to conduct their business?
- Will it be limited to one province or spread across the whole of Canada?
- Does the company require the protection that comes with the federal name?
- Will the corporate name be used in other provinces?
- Does the company name warrant federal incorporation?
- Are you planning to register more companies in the future? If so then the companies should be registered in the same provinces to make the next registration cheaper and easier.
Step Two: Selecting the company name–
In most cases, coming up with a company name may seem like a trivial matter. However, when it comes to registering a company in Canada, this is a very big issue.
A company name should be selected with great thoughts behind it. It should be descriptive enough to suggest what kind of company this particular business is about. Furthermore, if the name selected is a few letters or an acronym then it should be at least four to five letters long. There is the matter of selecting a unique company name too as part of company registration process in Canada.
One cannot choose a name that is already in existence. Meaning an investor or corporation will have to submit multiple proposals for company names so that a second name can be chosen in case the first one gets rejected.
Corporate names can be either in English, French or a combination of French and English. These names should end with the legal element and contain either of the following, Limited [LTD], Incorporated [Inc], Corporation [Corp]
Company registration in Canada for non-residents
Step Three: Complete articles of incorporation –
In order to register a company in Canada, no matter what jurisdiction it is in, the company has to fill in articles of incorporation. Before creating those articles, they have to make decisions based on the following procedure;
- Where the registered company in question will be located?
- How many shares will the company are authorized to issue?
- Will there be any sort of restrictions placed to avoid the transfer of shares? Will the company remain private?
- The number of directors to be appointed
- Will the number of directors be fixed or will there be a minimum or maximum number?
- The restrictions imposed on the company from conducting certain kinds of business activities
- What are any other restrictions that should be mentioned in the articles?
Step Four: Purchase corporate seal and minute book–
All companies in Canada are required by law to maintain some form of corporate records as company registration process in Canada. These include the following;
- A copy of the Articles of Incorporation
- Minutes of shareholder meetings
- Shareholder resolutions
- Directors register
- All the resolution of the directors
- Securities register
- Share transfer register
- Copies of any sort of forms filed with the government
Once these are managed the corporation is expect to create a company seal. This particular seal will be used on every single documents issued by the company in question. The seal should also have the name of the company.
Step Five: Obtain permits and other licenses–
A corporation would not be allowed to run legally in Canada without the appropriate business licenses and other permits. The company will have to register for a federal business number. This Federal Number will be used by the Canadian government to identify the company.
Once that is done, the company will have to apply for the provincial sales tax account. There is also the case of registering for the provincial Employer Health Tax & Worker’s Compensation. The type of business activities the company wishes to engage in will have an impact on the kind of license the company will need. It is always better to consult a lawyer to get a better understanding of these requirements.
Step Six: Open a bank account–
Can’t operate a business without a corporation bank account. In order to open a bank account, the company will have to provide the bank with all the articles of incorporation and any other articles of amendment.
All the authorized personal of the company should sign off on the bank account forms before the company can start issuing payments or utilizing the bank account. That’s all basic steps of company registration in Canada for nonresidents. For more detail of limited company formation information.
Read Also: Advantage of starting a business in Canada