A corporation is a legal entity that is separate and distinct from its owners. In Canada, there are two main types of corporations: federal and provincial.

Federal corporations are incorporated under the Canada Business Corporations Act and are regulated by the federal government. Provincial corporations are incorporated under provincial legislation and are regulated by the government of the province in which they are incorporated.

Each type of corporation has its own advantages and disadvantages, so it is important to choose the right type of corporation for your business.

When it comes to incorporating your business venture, you can choose from a numbered or named corporation. A numbered corporation will simply have a number assigned as its name. However, numbered businesses can operate under a different trade name. That is why you don’t often see businesses operating under numbered business names.

A named corporation must have a unique name, with a distinctive and descriptive element, and end with a legal element like inc. or corp. Before submitting the name for approval, it must be checked against the NUANS system to ensure that someone else has not already claimed the name and it is available for the taking.

A numbered corporation is slightly more economical to set up because it does not require a NUANS search check. However, in the grand scheme of things, it is a minor fee.

In Canada, corporations have a strict structure that they must adhere to. They must consist of three groups of people: the directors that oversee the corporation, the officers that run the corporation, and the shareholders who are invested in the corporation. Though it may seem like you need a lot of people to run a corporation, in the case of small businesses, the roles could all be held by one or a few people.

There are five different types of corporations for tax purposes: Canadian-controlled private corporations (CCPCs), other private corporations (these are corps that do not meet CCPC qualifications), public corporations, corporations controlled by a public corporation (typically these are a subsidiary of a public corporation), and other corporations (such as Crown Corporations). Each type of corporation has its own set of rules and regulations with respect to qualifications and taxation.

For example, CCPCs are subject to a lower corporate tax rate than other types of corporations. However, there are also strict rules for qualifying for this type of corporation. As a result, it is important to know the different types of corporations in order to ensure that your business is properly structured for tax purposes.

A professional corporation is a type of private corporation and business entity that helps to protect licensed professionals from being held personally liable for wrongful acts committed in the course of their work. Doctors, lawyers, accountants, and other licensed professionals often form professional corporations in order to limit their liability in the event that they are sued.

Though incorporation has many advantages, if you only have a small business or have just recently begun a startup venture, you might not choose to incorporate your business right away. Consult an incorporation lawyer to understand the pros and cons of incorporation and whether it is right for you.

One of the biggest and most well-known legal advantages of incorporation is the protection of your personal assets against seizure by creditors or those who sue your business. Creating a separate entity in the eyes of the law keeps your business assets separate from your personal.

One of the biggest aspects that make corporations, unlike other business structures, is business perpetuity. When a company is incorporated, it becomes its own legal entity separate from the founder, meaning that it is no longer attached to the life of the founder. This means that the company will live on past the founder’s death and can be bought and sold.

All businesses need money to grow, but with an unincorporated business, you are very limited in what you can borrow. One of the benefits of a corporation is the ability to become a publicly traded company and thus raise money through selling company stock on the stock market.

When you’re ready to start a business, you want everything to be perfect. You’ve put together the perfect team, found the perfect location, and come up with a product or service that you know people will love. The only thing left to do is make it official by incorporating your business. The first step in incorporating your business in Canada is to decide the jurisdiction that you would like to incorporate under. You can choose between federal incorporation and provincial incorporation. In provincial incorporation, you are allowed to do business in the province that you have incorporated in and will need to register extra-provincially to carry on business in another province. Federally incorporated businesses can perform business across the entirety of Canada subject to extra-provincial requirements.

When choosing a business name for your corporation, there are numerous rules to follow, making it a more difficult process than might initially be imagined. Remember, you can choose from a numbered or named corporation, but if you opt for a named business, you must first run a NUANS report.

With all the basic decisions made about the corporation’s name and location, next, it is time to fill out all the necessary documents. Once the articles are completed, they must be filed by at least one incorporator who is competent, at least 18 years of age, and not bankrupt.

The package you submit to the Corporate Registry should include your incorporation forms, such as Articles of Incorporation, Notice of English/French Name Equivalency (optional), Notice of Address, Notice of Directors, Notice of Agent for Service for an Alberta or Extra-Provincial Corporation as well as the NUANS report for a named corporation, official identification, and payment for your government filing fees.

If your business incorporation is accepted, then you will be issued a certificate of incorporation.

Though filing the Articles of Incorporation are essentially the end of the incorporation process, there are several other steps that will need to be taken to ensure you keep up to date with general legal maintenance. This includes maintaining your corporate records and minute book, potentially creating a shareholder agreement, obtaining necessary permits, licenses, and more.