Company Formation Services in Canada
Over the years, Canada has grown into one of the biggest global markets that has provided a suitable environment for various new enterprises and businesses and helped them to prosper greater heights in their professional sphere of life. This has facilitated an increased demand for effective Company Formation Services which plays an important role in the guidance of young entrepreneurs in setting up their new business.
WHAT HAS BEEN THE REASON FOR RISE OF CANADA IN TODAY’S BUSINESS WORLD?
Today globally, Canada stands as one of the biggest global destinations for Education, Business, Trade and Commerce. The rise of Canada in the Business as well as Economic Sphere can be attributed to the various investments that have propelled the growth of small businesses and commercial establishments.
The Local administration and authorities has contributed a great deal in ensuring effective solutions in setting up of new business activities and has made sure that a suitable Business Environment is in place for the establishment of new businesses and enterprises.
HOW TO SET UP YOUR BUSINESS IN CANADA?
Before setting up your business in Canada, it is important to know about certain guidelines and regulations that need to be followed.
Some of the important steps for setting up new businesses in Canada are as follows
Selection of Name for your Business
A Unique Name has to be selected for the setting up of new businesses. The Unique Name helps to create a sense of exclusivity for the business and helps to build up the Brand Value.
Choose the Type of Business Incorporation
In order to incorporate a business, it is quite important to select the Method of Incorporation. In Canada, the two types of incorporation are Federal and Provincial / Territorial Incorporation.
In order to incorporate the Business in many jurisdictions, the Company has to incorporate extra-provincially in the desired destination.
Establishment of a suitable Address
A suitable address has to be established for conducting various Business activities. The office has to be set up in accordance with the rules and regulations set by the authorities.
Appointing the Board of Directors
For foreigners looking to establish their business in Canada, it is important to appoint local directors for conducting Business activities.
Obtaining a Business Number
A Business Number (BN) will be issued by the Canada Revenue Agency which plays an important role in the Incorporation of Business Activities.
Assurance on Reliability and Quality
Helpline Group's primary motto is to ensure quality and reliability while ensuring the highest customer satisfaction possible so that our customers become our evangelists. You, as a client, can be assured that your company formation processes are in good hands, and your business will be up and running in no time, adhering to the legal and regulatory requirements of the country.
Legal Structures of the Company in Canada
When you are setting up a company in Canada, there are many factors you should understand. The most important factor is the legal structures of companies that you may choose from. Each business has different needs and unique requirements, in addition to the differences in ownership conditions and controlling requirements. Based on these conditions, each business legal structure may also have different benefits and characteristics. Various legal structures available for companies in Canada are given below.
- Sole Proprietorship
- Partnership Firm
- General Partnership Firm
- Limited Partnership
- Limited Liability Partnership
- Branch Office
- Joint Venture
A Sole Proprietorship is a company owned and operated by a single person. The person who owns the company or the sole proprietor is responsible for the company and its activities. The sole proprietor takes all gains or bears all losses generated by the company. The sole proprietor is responsible for all liabilities of the company. It means, the liabilities of the business can easily be extended towards the personal wealth of the sole proprietorship. While this option is the least expensive and the easiest to start, there are plenty of risks involved. Income from Sole Proprietorship is considered personal income, which is taxed according to taxation rules concerning the repealing laws in Canada. It means, currently, sole proprietors are to pay taxes through T1 income tax. Speak to Helpline Group to understand if this is the best suitable option available for your business model and requirement.
A Partnership Firm is a business set-up involving two or more persons (partners) agreeing to a common term of arrangement or agreement. All parties involved in the partnership shall pool their resources (investments) to start the business. It is possible to start a Partnership Firm between individuals or individuals and other organisations, including trusts, on the basis of mutually agreed contracts. Parties involved in a partnership may share profit and loss, as described in the partnership agreement. There are three types of Partnership Firms in Canada, and it is divided on the basis of the liability levied on partners of the partnership. In most cases, the Partnership Firm is not bound to pay income taxes, but the income from the company is often treated as personal income, and the partners are responsible for filing their own income taxes. Helpline Group can assist you in making a decision concerning the best option suitable for you.
General Partnership Firm
A General Partnership Firm is a partnership firm where the partners of the firm have unlimited liability. Liability incurred by the firm can be extended up to the personal wealth of all partners involved in the business. While the registration is valid for five years, it can be renewed further. Although it is easy to set-up and run a General Partnership Firm in Canada very easily, you shall require professional guidelines and advice to decide whether this is the best choice, as well as in documentation and filing for registration. Speak to Helpline Group for more information on setting up a General Partnership Firm in Canada
A Limited Partnership is another partnership firm where there can be both limited and general partners. A Limited Partnership should have at least one general partner and at least one limited partner. While the general partner has the power to make managerial decisions, the limited partner only contributes capital to the business. However, a general partner in a Limited Partnership shall have unlimited liability towards the business, while a limited partner in a Limited Partnership in Canada is only liable to the extent of his/her investment in the business. Hence, it is important to measure the advantages and issues of forming a Limited Partnership in Canada is very important.
Limited Liability Partnership (LLP)
A Limited Liability Partnership is the most popular form of partnership company in Canada. Although there is the provision for involving general partners in a Limited Liability Partnership in Canada, their liability is limited to an extent. LLPs in Canada are not considered a taxable entity in Canada. Hence, there are no taxation requirements on the profit. However, partners in a Limited Liability Partnership in Canada are required to pay taxes from the income earned from the partnership company (LLP). Even though the LLP structure in Canada is transparent, the partners involved in making losses (e.g. making a decision etc.) and the assets of the company can be at risk in case any liability occurs to the business. However, partners in LLPs are relatively safe in comparison with other options. In addition, there are different laws and conditions concerning operations of LLPs in Canada. For example, LLPs are prevalent in provinces like Ontario and British Columbia, and other provinces may have a different rule or law related to such structures. In Ontario and British Columbia, LLPs are limited to professional practices like lawyers and accountants. Hence, you should speak to Helpline Group consultants regarding your requirements and goals to make the best decision.
Branch offices are legal in Canada. Foreign companies can establish brand offices in Canada with the legal license provided by the Canadian government. Few conditions must be met.
- Branch office should be registered with the province where it shall operate
- Branch office operations and activities may change depending on the province and its conditions
- Permissible business activities for branch offices tend to differ between provinces
- Residential agent or a representative should be hired to conduct business in a branch office
- Apart from security investments, the parent organisation should have interests in real property in the operating province
- Branch offices may benefit from tax relaxations in Canada
Helpline Group can assist you in making sure your business and business model can operate within the permissible terms and activities agreed by the operating province of your choice.
A corporation is a separate legal entity in Canada. A corporation is considered similar to a natural person in Canada. Shareholder liability is very much limited to the extent of their investments in the company. A corporation can have its own name, can take loans, provide loans, and operate on its own. Shareholders gain ownership in the business by buying shares issued in the public share market. Since the incorporation of a corporation can be done either at the federal level or the provincial level, a company must carefully evaluate its requirements. While a federal level incarnation let the corporation trade anywhere in Canada, provincial level incorporation limits its operations to a single province. However, there are benefits and risks associated with each model. Speak to Helpline Group to learn more about incorporating a corporation in Canada. Professional advice is also recommended to learn more about taxation of corporations in Canada.
A joint venture is formed between two companies or two or more people in Canada with a common goal. It means a Joint Venture may come to a conclusion when these goals are met with. However, a Joint Venture is also subjected to other conditions and requirements. A Joint Venture operates on the basis of the conditions and clauses specified in the Memorandum of Association. The rights and responsibilities of the companies involved in a Joint Venture are also based on the agreements and contractual clauses specified in the Memorandum of Association. Joint Venture usually has clear indications and clauses concerning how companies are going to share profit and loss as well. However, Joint Ventures in Canada do not enjoy the same rights of a separate entity.
Since the Canadian government or law do not have a regulation concerning Joint Ventures, its operations and activities are solely based on the agreements or memorandum of association of the joint venture. However, Joint Ventures are required to work under the companies mechanisms existing in each provincial and the country, under the Act of Investment in Canada. Hence, approval is necessary to start a Joint Venture, which may depend on the benefits received by the state. Hence, there are no equal chances when it comes to getting approval for a Joint Venture in each province, as preference may change from province to province in Canada. Speak to Helpline Group to learn more on setting up a joint venture in Canada.
Cooperatives are described as legal incorporation operated and owned by a group of people with a common goal or a requirement. For example, generating employment, selling goods and services, and manufacturing and such can be a common goal under a cooperative. Canadian law permits four types of Cooperatives – consumer cooperative, producer cooperative, worker cooperative and multi-stakeholder. The application, requirements, and legal requirements differ from each other. Each of these has different definitions and governing rules in each province in Canada. Such cooperatives are formed Under the Canada Cooperative Act (Coop Act). Speak to Helpline Group to learn whether the Cooperative Structure satisfied your business goals in Canada.
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Other Factors You Should Consider for Canada Business Formation
Canada has a complex taxation system. Different business structures enjoy a different type of tax benefits, while in some cases, owners are expected to pay taxes from their income or profit. The ongoing corporate tax levied in Canada is 38%. However, there various legal requirements, and concepts that can benefit or affect the business and operations, as well as taxation decisions. Helpline Group is a professionally managed firm to take care of all your corporate tax needs in Canada. We can also help to evaluate the tax requirement and impact on each business type and structure in Canada.
While setting up a business in Canada, it is a mandatory requirement for a foreigner to opt for an appropriate type of visa. While choosing the right type of visa can be confusing, you may consult with Helpline Group at any of our regional offices to learn more about the best possible choices in Canada. Helpline Group has established a global network of offices and operations that specialise in visa applications and services.
Your business model may require importing arrangements to Canada, as per your business requirements. Since importing laws and trade arrangements may differ from country to country, especially the origin country and the destination country in the trade, it is important to factor in such conditions while making a decision on the business structure. A number of basic requirements are present in Canada.
- The importer should register their import-export account
- A legal permit is required to engage in import or export activities in Canada
- Making payments as per existing laws and related duties or tariff arrangements between Canada and the trading country
- Meeting the requirements of the provincial and federal legal and regulatory conditions
- Follow the import and export laws and regulations in other countries involved