How to Incorporate Your Business in Canada: A Complete Guide

Incorporating your business is one of the most common ways to structure a company in Canada. A corporation provides personal liability protection, potential tax advantages, and credibility with customers and financial institutions. Here is your complete guide to getting started.

Federal vs. Provincial Incorporation

In Canada you have two options: incorporate federally under the Canada Business Corporations Act (CBCA) or incorporate provincially under your province's business corporations act. Federal incorporation gives you the right to operate under your corporate name across all provinces and territories, while provincial incorporation limits your name protection to that province. Most small businesses that operate primarily within one province choose provincial incorporation because it is simpler and less expensive.

Step 1: Choose Your Corporate Name

Your corporate name must be unique and distinguishable from other registered businesses. You can search existing business names through the federal NUANS database or your provincial registry. Your name must include a legal element such as “Inc.,” “Corp.,” “Ltd.,” or the full equivalents. Alternatively you can incorporate as a numbered company and register a trade name later.

Step 2: Prepare and File Articles of Incorporation

Articles of incorporation are the foundational documents that create your corporation. They include details like the corporate name, registered office address, share structure, and any restrictions on the business. Filing fees range from approximately $200 federally to varying amounts provincially.

Step 3: Create Corporate Bylaws and a Shareholders Agreement

Bylaws govern how your corporation operates on a day-to-day basis. A shareholders agreement outlines the rights and obligations of each shareholder, how decisions are made, and what happens if a shareholder wants to exit. Having a lawyer draft or review these documents is highly recommended.

Step 4: Register for a Business Number and CRA Accounts

Your Business Number (BN) is your corporation's account number with the Canada Revenue Agency. You will need it for corporate income tax, GST/HST collection if applicable, payroll deductions if you hire employees, and import/export accounts.

Step 5: Set Up Corporate Records

Every Canadian corporation must maintain a corporate minute book containing the articles of incorporation, bylaws, shareholder and director registers, meeting minutes, and share certificates. This is a legal requirement.

Step 6: Register in Other Provinces (If Needed)

If you plan to do business outside the province where you incorporated, you may need to register as an extra-provincial corporation in those provinces.

Get Legal Support for Your Corporation

A Small Business Legal Service Plan connects you with dedicated lawyers who can review your articles of incorporation, draft or review shareholders agreements, and answer questions as your business grows.