Incorporation in Canada

It must not contain sensitive words that imply criminal activity or contradict to the standards of public morality. Words such as “Assurance” “Bank”, “Insurance”, are the subject of licensing.

The name of the company may not create any associations with the governmental bodies, agencies and departments.

The company’s name must not be very similar to existing names on the registrar and it must not contain improper or objectionable words. It must be written in Latin letters and contain abbreviation or words “Société par actions”, ” or ” S.A ” “ ltée.” “Inc” which means limited liability.

Every corporation is required to have a registered office address in Canada, so any legal documents will be sent there. The mailboxes cannot be used as a registered address of the company.

Regarding the directors, the legislation imposes no requirement for them to be locals and there is no requirement regarding the place and frequency of board meetings.

Corporate persons cannot become directors. The directors’ details are not registered on the public record and cannot be accessed by the public.

The appointment of a secretary is not mandatory, but optional.

One shareholder is the minimum required; maximum 50. There’s no requirement for them to be locals and corporate persons can become shareholders. Shareholders are disclosed to the public..

It is mandatory that the corporations hold an Annual General Meeting not later than 6 months from the end of the company’s financial year, but there is no requirement regarding the place of meetings which can be held through electronic communication.

The beneficial owners’ details are registered on any public record and can be accessed by the public.

The owners of a corporation must determine the amount of authorized capital at incorporation and it can be denominated in any currency, though the US Dollar is mostly preferred, and the amount of CAD 71.000 ($50.000USD) is suggested. The authorized capital is the maximum amount of capital that the corporation is authorised by its constitutional documents to draw from its shareholders in exchange of shares issued, or stocks as they are referred in Canada.

Private Limited Corporation must have only registered stocks and the par value of those stocks must be stated at incorporation, however, a Private Limited Corporation may have stocks without par value.  Additionally, it must be stated at incorporation whether the Private Limited Corporation will have other classes of stocks.

No requirement is imposed on minimum paid up capital at incorporation, this means that the owners of Private Limited Corporation are not required to set a deadline as to when such capital must be paid up by the stockholders.

Private Limited Corporation in Canada can be incorporated within 18 days.

Ready-made but unused Private Limited Corporations are available in Canada, in case you are in need of a quicker incorporation process.

There are no substance requirements, in Canada. Basically, it means that the company is not required to have premises and an adequate number of employees, the number of expenditures to support its activity in Canada. In that sense Private Limited Corporation established in Canada must have an address within the territory of Canada that will be registered as a company’s address.

Private Limited Corporation that is incorporated in a Canada is obliged to prepare and file accounting records to the respective authorities. Such records should be kept in the registered office in Canada. The auditing of the accounting records is not obligatory for the Private Company however the shareholders can appoint the auditor on their own initiative.

Federal corporate tax rate in Canada is 16% that is imposed on the income of the Private Limited Corporation. However, each province has its own additional taxation on the corporate level the rate may vary from 11.5% till 16%. Canada is a party of various international trade treaties and has the network of Double Tax Avoidance Agreements as well. The VAT or as it is called in Canada: Goods and Services Tax is 5%. Also, depending on the province where the company is incorporated, it will apply the additional tax on sales that may vary from region to region. The registration of VAT is compulsory for the companies; the turnover of which is CAD 30.000. ($21.300USD).