Corporations can be created under federal legislation or provincial legislation. Most people who need to incorporate a company will create a corporation under the The Business Corporations Act of Saskatchewan ... or the applicable legislation in their own province. It often is the simplest for them if they will only be carrying on business in the home province. However, there are times when it may be of advantage to create a corporation under the Business Corporations Act of Canada ... a Canada Corporation.
If you are only intending to carry on business in the province where you live, then unless Canada wide name protection is important, there probably is little advantage in 99% of cases to be a Canada Corporation. You would probably be best served being a Saskatchewan corporation.
When a Canada Corporation may be UsefulAbility to work in all provinces
Better name protection across Canada instead of only in the home province
More options where your registered office can be located, minute book kept and annual meetings held. You may live in Saskatchewan but have a business based in British Columbia. BC legislation requires you to have a registered office and keep your minute book in BC. A Canada Corporation give you more flexibility.
Some provinces have articles of incorporation that are different in concept, which leads to confusion and departs from standardizing of the way a company is set up. Saskatchewan and Alberta, for example follow the Canada model with only a few subtle differences. BC articles, however, are quite different.
If you have a BC and a Saskatchewan corporation and later want to amalgamate them, you will need to move one to the other province first so they are of the same jurisdiction. If you start with 2 Canada Corporations ... or make them both Canada Corporations, then you can amalgamate them.
Annual return charges by the Canada Corporations office are less than the other provinces I have seen.
Saskatchewan, like Canada, only requires that 25% of a corporation's directors be Canadian residents. Some other provinces require 50%. If some of your directors do not live in Canada, then this may be of interest. Also, if a person is only living here, for example, on a work permit, they are not considered to be a Canadian resident for this purpose. Also, someone who immigrated to Canada and could have but did not become a Canadian citizen for 1 year after they were eligible to do so is considered to be a non-resident for this test ... even though they may still be a Canadian resident for other purposes.
When a Canada Corporation may be InconvenientYou must file an annual return with the Canada Corporations office. Except for Ontario, you must also register the company in the province where you want to carry on business and file annual returns there as well. For example, if you are only carrying on business in Saskatchewan, a Canada Corporation would still need to extra-provincially register in Saskatchewan and then file federal and provincial annual returns each year. This duplicates some costs.
If you are a Canada Corporation registered in Ottawa plus extra-provincially registered in Saskatchewan, if you amalgamate, you need to register the amalgamation in Ottawa plus again in Saskatchewan. Again, there is some doubling of work and costs involved.
No Advantage in Most Cases
Most small businesses only operate in one province. If you live in Saskatchewan and your business is based here, then unless you need Canada wide name protection for your company, you may only be incurring extra cost to be a Canada Corporation. There is probably no advantage for you in that case ... again, unless you need to protect your corporate name across Canada. If that is your only concern and you are really trying to protect a shortened version of your name such as "McDonalds" instead of the full length corporate name such as "McDonalds Restaurants of Canada Inc.", you may also be more interested in a trademark of your name and your business logo. Be aware though that there are limitations on what types of words or phrases you can trademark.
If you need a Canada Corporation, feel free to contact me.
Notice: The information on this website is general in
nature only. It relates to Saskatchewan, Canada and may not be
applicable in your jurisdiction. It does not constitute legal
advice to you and no solicitor client relationship will be established.
You should seek specific legal advice regarding your circumstances
from a lawyer entitled to practise law in your jurisdiction.
www.rickcarlson.com | Fri, 20 Jul 2018 17:05:29 CDT1