The merits of incorporation vary by province, and a proper comparison can only be made province by province. In this section, we are comparing Ontario incorporations and Canadian federal incorporations, from the perspective of an Ontario business. We begin with a brief overview, then go into greater detail on selected topics.
|Name Selection||Almost any name, except an exact match, will be registered.||Has the most stringent test before granting the right to use a name.|
|Name Protection||Very little name protection provided.||There is very little name protection, but more than a provincial incorporation.|
|Name Use||You have the right to carry on business in Ontario under your corporate name. You can also apply to carry on business in other provinces under your corporate name (see below).||You have the right to carry on business anywhere in Canada under your corporate name (although registration of the name may be required for each province and/or territory — see below).|
|Registered Office||Must be in Ontario||Must be in Canada|
|Business Number / HST||Must be applied for separately after incorporation.||Automically assigned upon incorporation.|
|Initial Cost||Government charge of $300 for efiling of incorporation.||Government charge of $200 for efiling of incorporation.|
|Annual Filing Fee||No charge for annual filings||There is a charge of $20 for the online annual filing|
|Prestige||Some people think that being ‘federally incorporated’ is more prestigious.|
Extra-Provincial Licences & Name Registration – Federal Corporations
In general, a federal corporation is entitled to carry on business anywhere in Canada under its name, subject only to the licensing and registration requirements (if any) of the province where business is carried on. However, if the federal corporation has its registered office in Ontario or if it carries on business in Ontario, then it must file certain corporate information with the Ontario government regularly. If the corporation uses a name other than its corporate name, this must be registered as well, under the Business Names Act. The Ontario government charges $60-80 for a five-year registration.
Extra-Provincial Licences & Name Registration – Ontario Corporations
In general, an Ontario corporation is entitled to carry on business in Ontario under its corporate name. An Ontario corporation doing business in another province generally requires an extra-provincial licence, as registration of your corporation is mandatory in the province where you do business. If you are not already registered, your corporation must do so within 60 days of commencing business in Ontario.
If the corporation uses a name other than its corporate name, this name must be registered under the Business Names Act. The Ontario government charges $60-80 for a five year registration.
Use of Corporate Name
If you are an Ontario corporation, you are entitled to carry on business under your corporate name in Ontario without registering that name. If you do business outside Ontario, you are generally required to register your name in that province. Please note that your request to do business under that name may be refused.
If you are a federal corporation, you are entitled to use your corporate name in any province in Canada. However, you may still be required to meet other provincial requirements, dealing with such matters as registration, taxation and reporting.
An Ontario corporation is required to file a combined Corporation Tax and Annual Return every year. This includes the corporate information on directors, officers, etc. There is no charge for this filing. A federal corporation must annually file a Corporation Tax Return and a Corporate Information Return — two separate documents. The fee for the Corporate Information Return is $20 if filed online and $40 if filed through other means. A federal corporation based in Ontario must also annually file with the Ontario government. For most small businesses, this filing is very simple. There is no charge for this Ontario filing.
Changing an Ontario Corporation into a Federal Incorporation & Vice Versa
You must apply to both the federal and provincial governments for approvals, in what is often a long and expensive process. Together, the two levels of government charge around $600 for fees alone. If you are considering this possibility, please contact us for a better idea of the money and time involved.