Last Updated on March 24, 2025 by BusinAssist Editorial Team
For entrepreneurs looking to carve their niche in the Canadian market, federal incorporation is a good choice for those looking to operate in multiple provinces and territories.
Incorporation of a federal corporation can be complex especially if you are new to Canadian regulations. This guide will explore how you can seamlessly incorporate a federal corporation in Canada.
What is a federal corporation?
A federal corporation is a business incorporated federally. This is a company that has been registered with the government of Canada and operates anywhere in the country. Unlike provincially registered businesses, federal corporations have extensive name protection, a wider business reach across the country, and greater global recognition.
In other countries, a federal corporation is known as a limited liability company. It is a unique legal entity distinct from directors or company owners. A corporation pays taxes, borrows loans, pays debts, and purchases assets and properties.
Why incorporate a federal corporation in Canada?
Name protection: Federal corporations must obtain a Newly Upgraded Automated Name Search (NUANS) report and submit it to Corporations Canada at the time of incorporation. This gives your business a higher level of company name protection countrywide.
Global recognition: Unlike provincially incorporated businesses that are recognised in a certain province, a federal corporation can operate globally making it easier for the business to be recognised.
Limited liability: A federal corporation is a legal entity that is distinct from the company owners and directors. It offers limited liability to directors, shareholders, and business owners meaning, they will not be held liable for the company’s debts or legal actions. A corporation pays its taxes, borrows debts, pays loans, and purchases items. In case of loan default, creditors can use the company assets to pay back the debts.
Tax advantages: The government offers tax incentives and potential deductions for corporations. Unlike the personal income tax rate, federal corporations may benefit from lower corporate tax rates.
Professional image: A federal corporation enhances the business credibility and professional image. It is perceived as a more stable business than an unincorporated business. This may build trust with your customers, potential investors, and partners.
Raise funds: It is easier to raise funds for a federal corporation than a sole proprietorship. A corporation can raise funds through shares, take a business loan, or access government grants and incentives.
Easier ownership transfer: A corporation can transfer ownership easily by selling shares to investors. This is an easier process of bringing in investors to take over the company and alter the ownership structure.
What documents are required to incorporate a corporation in Canada?
To incorporate a federal corporation, there are documents needed by Corporations Canada. The documents include:
- The proposed name of the business for incorporation
- A designated Canada registered office address
- A NUANS report obtained within the past 90 days
- A detailed description of the business operations
- The names and addresses of all directors & shareholders.
- Identity and proof of address documents for all directors & shareholders
How to incorporate a federal corporation in Canada?
Select company name:
In Canada, a federal corporation can choose a numbered name or a word name. If you choose a numbered name, Corporations Canada will assign your business a unique number such as 97634521. So, the company name will be (97634521 Inc.).
A word name includes letters, symbols, and numbers. The name must be distinctive and not similar to other business names or trademarks. In Canada, you can choose a name in the following languages:
- English only (Servy Consultant Inc.)
- French only (Eluvia Les Bijoux Inc.)
- English and French (separately) (Devine-Les Bijoux Inc.)
- English and French (combined)
The name you choose should have these three components;
Distinctive: The name should be unique and original, setting it apart from other business names.
Descriptive: It should describe the nature of your business or industry.
Legal element: A corporation should have a legal element at the end of the name. (For example: Inc, Ltd, etc)
Make sure you have a NUANS report at the time of the Canada company incorporation. The report ensures the name is distinctive from any other registered entities. NUANS report is not required for numbered names.
Create Articles of Incorporation:
This document should include:
- Your company’s name
- Details about share ownership and transfer restrictions
- The number of directors who will oversee the corporation’s operations
- Any specific limitations or guidelines for your business
- Additional provisions that reflect your company’s distinct goals and objectives
You can make sure that your new business is well-planned and meets all the necessary legal standards by carefully drafting your Articles of Incorporation.
Appoint directors:
It is required by Corporations Canada to appoint at least one director, submit their names and addresses, and also indicate their residency status in Canada. At least 25% of the directors should be Canadian residents for a federal corporation. It’s essential to ensure that all directors fulfill the necessary eligibility requirements.
Additionally, you must file information regarding individuals who have significant control over the corporation, which may include shareholders, directors, or officers.
Establish a registered address:
A federal corporation should maintain a registered address in Canada. Through a Canada virtual office, entrepreneurs can incorporate their business in Canada using a professional business address. The address enhances the credibility of a business giving it a good reputation. You can also better manage your posts using a Canada virtual office service.
Registration:
You can register your Canada business with Corporations Canada either using their service or through a company formation agent. It is always best to rely on professionals when it comes to complex fillings such as federal incorporation. Canada Company incorporation agents like BusinAssist will handle all paperwork and submit them to Corporations Canada on your behalf.
With BusinAssist, you will save money and time. We take care of all documents, you only need to fill up an online form on your laptop, PC, or mobile. Within 1 day, we will make sure all your company documents and details have been submitted to Corporations of Canada, and when the incorporation has been approved, the federal Certificate of Incorporation will be emailed to you.
For more information on incorporating a federal corporation in Canada, contact us at [email protected].
FAQs
Q: Should I incorporate federally or provincially in Canada?
Ans: If you want name protection for your business nationwide and wish to operate in multiple provinces across Canada, you should incorporate a federal corporation. However, keep in mind that at least 25% of the board of directors should be Canadian residents. If you are a non-resident you can opt for provincial incorporation instead of federal.
Q: How to check if a company name is already used in Canada?
Ans: You can use the NUANS (Newly Upgraded Automated Name Search) report to check if the name you have selected is already used in Canada or not. The search has been compared with Canadian databases, registries, trademarks, etc. to easily check for existing companies. Before applying for a NUANS report you should also do your research by checking national databases, registries, etc.
Q: Does federal incorporation protect you personally in Canada?
Ans: Yes, incorporating a federal corporation in Canada protects directors & shareholders in case of debts & bankruptcy since it offers limited liability. A federal corporation is a legal entity that is distinct from the business owners or directors meaning they are not liable for the company’s debts or legal process.
Q: When to incorporate your business in Canada?
Ans: Incorporating a business in Canada depends on several factors such as your business goals, size, situation, and objectives. However, it is best to incorporate your business in Canada when your business earns more than you can spend personally in a year and you are concerned about the liability of your business.
Read Also:
- What Is a NUANS Report? Understanding Its Purpose and When You Need One in Ontario
- Should I Incorporate Federally or Provincially in Canada? A Comprehensive Guide to Choosing the Right Option for Your Business
The BusinAssist Editorial Team has 15+ years of experience writing about small business and company formation in the UK, Canada, and the USA. We simplify complex processes and provide practical insights to help entrepreneurs succeed.