Business Incorporation

Federal Vs Ontario: Which Incorporation is Best for...

Making your entrepreneurship a legal entity through business incorporation.

Jan. 5, 2022

It is really a tough decision to think about a business structure. You have to invest your money, mind and energy to lead your company. You can make a decision depending on your needs and you capability to handle a certain business. 

If you seek advice from your friends or family, they will give you different suggestions. The final decision is up to you. Just keep in mind the aspects of taxation, cost, and liability issues that are connected to Federal and Ontario Incorporation. Federal Incorporation and Ontario/Provincial Incorporation are two of the important categories of business structure. You can select any one of these depending on the aspect of your business reach. What do your customers want?

 

What is Ontario Incorporation?

Ontario Incorporation is the process in which you run your business within a single province. This incorporation works on the basis of Ontario Business Corporations Act (OBCA). 

Benefits of Ontario Incorporation

Easy mobility of shares

In Ontario Incorporation, there is an advantage of easy transferability of shares between the owner and investors. 

 

Attractive for investors

The benefit of Ontario Incorporation is that it attracts investors due to its limited liability. If any loss occurs, the investor is free from the compensation for that loss.

Protection against personal liability

Ontario Incorporation is quite responsible for all its actions. The debts and liabilities are all held by the Ontario Incorporation.

What is Federal Incorporation?

Federal Incorporation means that you are doing business all across Canada under the same business name. It does not matter if some other company is using your name in a province. Federal Incorporation works on the basis of the Canada Business Corporations Act (CBCA).

Benefits of Federal Incorporation

Recognition at a National level

Federal incorporation paves ways to get recognition on a national level. You get to know and collaborate with different companies all across Canada.

Name Protection

Federal Incorporation demands a strict rule in order to get a name for your company. Once a name is approved, it means it is now protected in the country.

 

Right to run business anywhere in the country

Federal Incorporation assists you to carry out your business anywhere in Canada. The corporate records are maintained, so there is no worry of shifting business anywhere in any province. 

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Differences between the two Incorporations

Cost

In order to incorporate for Ontario Incorporation, it costs you $360.00

To incorporate for Federal Incorporation, it costs you $200.00

Name Protection

An Ontario incorporation gives names protection only within your province where your business is.

Federal incorporation gives you the name protection at a federal level. 

 

Citizenship requirement

The Ontario Incorporation does not demand citizenship requirements. It means that a non-Canadian citizen can also run an Ontario Incorporation.

 

On the contrary, the Federal incorporation has a demand of almost 25% listed directors to be Canadian Citizens or Permanent Residents. 

Processing time

Ontario Incorporation, the processing time takes just a few hours. Your company gets incorporated provincially within a day.

The processing time for both corporations varies slightly. To incorporate for a Federal Incorporation, it takes 1-2 business days to complete your incorporation.

 

Time to take action

If you wish to work within a province, Ontario Incorporation is suitable for your needs. It is up to you how you wish to be in your business world, either confined to a single province, or want to get distinction at federal level. Federal incorporation can be an excellent choice if you desire to get recognition and name protection on a national level for your company.

 

Laila Batool

Executive Journalist

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