Deciding how to incorporate in Canada is mostly one early choice: federal or provincial. Every new Canadian corporation is created under one of two kinds of statute, the federal Canada Business Corporations Act (CBCA) or one of the provincial or territorial business corporations acts. Both produce a valid, separate legal entity that can sign contracts, own property, and limit shareholder liability. The practical differences show up in name protection, where you can operate, how much paperwork you file each year, and how much the whole thing costs.
What federal incorporation actually gives you
A federal corporation is created under the CBCA and administered by Corporations Canada. Its most distinctive feature is national name protection: the proposed name is checked across every province and territory through a NUANS search, and once approved, no other federal corporation can use a confusingly similar name anywhere in the country.
Federal incorporation does not, however, exempt the corporation from provincial rules. If a federal corporation carries on business in a province (has an office, employees, or a physical presence there), it must register extra-provincially in that province and pay the associated fee. A federal corporation operating in three provinces effectively maintains four registrations: one federal plus one in each province.
What provincial incorporation gives you
A provincial corporation is created under the business corporations act of a specific province (e.g., Ontario's OBCA, Alberta's ABCA). The corporation is automatically authorized to carry on business throughout that province. Name protection, however, is limited to that province; a business in another province could, in principle, register a similar name there.
If a provincial corporation later expands into other provinces, it registers extra-provincially in each one, similar to how a federal corporation would. The difference is that it lacks the country-wide name reservation a federal corporation enjoys from day one.
Side-by-side comparison
| Federal (CBCA) | Provincial | |
|---|---|---|
| Name protection | Nationwide | Within the incorporating province |
| NUANS name search | Mandatory | Required in ON/AB; optional or province-specific elsewhere |
| Government filing fee | Approximately $200 online | Roughly $300–$360 depending on province |
| Operating in multiple provinces | Needs extra-provincial registration in each province | Needs extra-provincial registration in each province |
| Annual return | Filed with Corporations Canada every year | Filed with the province every year |
| Director residency | No Canadian-resident director requirement (as of 2022) | Varies; Ontario removed its requirement in 2021 |
How to choose
The decision usually comes down to three questions. First, how unique is your business name, and how important is nationwide protection? If the name is core to your brand and you expect to operate in more than one province, federal incorporation buys you certainty. Second, where will you actually carry on business? If the answer is "one province, probably forever," the simpler provincial route may be enough. Third, how much ongoing administration are you willing to absorb? A federal corporation that operates in three provinces files four annual returns.
How to incorporate, step by step
Whichever jurisdiction you choose, the mechanics of how to incorporate in Canada are similar:
- Choose your name, or take a numbered corporation to skip the name search. A named corporation needs a NUANS report to confirm the name is available and not confusingly similar to an existing one.
- File your articles of incorporation. These set out your corporation's basic structure, including its share classes.
- Set your share structure. This is more important than it looks: it determines who owns what, how profits can be paid out, and how you can bring in partners or investors later.
- Name your directors and set your registered office address.
- Get your CRA business number and open the tax accounts you need (corporate income tax, GST/HST, payroll).
- Start your minute book, the corporation's ongoing legal record of its decisions.
Your next step
Once you've decided on the jurisdiction, the rest of incorporating is largely the same: choose a name (or opt for a numbered corporation), draft articles, set your share structure, appoint directors, file, and receive your certificate of incorporation. Korporex files both federal and Ontario incorporations online, including the NUANS name search, the articles, and the share structure setup, and delivers your documents within 24 hours.