Business
Canada — Business: Company Formation
Canada offers a highly supportive and transparent business environment with a robust regulatory framework that welcomes both domestic and foreign entrepreneurs. The country provides several distinct structural pathways for establishing a commercial presence, ranging from simple unincorporated structures to formal corporate entities. Business registration, licensing, and compliance are shared responsibilities split between the federal government and individual provincial or territorial authorities. To facilitate commerce, Canada utilizes a unified Business Number (BN) system administered by the Canada Revenue Agency (CRA), which acts as a single, common identifier for all federal tax, payroll, and import-export accounts.
Key facts
- The federal government and provinces share jurisdiction over business registrations and commercial regulation.
- Canada uses a centralized 9-digit Business Number (BN) to identify commercial entities.
- Foreign nationals are permitted to start businesses in Canada, subject to provincial and immigration laws.
- Businesses must register for a federal GST/HST account if taxable sales exceed $30,000 CAD globally.
- The three primary business structures utilized are sole proprietorships, partnerships, and corporations.
- A physical business address within Canada is generally required to complete registration or incorporation.
- Certain commercial activities require specialized municipal, provincial, or federal operational permits.
Partnerships
A Partnership is an unincorporated business formed when two or more parties carry on business with a view to profit, regulated by provincial partnership acts. Three main types: General Partnerships (GPs, joint and several liability for all partners), Limited Partnerships (LPs, limited partners have capped liability but cannot manage operations), and Limited Liability Partnerships (LLPs, typically restricted to regulated professionals like lawyers and accountants). The partnership itself doesn't pay income tax; partners report allocated shares of profit/loss on individual returns, and the partnership must file an information return (T5013) if it meets size thresholds. Source: Canada Revenue Agency.
Branch and Representative Office
Foreign corporations can establish a Branch Office (a direct extension of the parent, able to trade and hire locally, with the parent bearing full liability, taxed at standard corporate rates plus a possible Branch Tax, must register extra-provincially in each province of operation) or a Representative/Liaison Office (restricted to non-transactional marketing/research activities, cannot generate revenue or negotiate contracts, does not trigger a taxable permanent establishment). Source: Corporations Canada - ISED.
Business Registration
Founders register federally (via Corporations Canada, under the CBCA) or provincially. Federal incorporation requires Articles of Incorporation, a registered head office address, share capital structure, a NUANS name search to confirm a unique corporate name, and a $200 CAD online filing fee; federal corporations must also register extra-provincially in their home province. Registration triggers automatic issuance of a 9-digit Business Number (BN), after which businesses can open CRA program accounts (GST/HST, payroll). Source: Government of Canada - Starting a Business.