Federal vs. Provincial Incorporation

David van Moorsel

In Canada a corporation can be incorporated federally pursuant to the Canada Business Corporations Act, or provincially, pursuant to provincial corporate legislation, such as the Alberta Business Corporations Act or the Ontario Business Corporations Act. The laws applicable in each jurisdiction are similar, but there are differences.

Federal Incorporation

Federal incorporation is slightly cheaper than provincial incorporation due to the lower government filing fees, however, a federal corporation is also required to extra-provincially register (and carry out annual maintenance) in any province in which it carries on business. This can make federal incorporation more expensive in the long run, since provincial corporations are only required to register in multiple jurisdictions if they carry on business in multiple jurisdictions.

Federal incorporation is typically preferred by businesses that:

  • do business internationally;
  • do business in several different provinces; or
  • want greater name protection and/or recognition, but don’t want to apply for a trademark.

Provincial Incorporation

Provincial incorporation filing fees are more expensive than federal incorporation filing fees, however, a provincially registered corporation will only be required to register in one province if it only carries on business in one province. This typically means lower overall filing fees and less annual maintenance.

Provincial incorporation is typically preferred by businesses that:

  • do most or all of their business within a single province;
  • don’t require greater name protection or recognition, and don’t want to apply for a trademark; or
  • prefer to limit the amount of paperwork required each year.

If you’d like assistance deciding where you should incorporate contact a business lawyer with Twin River Law LLP.

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