Disclaimer: The following is for informational purposes only and does not constitute legal advice. If you require legal assistance regarding cross-border business matters, please consult a qualified lawyer.
Should You Incorporate in Ontario or Federally? A Guide for Canadian Business Owners
Incorporating your business is a major decision, and one of the first choices you’ll face is whether to incorporate federally or provincially. Each option has its advantages, depending on your business structure and long-term goals.
Federal vs. Ontario Incorporation: What’s the Difference?
Federal Incorporation (Canada Business Corporations Act - CBCA)
Provides exclusive name protection across Canada, reducing conflicts with businesses in other provinces.
May be beneficial for businesses that plan to operate in multiple provinces.
Requires extra-provincial registration in the province(s) where you conduct business.
Generally has higher compliance requirements, including annual filings with Corporations Canada.
Ontario Incorporation (Ontario Business Corporations Act - OBCA)
Simpler and more cost-effective for businesses operating primarily in Ontario.
Name protection applies only within Ontario, meaning another business in another province could register the same name.
No need for extra-provincial registration if operating solely in Ontario.
Slightly fewer compliance requirements compared to federal incorporation.
Which One Should You Choose?
If you plan to operate only in Ontario and want a straightforward, lower-cost option, Ontario incorporation may be the right fit.
If you anticipate expanding across Canada or want greater name protection, federal incorporation may be worth considering.
Each business is unique, so it's important to evaluate your specific needs before deciding. If you require guidance, consult a lawyer with expertise in incorporation of businesses to assist with your decision.