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Incorporating in Canada: Federal vs. Provincial – What’s the Difference?

When incorporating a business in Canada, one of the first questions you’ll face is: Should I incorporate federally or provincially? While both structures provide strong legal protections under the Canada Business Corporations Act (CBCA) or your province’s equivalent (such as Ontario’s OBCA), there are important differences that can impact your business’s legal name, expansion plans, privacy, and compliance obligations. In this guide, we’ll compare federal vs. provincial incorporation in Canada, highlighting the pros and cons of each option to help you make an informed choice.

1. Business Scope: National vs. Provincial Reach

Federal incorporation gives you the right to operate under the same legal name across Canada. Provincial incorporation limits name protection to the province where you incorporate. Even federally incorporated businesses must register extra-provincially in each province where they do business (e.g., hire employees, open offices). In Ontario, this registration is free for federal corporations, but fees apply in other provinces.
  • Choose federal if: You plan to grow across provinces or want a consistent nationwide brand.
  • Choose provincial if: You’ll primarily operate in one province.

2. Business Name Approval Process

Federal corporations must pass a strict name approval process. A federal examiner will check for name conflicts across Canada. Ontario corporations face a more lenient process. As long as your name is not identical to an existing business, you can proceed. Tip: A NUANS report is required for both federal and Ontario incorporations when using a custom name.
  • Choose federal if: You want exclusive rights to a name across Canada.
  • Choose provincial if: You want a faster, more flexible approval process and are okay with name overlap risks.

3. Director Residency Requirements

Federal corporations: At least 25% of directors must be Canadian residents. If fewer than four directors, at least one must reside in Canada. Ontario corporations: No residency requirement—all directors can be non-residents.
  • Choose provincial if: Your business is owned or managed by non-residents.

4. Ownership Disclosure and Privacy

As of January 2024, federal corporations must file a publicly accessible Individuals with Significant Control (ISC) registry. This includes individuals who own or control 25% or more of the company. Ontario corporations must keep a private transparency register, but it is not public.
  • Choose federal if: Transparency is important or required for your industry.
  • Choose provincial if: You prefer privacy for shareholders and beneficial owners.

5. Incorporation Costs and Government Fees

Type Federal Ontario
Government Fee $200 $300
NUANS Report ~$50 ~$50
Numbered Company No NUANS required No NUANS required

6. Speed and Processing Times

Federal incorporation: Typically 2–3 business days. Ontario incorporation: Often same day, especially for numbered companies.
  • Choose provincial if: You need a quick setup.
  • Choose federal if: You’re okay waiting a few days in exchange for name protection.

7. Annual Return Filing Requirements

Requirement Federal (CBCA) Ontario (OBCA)
Filing Deadline Within 60 days of incorporation anniversary Within 6 months of fiscal year-end
Penalty Possible dissolution for failure to file Possible dissolution for failure to file

Quick Summary: Federal vs. Provincial Incorporation

Factor Federal Ontario (Provincial)
Name Protection Nationwide Province only
Director Residency 25% Canadian residents No residency requirement
Public Ownership Disclosure Yes (ISC registry) No
Speed 2–3 days Same day
Cost $200 + NUANS $300 + NUANS
Extra-Provincial Registration Required in each province Only required if expanding outside province

Conclusion

Both federal and provincial incorporation offer solid legal protection and access to limited liability. The best option depends on your growth plans, privacy preferences, and how widely you intend to operate. Federal incorporation offers broader reach and name protection, while provincial incorporation may offer greater privacy and flexibility for local businesses. At Blueprint Law, we help startups and small businesses incorporate with clarity and confidence—whether federally or provincially.

Not sure which incorporation route is right for your business?

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