Canada

Canada allows for the creation of corporations under either federal or provincial law. By incorporating at the federal level, they can conduct business in any province. It also gives the business protection from having its company name used by another corporation in a different province. Below is a general overview of the process of Federal Incorporation: 

1. Choose a company name. The founders shall decide on a business name, then check if there are similar business names, and if it is available as a domain name or social media username. This can be done using a NUANS report tool, provided by Corporations Canada, the country’s federal corporate regulator. 
2. They shall establish the initial business address of the company and first board of directors. Business must disclose each director’s first name, last name, address, and indicate whether they are a resident Canadian. 
3. The founders shall prepare the articles of association. The articles of association are the founding documents of the company, which define its purpose, share capital, ownership structure, management and other details. Articles of incorporation can be in the official language chosen by the new business. 
4. They shall register the company with Corporations Canada. The fastest and simplest way to submit their incorporation application and pay is through Online Filing Centre of Corporations Canada. 
5. They shall register the new company with Canada Revenue Agency (CRA) for taxation and social contribution purposes and get a business number. 
6. The founders shall register the branch for Goods and Services Tax (GST) with CRA and get a unique GST number, if quarterly turnover exceeds CAD 30K in the last four calendar quarters or in a single calendar quarter. 
7. Open a bank account. They need to open a bank account for the company and deposit the share capital. 
8. Obtain business licenses. Depending on the type of business it is expected to operate, they may need to obtain additional licenses or permits from the relevant authorities. 

It is recommended to seek the assistance of a local lawyer or accountant who can guide you through the process and ensure compliance with all legal requirements. The above steps are general guidelines, and the process of setting up a corporation in Canada can vary depending on the specific circumstances of the business.  

Costs  

There is no statutory minimum share capital requirement for a Canadian corporation, and a corporation may be incorporated with a nominal amount. At least one shareholder is required.

The federal incorporation fee payable to Corporations Canada is approximately CAD 200 (online filing).

Professional fees (legal or accounting) typically range from CAD 500 to CAD 3,000+, depending on complexity.

Additional costs may include NUANS reports (approximately CAD 20–50), corporate records preparation, and business licensing fees. Notarisation is generally not required for standard incorporations.

In practice, the total setup cost typically ranges from CAD 300 to CAD 3,500+, depending on the level of professional support.

Timelines  

Federal incorporation is efficient and can often be completed within 1–2 business days when filed online.

However, the overall setup timeline, including tax registration, banking, and licensing, typically ranges from a few days to 2–3 weeks.

More complex cases, particularly those involving foreign shareholders or regulatory approvals, may extend timelines further.

Closing a corporation in Canada involves a formal dissolution process governed by applicable federal or provincial corporate law. Under the Canada Business Corporations Act, the procedure depends on whether the corporation has outstanding liabilities or has already settled its obligations. Below are some of the key steps and requirements for closing a corporation in Canada: 

1. Hold a General Meeting of Shareholders. The process begins with shareholder approval. A special resolution (typically requiring a two-thirds majority) must be passed authorising the dissolution of the corporation. Where the corporation has not yet discharged its liabilities, the resolution will generally provide for liquidation and dissolution.
2. If the corporation has assets or liabilities, a liquidator may be appointed (by shareholders or the court) to wind up the corporation’s affairs. The liquidator is responsible for settling liabilities, collecting receivables, disposing of assets, and preparing the final accounts. In simpler cases, the directors may effectively perform these functions without formal appointment.
3. Notify Corporations Canada and Canada Revenue Agency about winding down the company. 
4. Settle the company’s obligations. The liquidator will need to settle the company’s obligations, such as paying off creditors, terminating contracts, and disposing of assets. 
5. Prepare a liquidation report. The liquidator will need to prepare a liquidation report, which will outline the financial situation of the company and the steps taken to settle its obligations. 
6. Distribute the remaining assets. After settling all obligations, the remaining assets of the company will be distributed among the shareholders according to their shareholdings. 
7. Deregister the company. Once obligations are settled, the corporation files articles of dissolution with Corporations Canada (for federally incorporated entities) or the relevant provincial authority. Upon acceptance, a certificate of dissolution is issued, and the corporation ceases to exist as a legal entity.

Although the information provided here will assist shareholders in completing the dissolution process, it is not intended to replace legal advice. They shall consider consulting a lawyer or another professional advisor to ensure that the specific needs of their corporation are met. 

Costs

The cost of dissolving a corporation in Canada is generally modest for straightforward cases. Government filing fees for federal dissolution are relatively low (typically around CAD 200 or less).

Professional fees (legal and accounting) typically range from CAD 500 to CAD 2,500+, depending on complexity, particularly where tax filings, asset distributions, or multiple jurisdictions are involved.

Additional costs may arise from tax compliance, final filings, and professional advisory services.

In practice, the total cost for a standard dissolution typically ranges from CAD 700 to CAD 3,000+, excluding any liabilities, disputes, or audits

Timelines

In a straightforward case, where the corporation has no significant liabilities and tax matters are up to date, dissolution can typically be completed within 2 to 4 weeks after filing.

However, the overall process, including tax clearance, final filings, and settlement of obligations, generally takes 1 to 3 months.

More complex cases, particularly those involving assets, liabilities, or multi-jurisdictional registrations, may extend the timeline to 3 to 6 months or longer.

Foreign companies looking to establish a presence in Canada typically choose from a few popular types of subsidiaries, each with distinct advantages and regulatory requirements. The most popular types include: 

• Private Corporation: This is the most common form. It allows foreign companies to establish a separate legal entity with limited liability for its shareholders. It offers flexibility in terms of ownership and is subject to corporate tax rates. 
• Public Corporation: Suitable for companies intending to offer shares to the public. It involves stricter regulatory requirements and disclosure obligations but can be a good option for larger businesses seeking to raise capital. 
• General Partnership: Involves two or more partners who share profits, liabilities, and management responsibilities. It’s less common for foreign companies due to unlimited liability concerns. 
• Limited Partnership: Consists of at least one general partner with unlimited liability and one or more limited partners with liability restricted to their investment. It can be an attractive option for specific ventures or investments. 

Please refer to the relevant part of the text for the details of setting up, dissolving, costs and timelines associated. 

Non-domestic companies may also carry on business activity in Canada by setting up a branch. A branch office will be considered an extension of a local or foreign company in Canada. By incorporating at the federal level, they are able to conduct business in any province.  A branch will have to carry on the same corporate activity as the parent company. A branch’s assets and liabilities are included in the total assets of the foreign-based corporation and it has no share capital. The parent company must register the branch in each Canadian territory if it plans to conduct business in multiple provinces. A branch will bear the same name as the parent company and must appoint a legal representative in Canada in order to deal with the authorities. Branch offices are popular because they enjoy certain tax advantages in Canada. 

Setting up a branch in Canada for a foreign company involves several steps, including compliance with federal and provincial regulations, registration, and other administrative requirements. Below is a detailed overview of the process: 

Costs.  

The costs of setting up a branch in Canada can vary depending on several factors, such as the scope of operations, and the specific requirements and regulations of each province or territory. There is no need for minimum share capital for a branch in Canada. The fee to register such a structure CAD 200, however there may be other significant legal and accounting fees, office rent and other administrative costs associated with business set up.  

Timelines 

Generally, setting up a branch can be done within two or three weeks.  

Closing a branch in Canada for a foreign company involves a series of steps to ensure that the branch is properly dissolved and all legal, financial, and tax obligations are met. Below is a detailed outline of the process: 

1. Decision and Approval: They shall obtain approval from the parent company’s board of directors or shareholders to close the branch. Document this decision formally. 
2. Notify Authorities: They shall inform the relevant federal and provincial authorities about the decision to close the branch. This includes any regulatory bodies and the Canada Revenue Agency (CRA). 
3. Settle Financial Obligations: Pay off any outstanding debts and liabilities, including loans, leases, supplier bills, and employee wages. Notify creditors of the closure and arrange for the settlement of any outstanding accounts. 
4. Close Business Accounts: Close the branch’s bank accounts after ensuring all financial transactions are completed. Cancel business licenses, permits, and any other registrations specific to the business operations. 
5. File Final Tax Returns: They shall file the final tax returns with the CRA and provincial tax authorities. Ensure all payroll source deductions, GST/HST, and other taxes are paid up to the closure date. Request a clearance certificate from the CRA to confirm that all tax liabilities have been settled. 
6. Terminate Contracts: Review and terminate any contracts and agreements, such as leases, service agreements, and supplier contracts. Notify all business partners, clients, and suppliers about the branch closure. 
7. Employee Matters: Comply with employment laws regarding termination, including providing the required notice or pay in lieu of notice. Ensure all final wages, benefits, and severance payments are made. Issue Records of Employment (ROEs) to employees and file the necessary documents with employment authorities. 
8. Dissolution Filings: If registered federally, they shall file for the dissolution of the extra-provincial registration with Corporations Canada. Submit the necessary forms to dissolve the extra-provincial corporation in the province(s) where the branch was registered.  
9. Cancel Business Number (BN): Contact the CRA to cancel the Business Number (BN) and any related program accounts (GST/HST, payroll, etc.). 
10. Document Retention: Retain business records as required by law. In Canada, the CRA requires that records be kept for at least six years from the end of the last tax year they relate to. 
11. Public Notice (if applicable): Publish a notice of the branch closure in a local newspaper or other required public forum, if mandated by provincial laws. 

Costs 

Engaging a legal firm to handle the closure can range from CAD 2,000 to CAD 10,000 or more, depending on the complexity. Hiring accountants to finalize financial statements and tax returns may cost between CAD 1,000 to CAD 5,000. Costs for ensuring all tax matters are settled can range from CAD 500 to CAD 3,000. 

Provincial dissolution filing fees can range from CAD 20 to CAD 200. For example, in Ontario, the fee for filing Form 5 is around CAD 25. While there is no direct fee for requesting a clearance certificate from the CRA, there may be associated costs for preparing the application. 

Depending on the number of employees and their contracts, severance pay and benefits can vary significantly. Publishing closure notices if required can cost between CAD 100 to CAD 500. 

Timelines 

Branch closures can take anywhere from a few months to a year.

Canada does not recognise a representative office as a separate legal structure. Foreign companies may maintain a limited presence for preparatory or auxiliary activities without formal registration, provided they do not “carry on business” in Canada. Where activities exceed this threshold, the foreign company must register provincially as an extra-provincial corporation or establish a subsidiary. Below are the main steps of setting up a representative office in Canada:

1. Define scope of activities. Clearly limit activities to non-commercial functions such as market research, promotion, and liaison. Activities must not constitute “carrying on business” in Canada.
2. Select operating model. Determine how the presence will operate in practice (e.g. through a local employee, independent contractor, or third-party service provider).
3. Ensure immigration and employment compliance. If personnel are engaged in Canada, ensure compliance with immigration requirements and local employment laws.
4. Register for payroll and tax (if applicable). If employees are hired, register with the Canada Revenue Agency to obtain a payroll account and comply with withholding obligations (income tax, CPP, EI).
5. Assess provincial registration requirements. If activities exceed preparatory functions (e.g. entering into contracts or generating revenue), register as an extra-provincial corporation in the relevant province(s).
6. Arrange practical setup. Secure office space (if required), establish internal reporting lines, and consider banking arrangements (noting that opening a bank account without a local entity may be challenging).

Costs 

Costs depend on the structure used. For a non-registered representative presence, costs are minimal and mainly limited to advisory and operational setup (typically CAD 1,000–5,000). If registration as a branch (extra-provincial corporation) is required, total setup costs generally range from CAD 2,000 to CAD 8,000, including legal fees, registration fees, and ongoing compliance.

Timelines 

Timelines are relatively short, with a simple presence established within a few days to 2–3 weeks, while a registered branch typically takes around 2–6 weeks depending on the province, banking, and documentation requirements.

Closing a representative presence in Canada does not involve a formal deregistration process, as Canadian law does not recognise a “representative office” as a separate legal entity. The closure process therefore depends on how the foreign company’s presence was structured in practice.

1. The foreign parent company should adopt an internal resolution approving the closure and formally terminate all local activities. This includes settling all financial obligations, such as leases, service contracts, and outstanding liabilities, and notifying relevant counterparties.
2. If employees were engaged, employment contracts must be terminated in accordance with Canadian labour law, including provision of notice or pay in lieu, settlement of final wages and benefits, and issuance of Records of Employment (ROEs). Any payroll and tax accounts with the Canada Revenue Agency must be closed after filing final returns and remitting all outstanding amounts.
3. Where the foreign company had registered to carry on business in a province (i.e. operated as a branch), a formal withdrawal (extra-provincial licence cancellation) must be filed with the relevant provincial authority. Otherwise, no corporate deregistration is required.
4. Following cessation of activities, bank accounts should be closed, service agreements terminated, and business records retained for the statutory period (generally at least six years).

Costs 

The cost of closing a representative presence in Canada is generally limited to advisory, accounting, and operational wind-down expenses. Legal and professional fees typically range from CAD 1,500 to CAD 6,000+, depending on complexity. Additional costs may arise from employee termination, tax compliance, and contractual settlements. Provincial filing fees apply only if the foreign company had registered as a branch.

Timelines 

The closure process is relatively quick in simple cases and can typically be completed within 2 to 6 weeks where no employees or tax issues are involved. Where payroll, tax filings, or contractual obligations must be settled, timelines generally extend to 1 to 3 months. More complex cases may take 3 to 6 months or longer.

Setting up a joint venture (JV) in Canada for foreign investors involves several steps and considerations to ensure compliance with Canadian laws and to align with the strategic goals of the participating entities. Below is a comprehensive guide to the process:

Costs 

Involving a lawyer experienced in JV agreements is crucial. They will draft the JV agreement outlining the rights, responsibilities, profit-sharing, and dispute resolution mechanisms for both parties. Legal fees can vary depending on the complexity of the agreement, the lawyers’ experience, and the negotiations involved. Expect a range of $5,000 to $20,000 CAD (EUR 3,370 to 13,470) or more. An accountant can advise on tax implications, structure the JV for optimal financial management, and help navigate any registration requirements. Accounting fees depend on the complexity of the JV’s financial structure and the scope of services provided. 

Depending on the chosen JV structure (e.g., corporation, partnership), there might be registration fees with provincial authorities. These fees are typically modest (around $100-$200 CAD, EUR 70 – 140). Obtaining a BN from the Canada Revenue Agency (CRA) is free and essential for most businesses in Canada, including JVs. 

Timelines 

In a best-case scenario, with a straightforward JV structure, a well-defined agreement, and a smooth negotiation process, setting up a JV in Canada could take 2-4 months. However, encountering complexities can significantly extend the timeline, potentially taking 6 months or even longer. 

Closing a joint venture (JV) in Canada involves several steps to ensure that all legal, financial, and operational matters are appropriately addressed. Below is a detailed guide to the process: 

1. Review the Joint Venture Agreement: The investors shall review the joint venture agreement for clauses related to dissolution and termination. This document should outline the process, conditions, and responsibilities of each party in the event of dissolution. Ensure that all parties agree to dissolve the JV according to the terms of the agreement. 
2. Formal Decision to Dissolve: If the JV is incorporated, they shall obtain a resolution from the board of directors or partners formally approving the dissolution. Draft a written agreement to dissolve the JV, signed by all parties involved. 
3. Notify Stakeholders: They shall inform employees about the closure, providing notice as required by employment laws and handling any severance or termination pay. Notify creditors and debtors about the dissolution and settle any outstanding obligations. Communicate with customers and suppliers to manage the cessation of business operations and fulfill any remaining commitments. 
4. Cease Operations: Complete ongoing projects or contracts and cease taking on new business. Ensure that all contractual obligations are met or appropriately terminated. 
5. Settle Financial Matters: Use the JV’s assets to pay off any outstanding debts and liabilities. Collect any outstanding accounts receivable. Sell or dispose of the JV’s assets. Convert these assets into cash to facilitate the settlement of liabilities and distribution of remaining funds. 
6. Distribute Remaining Assets: Distribute any remaining assets or profits among the JV partners according to the terms outlined in the joint venture agreement. If there are losses, allocate them among the partners as per the agreement. 
7. Legal and Administrative Steps: File a notice of dissolution with the relevant provincial or federal authorities. If the JV is incorporated, file the appropriate dissolution documents with Corporations Canada (for federal corporations) or the provincial registry. Cancel business registrations, licenses, and permits with municipal, provincial, and federal authorities. Notify the Canada Revenue Agency (CRA) and close the JV’s business number, GST/HST account, payroll accounts, and any other tax accounts. 
8. Final Tax Returns: File the final tax returns for the JV, including any necessary federal, provincial, and payroll tax returns. Indicate that these are the final returns and that the business is being dissolved. 
9. Notify the Canada Revenue Agency (CRA): Inform the CRA about the dissolution and provide the necessary documentation to close the business number and related accounts. 
10. Record Keeping: Keep detailed records of the dissolution process, including financial statements, tax returns, and communications with stakeholders. Retain these records for the period required by law (typically six years). 
11. Legal and Financial Advice: Engage legal and financial advisors to ensure that all legal, financial, and regulatory obligations are met during the dissolution process. They can provide guidance on specific issues that may arise and ensure compliance with all relevant laws. 

Costs 

Involving a lawyer specializing in JV dissolutions is crucial. Their fees depend on the complexity of the JV agreement, the time involved in settling debts and distributing assets, and the lawyer’s experience. Expect a range of $5,000 to $20,000 CAD (EUR 3,370 to 13,470) or more. An accountant can assist with final tax filings, ensuring accurate settlements with partners and the government. Their fees depend on the complexity of the JV’s finances and the scope of services provided. If the JV’s assets are complex or there are disagreements on their value, an independent valuation expert might be necessary. Valuation costs can vary depending on the type of assets and the chosen professional. 

Timelines 

In an ideal scenario with a straightforward JV structure, a clear dissolution process outlined in the agreement, minimal debts, and readily divisible assets, closing the JV could take 3-6 months. However, if there are complications, it could take significantly longer, potentially extending to a year or even more.

In Canada, there are three different types of partnerships: general partnerships, limited partnerships, and limited liability partnerships (though the last type is not currently available in all provinces). All Canadian provinces recognize two types of partnerships: general and limited partnerships. A partnership is not recognized as a distinct entity for tax purposes. Instead, the partnership’s gains and losses are distributed proportionately to the partners, who are then responsible for paying tax on these sums in their individual tax returns. Therefore, income tax planning is probably one of the main reasons to use any kind of partnership. Because any losses can be transferred to the founding partners and offset against other income, partnerships are frequently utilized as investment vehicles in the restaurant, film, and investing industries. 

1. General Partnership (GP). A general partnership is characterized as a business arrangement with two or more parties who share the company’s profits and liabilities. In all provinces, except for Quebec, a general partnership may be formed without a written declaration of the partnership. Each participant in a general partnership is unlimitedly responsible for the debts and obligations of the firm. A partner in a general partnership can be personally sued for something that happens in the business. 
2. Limited Partnership (LP). This partnership is made up of one or more general partners who have unlimited liability and one or more limited partners who, depending on their investment in the partnership, have limited liability. Limited partnerships are frequently formed with two or more people as limited partners and a corporation as the general partner for liability considerations. Limited partners shall not take part in the management of the partnership, otherwise they risk losing their limited liability. Because of its limited liability feature, a limited partnership option is often chosen for raising money for certain types of business projects. 
3. Limited Liability Partnership (LLP). This form of partnership is available in all provinces in Canada. However, as LLPs are subject to provincial law, the level of protection varies from one province to the next. LLP agreements are governed by specific provincial legislation and, as the name suggests, provide the partners with more liability protection comparing to general partners structure. In most provinces, LLPs are only allowed in high-risk professional activities such as lawyers, accountants, architects, or doctors, where the daily business operations of partners tend to have minimal overlap. 

Setting up a partnership in Canada involves several steps and considerations.  Below is a general overview of the process: 

Costs 

There is typically no mandatory registration required for a partnership on a federal level. However, some provinces might require registration with a nominal fee (around $60-$100 CAD). Obtaining a Business Number from the Canada Revenue Agency (CRA) is free and essential for most businesses in Canada, including partnerships. While not mandatory, having a lawyer draft a partnership agreement is highly recommended. This agreement outlines the rights, responsibilities, profit-sharing, and dispute resolution procedures for the partners. Legal fees can vary depending on the complexity of the agreement and the lawyer’s experience, but typically range from $1,000 to $5,000 CAD. 

Timelines 

Setting up a partnership in Canada can be relatively quick – obtaining a BN can be done online and is usually processed within a few days. The time to draft and finalize a partnership agreement depends on the lawyer’s workload and the complexity of the agreement itself. It could take anywhere from a few weeks to a month or more. 

Closing a partnership in Canada, also known as dissolution, involves several steps to ensure that all legal, financial, and administrative matters are properly handled. Below is a detailed outline of the process: 

1. Review the Partnership Agreement: The partners shall refer to the partnership agreement, which should outline the process for dissolution. This document typically includes terms regarding the conditions under which the partnership can be dissolved, the roles and responsibilities of the partners, and the steps to be followed. 
2. Mutual Consent and Decision: All partners must agree to dissolve the partnership. This decision should be documented in writing and signed by all partners. If required, provide formal notice to all partners about the intention to dissolve the partnership. 
3. Notify Relevant Parties: They shall inform employees about the dissolution and their termination dates, ensuring compliance with employment laws and regulations regarding notice periods and severance. Notify creditors, suppliers, customers, and any other relevant stakeholders about the closure of the partnership. 
4. Cease Operations: Stop taking new business and complete any outstanding work or contractual obligations. 
5. Settle Debts and Obligations: Use partnership assets to pay off all outstanding debts and obligations, including loans, leases, and supplier bills. Collect any outstanding accounts receivable from customers. 
6. Liquidate Assets: Liquidate the partnership’s assets and convert them to cash. This includes selling inventory, equipment, and any other business assets. After settling debts, distribute any remaining assets to the partners according to the partnership agreement or their respective share of ownership. 
7. Cancel Registrations, Licenses, and Permits: Cancel the partnership’s business registration with the provincial or territorial authorities. Cancel any business licenses, permits, and registrations with municipal, provincial, and federal authorities. Close the partnership’s GST/HST account with the Canada Revenue Agency (CRA). 
8. Finalize Financial Matters: File the final partnership income tax return (T5013) with the CRA, indicating that it is the final return. Close payroll accounts and ensure all final payroll taxes and deductions are remitted. Distribute any remaining profits or address losses as per the partnership agreement. 
9. Legal and Administrative Steps: File a notice of dissolution with the relevant provincial or territorial business registry, if required. Ensure all formal dissolution documents are completed and filed as needed. 
10. Notify the CRA: Notify the Canada Revenue Agency of the dissolution and provide any required documentation to close the business number and associated accounts. 
11. Record Keeping: Keep detailed records of the dissolution process, including financial statements, tax returns, and communications with stakeholders. These records should be retained for the period required by law (typically six years). 
12. Legal Advice: It is advisable to consult with legal and financial advisors to ensure all aspects of the dissolution are handled correctly and in compliance with all applicable laws and regulations. 

Costs 

While not mandatory, consulting a lawyer specializing in partnership dissolutions is highly recommended. Their fees can vary depending on the complexity of the partnership agreement, the time involved in settling debts and distributing assets, and the lawyer’s experience. Expect costs to range from $1,000 to $5,000 CAD (EUR 675 to 3,370) or more. An accountant can be helpful for tasks like final tax filings and ensuring all financial obligations are settled correctly. Their fees depend on the complexity of the partnership’s finances and the scope of services provided.  Depending on the partnership agreement and provincial regulations, there might be a requirement to advertise the dissolution in a local newspaper or gazette. These advertising costs are usually minimal. 

Timelines 

In an ideal scenario with a straightforward partnership structure, minimal debts, and a clear agreement, closing the partnership could take 2-3 months. However, if there are complications, it could take significantly longer, potentially extending to several months or even a year.