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The Differences Between an Provincial (Ontario) Corporation and a Federal (Canada) Corporation

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The Differences Between an Provincial (Ontario) Corporation and a Federal (Canada) Corporation

What is the difference between an Provincial (Ontario) Corporation and a Federal (Canada) Corporation?

Many clients ask, what is the difference between an Provincial (Ontario) Corporation and a Federal (Canada) Corporation? The answer is quite easy – there’s not much difference at all. A Federal Corporation is governed by the Canada Business Corporations Act (CBCA) and an Ontario Corporation is governed by the Ontario Business Corporations Act (OBCA). The two pieces of legislation are almost identical, with very few minor variances. This is because the OBCA was modeled after the CBCA to create uniformity across corporate law in Canada an in our provinces.

Some advantages and disadvantages of choosing the territory in which you incorporate are briefly explained below.

ONTARIO INCORPORATIONFEDERAL INCORPORATION
AdvantagesAdvantages
Some advantages of incorporating under the Ontario Business Corporations Act are:

 

  • Name selection is self-policing
  • Name only needs to be available under Ontario laws
  • Faster incorporation turnaround time (real time available)
  • No government fee for Form 1 filings under the Corporations Information Act (Initial Return, Notice of Change, and Annual Return)
Some advantages of incorporating under the Canada Business Corporations Act are:

 

  • Name decision by government examiners based on availability across Canada
  • Enhanced name protection
  • Increased global recognition of federal charter
  • Ability to register in every province
  • Lower government incorporation fee ($200)
DisadvantagesDisadvantages

Some disadvantages include:

  • Higher government incorporation fee ($350)
Some disadvantages are:

 

  • Finding an available name is more difficult
  • Name decision made by government examiners; difficulty incorporating a similar named corporation, can be stopped by examiners
  • Longer processing time (1- 2 days)
  • Government fees associated with annual filings

 

For more information on the advantages and disadvantages of Provincial (Ontario) Corporation and a Federal (Canada) Corporation and for assistance in selecting your type of corporation, Contact Us to speak with one of our business lawyers.

-Shira Kalfa, BA, JD, Partner and Founder

© Kalfa Law 2018

The above provides information of a general nature only. This does not constitute legal advice. All transactions or circumstances vary, and specified legal advice is required to meet your particular needs. If you have a legal question you should consult with a lawyer.

 

 

 

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