Where to incorporate your business
Clients often ask where to incorporate a business. In the US, each state is a jurisdiction available for incorporation. In Canada, you may incorporate federally or in one of the thirteen provincial or territorial jurisdictions.
To make a decision on where to incorporate a business, it is important to ask:
- Where will you carry on business?
- What type of business will do?
- Is name protection a consideration?
- What are the fees and reporting requirements?
It is also important to consider the type of business you will be doing. We assist many clients create operating companies, holding corporations, professional corporations, and personal real estate corporations
If you are doing business in the US, you will likely want to choose a jurisdiction and complete the incorporation requirement for that particular jurisdiction. It is key to consider filing requirements for the specific jurisdiction you choose.
If you are doing business in Canada, there are three principal differences between federal and provincial incorporation: jurisdiction of operation, corporate name protection and cost of incorporation.
Cost of incorporation is also a consideration, although ought not to be determinative. The benefits of incorporation almost always outweigh the costs.
Federally incorporated companies must be incorporated at the federal level and then registered extra-provincially in one or more provinces. Exceptions for extra provincial registration are available in Ontario and Prince Edward Island.
If you want to incorporate a business, you will likely find it easiest to incorporate your business in your home jurisdiction. Generally, you will need an address within the jurisdiction where you carry on business or possibly appoint a representative or agent to do so for you.
A final consideration is residency of a corporation’s directors. Each jurisdiction has its own requirements concerning the residency of a corporation’s directors. Many times the residency requirement for directors help determine where to incorporate a business.
It Canada, British Columbia, Quebec, Prince Edward Island, Nova Scotia and New Brunswick do not have directors’ residency requirements. This is key for foreign individuals and businesses who wish to incorporate in Canada, as they will not have to appoint resident Canadian directors if they incorporate in any of these provinces.
Residency requirements for directors are as follows:
JurisdictionDirector Residency RequirementFederal25% resident Canadian Directors RequiredAlberta25% resident Canadian Directors RequiredBritish ColumbiaNo Canadian Directors RequiredManitoba25% resident Canadian Directors RequiredNew BrunswickNo Canadian Directors RequiredNewfoundland25% resident Canadian Directors RequiredNova ScotiaNo Canadian Directors RequiredOntario25% resident Canadian Directors RequiredPrince Edward IslandNo Canadian Directors RequiredQuebecNo Canadian Directors RequiredSaskatchewan25% resident Canadian Directors Required
Where to incorporate your business will directly influence the success of your business. If you wish to discuss where to incorporate your business with one of our professionals feel free to contact one of our legal professionals.
Conduct Law is a business based law firm with locations in Florida, including Tampa, Orlando and West Palm Beach and Ontario, including Ottawa, Barrhaven, Kanata and Winchester. Our professionals are experienced business lawyers who can help with incorporation and corporate matters, wills, estates, and real estate matters depending on your legal corporate requirements. Feel free to call or write one of our professionals at firstname.lastname@example.org or 1.833.890.8878 for all of your business, commercial, real estate and estate planning needs.
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