register a foreign company in Canada
23 Oct 2013

Establish a Foreign Business in Canada (Ontario)

by | posted in: Extra-Provincial Registration, Foreign Business in Canada, Ontario, Ontario Extra-Provincial Corporations Act | 0

A Foreign business, incorporated in any country outside of Canada, may register to carry on business in Ontario provided it follows the requirements of the Extra-Provincial Corporations Act (Ontario).

Toronto, is the capital city of Ontario, Canada and it is the largest city in Canada. It is, therefore, a popular place for foreign companies to set up business.

 

Registration Requirements for Foreign Companies pursuant to the Ontario Extra-Provincial Registration Act

Below are the things to consider before registering a foreign business in Canada along with the requirements under the Ontario Extra-Provincial Registration Act which must be considered before a foreign company starts the process to register to conduct business in Canada.

 

What Constitutes a Foreign Business Operating in Ontario

The Extra-Provincial Corporations Act (Ontario) governs a foreign business carrying on and operating in Ontario.

The Act defines carrying on business in Ontario if a company:

  1. has a resident agent, representative, warehouse, office or place where it carries on its business in Ontario
  2. holds an interest, otherwise than by way of security, in real property situate in Ontario, or
  3. otherwise carries on its business in Ontario.

 

What Does Not Constitute Carrying on Business in Ontario

The Extra-Provincial Corporations Act indicates that it does not constitute carrying on business in Ontario if a company

  1. takes orders for or buys or sells goods, wares and merchandise, or
  2. offers or sells services of any type, by use of travellers or through advertising or correspondence.

 

What Documents are Required in Order to Register in Ontario

Ontario NUANS– A foreign business must have its name pre-cleared for use in Ontario by providing the Ontario government with an Ontario NUANS.  An Ontario NUANS report provides the government with confirmation that your name is available.  A registered NUANS search house specialist must pre-clear your name before it obtains your NUANS report.

If the name is not available for use the company may conduct business in Ontario under a business name.

Appointment of Agent for Service – The foreign company must have a representative, who lives in Ontario, who will act as agent for service and receive correspondence on behalf of the company.  This is sometimes not possible for a foreign company, however, there are individuals and/or companies that will act as agent for service for an annual fee.

Certificate of Status – The foreign company is going to have to provide a Certificate of Status from its home jurisdiction.  This certificate will need to indicate:

  1. The name of the corporation
  2. Date of incorporation/amalgamation
  3. Jurisidiction in which the company was incorporated
  4. Confirm the company is valid and subsisting

These certificates are requested from the government pursuant to which the company was incorporated.  Not all jurisdictions in every country will provide a certificate of status that show all of this information.  In a case where it is not possible to obtain a complete certificate of status, a legal opinion from a solicitor in the company’s home jurisdiction will be accepted.

 

Licence Issued to a Foreign Company Upon Registration

Once registered the foreign company is provided with an Ontario Extra-Provincial Licence.

 

Timing of Foreign Registration in Ontario

Once the application has been submitted it will take up to 10 days for the license to be processed.

 

What Legal Requirements Must be Considered Subsequent to Registration

Federal Tax Return filing requirement – The Canada Revenue Agency governs the collection of taxes in Canada.   All companies registered in Canada, including foreign companies registered in Canada, must pay taxes. For to the more information about the requirements refer to: international and non-resident taxes.

Ontario Annual Return filing requirement – The Ontario Corporations Information Act provides all foreign companies registered in Ontario must file an annual return filing each year with the Ministry of Government Services.

Initial Return and Notice of Change filing – The Ontario Corporations Information Act also provides that subsequent to registration (within 60 days) the foreign corporation must file an Initial Return with the Ministry of Government Services.  The service that registers your company should also file the Initial Return. Be sure to confirm this upon registration.

The Initial Return outlines the address information, chief officer located in Ontario and the agent for service and its address.  If the information changes a Notice of Change is expected to be filed within 15 days.

Federal Business Number – Foreign companies which are registered in Ontario will be required to obtain a Federal Business Number.  Further, there are certain accounts that may need to be opened under that Federal Business Number, i.e. (a) HST account, (b) Payroll account, or (c) Import/Export Account.

  1. HST Account – If the foreign company’s worldwide profits are $30,000 or more the company will be required to collect a 13% tax called Harmonized Sales Tax on all sales in Canada;
  2. Payroll Account – If the foreign company has employees in Canada it will be required to open a payroll account; and[margin_5t][margin_5t]
  3. Import/Export Account – If the foreign company intends to import/or export goods it will require an Import/Export Account.

For more information about the accounts refer to Federal Business Number.

 

Other Considerations

Since some companies wish to conduct business in Canada but will not in the beginning have someone living in Canada, it is sometimes beneficial to have a remote phone service and mail pickup. These services are available for those seeking them.

If you require further information about foreign registration in Canada feel free to contact Resources for Canadian Business Owners.

Ontario Extra-Provincial Licence for foreign companies registered in Canada

 

23 Oct 2013

Alberta NUANS Search

by | posted in: AB Business Corporations Act, Alberta, Incorporation, Incorporation in Alberta, Name Granting for New Businesses | 0

An Alberta NUANS Search is required when incorporating an Alberta company.   The Alberta NUANS search report is used by the Alberta government to confirm that your proposed name is available for use.

The Alberta NUANS Search will show all business names registered in Alberta which are similar to your proposed name and also all names registered in all of the other provinces and territories in Canada which may be a conflict to your proposed Alberta name.

The Alberta NUANS Search Report will also show similar named trademarks that have been registered. [margin_25t]

Preliminary Name Search Prior to Ordering Alberta NUANS Search

Prior to obtaining a NUANS Search for Alberta it is advantageous to perform a preliminary name search.  If you were to pick a name and order the Alberta NUANS Search, without the preliminary name searches, you would not know in advance if that name is available.

Having in hand a NUANS Search for Alberta is no guarantee that your name will be accepted.  If an exact name is showing on the Alberta NUANS search, being a name already used to register another company, your request for use of that name will be rejected.

The only way you will know if there is an exact name already registered for the proposed name is by having preliminary name searches done.  If your Alberta NUANS search is rejected you will need to start over and obtain another Alberta NUANS search.  Preliminary name searches help to prevent this happening.

 

Alberta NUANS Search Report
Nuans reports to register Canadian companies.

Alberta is more lenient with name approval than other provinces.  For instance, if you wish to register Joe Clothing Store Inc. and there is a company already registered as Joe Clothing Sales Store Inc., the Alberta government will allow you to register the name Joe Clothing Store Inc. and your Alberta NUANS search will be accepted by them.   This does not mean you should use that name.

This would be a clear conflict and the owners of Joe Clothing Sales Store Inc. would not be too happy to see another company registered with such a similar name.  Legal action could be taken and you may need to change your company’s name.

When you have a search house perform preliminary name searches prior to ordering your Alberta NUANS Search 90% of any conflicts will come to light and you can then choose another name for your Alberta company if the name is not available.  You should be aware that the preliminary name searches do not pick up all conflicts and there is a slight chance there may be additional conflicts showing on the full NUANS search for Alberta but performing preliminary name searches does assist greatly.

 

federal corporate search
23 Oct 2013

Federal Corporate Search

by | posted in: Canada Business Corporations Act, Due Diligence, Federal, Searches for Info About Businesses | 0

A Federal Corporate Search provides a summary of the public record for a Canadian federal company.   If you know how to read the record you will be able to ascertain a lot of information about a federal company.  Below is an outline of the information on the public record along with some additional information:

 

 Corporate Name History

The current and previous names of the company will be listed.  As well, the federal corporate search will let you know the time period in which each name was used.

 

Registered Office Address

A federal company can have its registered office in any province or territory in Canada.  The public record will show this address.  The Canada Business Corporations Act, which governs federal share companies, requires that a change of address be reflected on the public record within 15 days.  Frequently address changes are not updated that quickly.

 

Date of Formation and Federal Corporation Number

The date of incorporation, date of amalgamation or date of continuance will be shown on the record.  Every federal company is assigned a federal corporation number and this number will be shown on the federal corporate search.

 

Federal Business Number

The Federal Business Number is assigned by Revenue Canada Agency.  This is the number that goes on the corporate tax return.  The federal jurisdiction is the only jurisdiction that adds the Federal Business Number of the federal company onto the public register.  Anyone requesting a federal corporate search will be able to obtain this number.

 

Directors

The names of the directors will be shown on the public record.  The personal addresses or the addresses for service will not be shown.

A corporate search house can ascertain these addresses for you as part of the federal corporate search process if you ask them to do a further search.  If you require these addresses be sure to advise the search house in advance that you need this information.

The record also shows how many directors are currently authorized by the articles.  Frequently there will be a range from a minimum of 1 to a maximum number, usually 10.

 

Annual Filings

This section of the corporate search is very important.   Every federal company must file a federal annual report within two months of the anniversary date of its incorporation.

The corporate record provides you with the anniversary date and the time period in which the annual filing must be done.  This is called the Annual Filing Period.

If this annual filing is not done within the Annual Filing Period the company is considered not to be in good standing and a Certificate of Compliance (sometimes called a Certificate of Status) will not favourable.

If the federal annual filing is not done for three years the company will be dissolved.  If this happens, the company will need to be revived in order to continue conducting business.

Accountants frequently do these filings on behalf of their clients but it is up to the owner of the federal company to ensure these filings are done each year.

Federal annual filings are a requirement of Corporations Canada, the branch of the federal government which handles company matters.  Federal Certificates of Compliance are frequently required by banks, solicitors, suppliers, etc.

It is therefore important to check your corporate record upon occasion to be sure all of these filings are up-to-date.

Do not mistake these filings for federal tax return filings required pursuant to the Income Tax Act and Revenue Canada Agency.  The federal annual filings are not connected to the federal tax return filings but both must be filed within the appropriate deadlines.

If the federal tax returns are not filed for a number of years the company will be dissolved.  It is not possible to ascertain from a federal corporate search, whether the company is up-to-date in its tax filings, however, if the company has been dissolved for non-filing of tax returns then it is possible this was the reason why unless the search indicates “voluntary dissolution”.

A voluntary dissolution occurs when a company wishes to go out of business.   The federal company search will let you know if the company has been dissolved.

 

Governing Statute

Federal companies can be incorporated pursuant to different federal statutes.  The governing statute for the company will also be listed on the federal corporate search.

 

Corporate History of Filings of Articles

A federal corporate search will provide a list of all of the articles filed on behalf of the company.  It will start with the Certificate of Incorporation and then list all amendments to the Certificate of Incorporation and the date on which the Articles of Amendment were filed.  If the company has been dissolved and then revived, those dates will also be listed.

It is easy to get copies of the articles of a federal company.

The corporate history will also indicate whether the company is an amalgamated company and what the pre-amalgamated companies are.  When two companies amalgamate (join together) this is called an amalgamation and a new company is formed.

The federal government will provide you with the corporate numbers of the companies that joined so that you may search those records if you wish.  The companies that joined are called the pre-amalgamated companies.

The federal government will also let you know if the company was previously incorporated in another jurisdiction and then continued (i.e. moved) from that province or territory to the federal jurisdiction.  This is called a continuance.

 

Shareholders

You cannot ascertain the shareholders of a federal company by ordering a federal corporate search.  The shareholders of a federal company are considered private information that is not put on the public record.

 

Type of Company

There are three classifications of federal companies:

  • Non-distributing corporations with 50 or fewer shareholders – This is a privately owned company that does not sell shares to the public.
  • Non-distributing corporations with more than 50 shareholders – This is a company that is in the process of becoming public and has issued shares through private placements in order to obtain the funds to go public.
  • Distributing corporation – This is a public company that sells shares to the public.

 

Operating Trade Names

If a federal company is carrying on business under an operating trade name, the federal corporate search will not show this.  In order to determine any trade names being used by the company you would need to search the provincial or territorial jurisdiction in which the company’s registered office is located.  Operating trade names are a provincial and territorial statute requirement.  If a federal company operates in a province under a name other than its own, it should register that name in the Canadian jurisdiction.

An operating trade name search or business name search can be done to find out more information about operating names being used on behalf of the company.