Business Registration Insights for Potential Applicants of Visa and Immigration Programs

Business Registration Insights for Potential Applicants of Visa and Immigration Programs

Canada is a wonderland of opportunities for entrepreneurs and investors. Start-up Visas, International Mobility Programs (IMP), and Job Creators’ Work Permits are some examples of business immigration programs.

Registering a business in Canada is the main requirement if you are immigrating to Canada through different business immigration programs. You should start the process of business registration before or after arriving in Canada. Keep reading to know the requirements to register a business in Canada.

Index

  • Main types of Canadian business models
  • Federal and provincial considerations
  • Directors’ residency status
  • Choosing a business name and extension
  • Key considerations while setting up a business in Canada
  • Role of professionals
  • How can we help

Main types of Canadian business models

There are three main types of business models in Canada. Decide on a specific model of business by considering the location and business model.

  • Sole proprietorship business model – The Sole Proprietorship model is suitable for entrepreneurs planning to own and operate their businesses simultaneously. The registration process of a sole proprietorship is straightforward because it is the basic business model. Sole proprietors enjoy freedom from double taxation because there are no separate personal and business taxes. The registration cost is less if you are starting a sole proprietorship business.  However, it’s important to note that when a person is the proprietor of a business, they are solely responsible for any legal liabilities that may arise. This means that if the business faces a lawsuit, the proprietor may risk losing their personal property as well. The bankruptcy of the business will also impact the proprietor’s financial credibility. 
  • Partnership firm –  Though a partnership firm has a few similarities with the sole proprietorship firm, it involves more than one owner. All partners of the partnership firm share the liability of the business. Some partnership firms include partners with limited liabilities. Mutual trust among partners is the main attribute of a partnership business model. 
  • Incorporated business – A business incorporation limits the liability of the owners to the company with a few exceptions. The incorporation model separates the owners from the business. An incorporated business has one or more owners. Despite some tax relief schemes, the owners have to pay double taxes, including personal and business taxes. Unlike other business models, the registration process of the incorporated business is costlier and more complex. 

The business structure depends upon the applicants such as foreign nationals and owners of business groups. An incorporated business is the most suitable choice for immigrant business owners, as several provinces do not provide other options.

Federal and provincial considerations

Registering as a federal enterprise may enable you to operate the business in any province or territory in Canada. Federally registered businesses have the protection of their name across Canada. However, certain provinces have specific conditions for operating federally registered businesses. A knowledgeable financial advisor, tax consultant, or chartered accountant may provide valuable guidance by considering individual business profiles.  

Directors’ residency status

The standard business structure involves directors and shareholders. Directors design the company’s policies acting as the organization’s governing body. They control and oversee the company’s financial progress with the power to hire or fire a CEO and CFO. Company directors should have citizenship or permanent residency status. Canada’s provinces set specific residency requirements for the directors of the company.

A specific percentage of directors must have a permanent residency or citizenship status. A minimum of 25 percent of directors must be Canadian permanent residents for a federally registered company. The same requirement applies to most Canadian provinces. However, the following provinces do not mandate a permanent resident or Canadian citizen on board:

  • British Columbia
  • Prince Edward Island
  • Ontario
  • New Brunswick
  • Nova Scotia
  • Nunavut
  • Quebec
  • Yukon
  • Northwest Territories

Choosing a business name and extension

Choosing a name for the business is unnecessary during the registration process, as one may consider a number for the business. These are numbered companies in the Canadian business jargon. Selection of the company’s name requires the business owner to avoid choosing the name of an existing enterprise. Having similar names can land you in legal trouble. You may choose any or no extension such as Inc, PLC, LTD, or Corp while naming the business.

Key considerations while setting up a business in Canada

Registration for sales tax is crucial, as the business must collect taxes on behalf of the federal and provincial governments. Knowing about federal and provincial tax requirements is crucial while starting an enterprise. Contacting Canada Revenue Agency (CRA)and setting up a payroll account is necessary, as you will hire people to run the business.  

Role of professionals

Navigating business registration and other procedures while starting a business in Canada involves several complexities. Hiring professional tax and business consultants will simplify the business registration process. You will require help from corporate lawyers to create the business entity.

How can we help

We have vast experience in guiding prospective investors and business owners from abroad to set up their new business ventures in Canada. We can help you hire the right professionals to streamline the registration process.

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