Company Formation in Canada

A partnership is a business created between two or more people agreeing on the same terms and conditions to start a business. In this business, both or all the parties pool their own resources to operate the business. A partnership can be formed between individuals or corporations or trusts on mutual agreement basis. In a partnership firm, all the parties will share equal liabilities and profit, until and unless specified in the agreement. A partnership deed is formed on the basis of the terms agreed between the parties.

In Canada, there are three types of partnership firms; this division is done on the basis of liability of the partners. Helpline Group can assist you to follow your decision and can complete formalities to incorporate your business accordingly. Generally, the decision of choosing the form of business partnership is influenced by the tax charged on the income earned by the partner. All the partners are supposed to file the income tax return by themselves; a partnership firm is not bound to do so. In some cases, a partnership firm is asked to file the income tax return but in this case, also partners are not relieved from paying tax.

A general partnership has two or more person to transact in a business with a common view. In this form of partnership, all the partners are supposed to perform their part of duties, as per the agreement formed between them that means all the partners are actively engaged in this business. Until and unless specified in the agreement formed between the partners, all the partners have the same business rights, same participation in decision-making process, same profit share and share equal liability also. A general partnership company formation in Canada is quite easy to establish and liquidate also, but it is not a child’s play to deal with legal complexities. Helpline group can guide and assist you in starting a business in Canada through the least possible paperwork with full exploitation of time.

Registration of this business form remains in existence for 5 years after which it has to be renewed. Registering a partnership firm in Canada gets quite easier and faster while working with Helpline Group, we can get all the paperwork done for registration and also incorporate the firm completed within a few days. The major drawback in this partnership form is that all the partners in the business have unlimited liability to the extent of their personal wealth. Helpline Group’s experts can Canada will provide all related information about the business. In Canada, general partnership laws are highly influenced by the laws of the province or territory under which that partnership business comes.

A Limited Partnership must have at least one general partner and can also have more general partners, who bear unlimited liability on their own shoulders. And other partners are limited partners or at least one partner should be a limited partner with limited liability. This majorly depends on the contribution given by the partners in the business. It is usually found that due to that factor of liability, Limited Partnerships are formed with a corporation, working as a general partner with other individuals working as limited partners. In Canada, a limited partner is also known as a silent partner, who just makes financial contributions in the business, his opinions about the business might be taken in the decision-making process but he himself cannot make any business decision.

In case, a limited partner takes part in decision making then he loses his title of limited partner and will be treated as other general partners of the firm. In Canada, it is often found that a limited partner is used just as a tool for raising money. Helpline consultants in Canada can guide you and provide you with all information regarding the legal issues in this business form, we can assist you in dealing with all business paperwork to make your agreement strong for a company set up in Canada.

Limited Liability Partnership is the most popular form of company formation in Canada, through which a number of investments are made for international trade in Canada. Limited Liability Partnership (LLP) is a form of a general partnership under which liability of a general partner is also limited to an extent. General partners cannot skip from their liabilities but get safe to an extent. There are minimum 2 numbers of partners in this business structure but there is no maximum limit, and a company can also become a partner in an LLP firm. This business form is not considered as a taxable entity in Canada, thus, you are not supposed to pay any corporate tax on the profit earned. LLP is treated as a transparent company for charging tax which makes the partners liable to pay the tax from the income earned by them separately. In Limited Liability Partnership, if something goes wrong then the partnership firm can be held liable and the assets of the partner involved in the loss of the company will be at risk, thus, assets of other partners are safe.

In Canada, every province has its own rules for governing business in a particular territory and LLP is a new business form emerged in few areas of Canada, such as in Ontario and British Columbia this business structure is in practice. LLP is comparatively new in British Columbia (BC) as compared to Ontario, in BC any partnership structure can be converted into LLP or a fresh LLP can be established. Due to provincial differences in business operation LLP legislation can be enjoyed all type of business form in British Columbia but in Ontario and other provinces, LLP legislation is limited to regulated professions like accountants, lawyers, etc. Thus, for starting a business in Canada, you must not only know about the benefit of the structure but also know about the facilities provided by the government in that particular province for your selected business structure. It can be said, that the selection of business structure is not an easy task in Canada. Helpline Group’s consultants can provide you with the best details about the business and will guide you about how to start a company in Canada with your selected business structure.

A foreign company can establish its branch office in Canada with the legal license provided by the Canadian government. A branch office must be registered under the province in which it will be operating. Helpline executives will guide in this regard and will also complete paperwork in order to help you in starting a business in Canada. Our native consultants have better knowledge of legal formalities in Canada. Branch office’s activities, rules and regulations everything depends on the province under which it comes, thus, the definition of “permissible business activities” defer from province to province in Canada, therefore, in Canada, a Branch Office business can conduct business activities as under-

A resident agent as a representative is hired to operate the business or a representative working in the office or company warehouse or any official place to conduct business.
Other than security, the parent company should have an interest in real property of that province.
Business activity can also be chosen by the governing laws of the province.
In Canada, Branch Office is having the privilege of tax benefit which makes them a popular business structure in Canada. According to the Canadian business law, all the activities of the Branch office make the parent company liable for the actions of the branch office including debts, liabilities and other legal obligations.

A corporation has a separate legal entity from its shareholders. In Canada, a corporation has legal recognition (as a natural person) through which it can own property in its own name, can take or give a loan, it can sue and can be sued by other people. Shareholders of a corporation have liabilities limited to the amount invested by them in buying shares, thus, shareholders do not have any authority on the assets of the company. A corporation has to file the tax return for every financial year and pay corporate tax accordingly. Company incorporation in Canada can be done at two levels i.e. either at the federal level or at the provincial level. Federal level incorporation of a company allows it to trade in any part of Canada whereas with Provincial level incorporation a company remains confined to a single region. If a corporation has federal registration then it can extend its province only by making application for provincial registration from the province in which you intend to have a business.

All the shareholders are the owner of the corporations and can make decisions by conducting the business meeting through votes. But ownership of a Corporation is not affected by the death of the shareholder or if he leaves the Corporation nothing gets affected, as the shares can be transferred to another person. The tax benefit is one of the core advantages for working in this structure, as shareholders in this firm can be anyone, thus, the owner can take shares in the name of family members or can issue dividends to them, which will redistribute income within the family. In Canada, if you qualify for “Small Business Deduction” then your corporation can avail a credit amount for your business which will reduce the payable tax amount.

Joint Venture is a result of an agreement formed between two or more people or companies or other entities to work together for accomplishing a task. Both the parties contribute their resources either in the terms of finance or skill or goods or services or goodwill for attaining mutual benefit on completion of the task. Joint venture comes to an end at the completion of the task or after a defined time period or incapability of one or more party to perform the task or any legal requirement, etc. A joint venture is not a legal entity in the eyes of law; therefore it cannot operate a business in its own name. In this type of business structure, the entity dealing with the third party is held liable for the deeds performed. The Canadian government has no law governing Joint Ventures; all the terms are based on an agreement with mutual discussion.

Although there is no specific law governing Joint venture, the Joint venture parties are required to work according to business guidelines provided by the Canadian government under the Act for Investment in Canada. Approval for having a Joint Venture is highly affected by the benefits derived from the agreement to the country, every province has their own way of analysing the agreement. Therefore, it can be said a joint venture not approved in one province might get approval in another province. Projects deriving benefits to the country like increasing productivity, increasing Canadian participation in the project, level of advancement, technological development, product innovation – development, industrial efficiency, etc. are highly preferred by the government.

Cooperative is legal incorporation which is owned by a group of people looking forward to satisfying specific needs of products or services either by selling the products or generating employment or for making that product or service available to the society. Sometimes cooperative have members who just work as an investor or support member. There are four kinds of Cooperation in Canada like consumer cooperative, producer cooperative, worker cooperative and multi-stakeholder. These cooperative are governed democratically with the votes of the members and its operative rules are defined at provincial or territorial or federal level.

Profit generated can be reserved for future use or can be distributed among the members; it is mutually decided at AGM. In Canada, cooperative societies can be formed under “Canada Cooperative Act” (Coop Act), for this applicant needs to file an application to the Corporations Canada. A Canadian Cooperative is required to follow the specific Cooperative Act formed at the provincial or territorial or federal level. All types of Cooperatives are governed under the same law except the Financial Cooperatives which are regulated under separate legislation.