5 Benefits Of Incorporating Your Organisation Federally

Incorporation is a legal process which registers a business as an entity distinct from its proprietors. Incorporation offers many benefits to business owners and is a crucial procedure for companies to operate legally in this country.

Businesses in Canada can incorporate themselves federally as well as provincially, depending on the scope and nature of their operations. On a federal level, organisations are incorporated under two key legislations – Canada Business Corporation Act (CBCA) for commercial businesses and Canada Not-for-Profit Corporations Act (NFP) for charitable and Not-for-Profit organisations.

Here’s a closer look at the benefits of federal incorporation:

1) Ease of Incorporation

A vital advantage of incorporating your business federally is the ease and accessibility of this process. To file your articles of incorporation federally, a business owner must submit the following documents:

  • A registered address of operation
  • A unique business name
  • The type of business entity
  • Your business’s initial board of directors

Government of Canada’s official website provides a complete step by step instructional guide to help businesses incorporate successfully. The federal website also allows you to register your business and file its articles of incorporation and annual returns online making the procedure easier for your organisation.

2) Standardisation of the Entity Name

This is one of the key benefits of federal incorporation. Registering your business on a federal level allows you to maintain a standard entity name all across the country, irrespective of the type and the location of your business. This can be especially beneficial for industries that need to expand the locations of their operations to further their venture like warehousing and retail.

However, to ensure a successful registration, businesses need to select a name which is both unique and has no precursors. Hence, it is recommended to consult a corporate lawyer for the same. An experienced lawyer can help you choose or coin an exclusive business name as well as run a thorough search of pre-registered company names to ensure your business is incorporated accurately.

3) Beneficial for Non-Canadian Business Owners

Federal incorporation can be particularly beneficial for multinational enterprises preparing to expand their ventures into Canada. As incorporating a business on a federal level only requires 25% of the original board of directors to be the residents of Canada, companies planning to expand their operations in Canada can register their businesses relatively easier.

4) Global Recognition

Under the CBCA, corporations registered at a federal level are recognised as Canadian entities internationally. This recognition also extends to Not-for-Profit organisations registered under the NFP act. This acknowledgement can be useful for businesses which retain international clientele or are planning to extend their operations overseas.

5) Ease of Setup

As mentioned previously, registering your company federally lets you to maintain a standard entity name nationwide. This allows you to setup your business in any part of the country without necessitating registration in the province separately.

Federal incorporation if undertaken carefully and accurately can be beneficial for your business in the long term. Consult our legal experts to understand these benefits and the implications they have for your business better.