How to Start a Company in Canada (Latest Steps) (2025)

Three years ago, I watched my neighbor pack up his life and move from Seattle to Toronto.

His reason? “Canada makes it ridiculously easy to start a company in Canada if you know what you’re doing.”

He wasn’t wrong.

While my American friends were drowning in red tape and sky-high incorporation fees, he had his Canadian corporation up and running in less than two weeks for under $500.

The kicker? His business grew 300% in year one, partly because he tapped into Canada’s incredible government incentive programs that most entrepreneurs don’t even know exist.

Here’s the truth: starting a company in Canada isn’t just easier than most countries – it’s a strategic advantage if you play your cards right.

You get access to universal healthcare (goodbye, crushing insurance premiums), government grants that actually fund real businesses, and a legal system that protects entrepreneurs instead of bleeding them dry.

But here’s what nobody tells you: most people mess this up because they follow generic advice instead of understanding Canada’s specific requirements.

In this guide, I’ll walk you through exactly how I’ve helped dozens of entrepreneurs start a company in Canada the right way – from choosing your business structure to avoiding the costly mistakes that can derail your progress before you even begin.

What You’ll Need to Start a Company in Canada

Before you dive headfirst into paperwork, let’s get realistic about what starting a company in Canada actually requires.

Most “how-to” guides skip this part, then wonder why entrepreneurs get stuck three steps in.

Here’s your honest assessment of what you need upfront:

Legal Requirements:

A Canadian address (this can be a registered office service)
At least one director who’s a Canadian resident
Articles of incorporation
A NUANS (Newly Upgraded Automated Name Search) report
Corporate bylaws

Financial Prerequisites:

$500-$1,500 for incorporation fees (depending on federal vs. provincial)
$200-$300 for NUANS report and name reservation
Banking minimum deposits (varies by institution)
Professional service fees if you hire help ($1,000-$3,000 typical range)

The resident director requirement trips up most international entrepreneurs.

If you are not Canadian, you need to either partner with someone who is, or use a professional director service.

Don’t try to fake this – Canada’s corporate registry system is sophisticated, and getting caught means starting over with penalties.

Essential Tools and Software:

Corporate registry account (government portal)
Accounting software (QuickBooks or FreshBooks work well)
Legal document templates (LawDepot or rocket lawyer)
Digital signature solution (DocuSign or Adobe Sign)

Time Investment Reality Check:

Name search and reservation: 1-2 days
Document preparation: 2-3 days if you’re organized
Government processing: 1-5 business days for online filing
Banking setup: 1-2 weeks (banks move slowly)

The entire process takes 2-4 weeks if you do everything correctly the first time.

Most people stretch this to 2-3 months because they skip steps or submit incomplete applications.

Don’t be most people.

How to Start a Company in Canada

If you want to register a business in Canada, follow these steps.

Step 1: Choose Your Business Structure

This decision affects everything from your taxes to your personal liability.

Most entrepreneurs get paralyzed here because they overthink it.

Here’s how to choose without the analysis paralysis:

Corporation (Most Common Choice):

Limited liability protection
Tax advantages for retained earnings
Professional credibility
Easier to raise investment
More complex reporting requirements

Partnership:

Shared responsibility and resources
Pass-through taxation
Less paperwork than corporations
Personal liability for partner’s actions
Potential for disputes

Sole Proprietorship:

Simplest structure
Complete control
Minimal paperwork
Personal liability for all debts
Limited growth potential

My recommendation: Choose corporation unless you are testing a small service business or have specific reasons to avoid it.

The extra paperwork is worth the protection and growth options.

Warning: Don’t choose based on what your friend did or what sounds “easier.” Your business structure should match your growth plans and risk tolerance.

Step 2: Select and Reserve Your Business Name

Your company name isn’t just branding – it is a legal requirement that can make or break your incorporation.

Canada has strict naming rules that catch most first-timers off guard.

NUANS Report Process: The NUANS system searches existing business names to prevent conflicts.

You can’t incorporate without this report, and it costs $8-$25 depending on your search method.

Naming Requirements:

Must include a legal element (“Corporation,” “Inc.,” “Ltd.”)
Cannot be confusingly similar to existing names
Cannot include prohibited words without permission
Must be in English, French, or both

Pro tip: Have 3-5 name options ready before ordering your NUANS report.

Names you think are “unique” often have similar variations already registered.

Red Flags to Avoid:

Generic names like “Canadian Services Inc.”
Names requiring government approval (“Bank,” “University,” “Insurance”)
Trademarked terms you don’t own
Names identical to major brands (yes, people try this)

Step 3: Register Your Business

This is where you make it official.

You have two paths: federal incorporation or provincial incorporation.

Federal Incorporation:

Operate anywhere in Canada
Higher fees ($200 online, $250 by mail)
More prestige
Required if you plan multi-provincial operations

Provincial Incorporation:

Lower fees ($155-$300 depending on province)
Faster processing in some provinces
Sufficient for most small businesses
May need extra-provincial registration later

Filing Your Articles of Incorporation: The government portal walks you through this, but here are the critical details they don’t emphasize:

Share Structure: Most small businesses choose “unlimited common shares, no par value.”

This gives you maximum flexibility without getting complex.

Directors: You need at least one, and they must provide a residential address (not P.O. boxes).

Registered Office: This address receives legal documents, so make sure someone monitors it.

Processing Time Reality:

Online filing: Usually processed same day or next business day
Paper filing: 10-20 business days
Complex applications: Up to 8 weeks

Always file online unless you have unusual circumstances.

Step 4: Obtain Necessary Licenses and Permits

Getting your incorporation certificate doesn’t mean you can start operating.

Most businesses need additional licenses, and operating without them can shut you down fast.

Business License (Municipal): Every city and town has different requirements.

Call your municipal office directly – their websites are often outdated.

Provincial Licenses: Required for regulated industries like:

Food service and retail
Construction and trades
Professional services
Healthcare related businesses

Federal Permits: Needed for businesses involving:

Import/export
Broadcasting
Transportation
Financial services

Industry-Specific Requirements: Research your industry thoroughly.

A restaurant needs health permits, liquor licenses, and fire department approvals.

A consulting business might only need a basic business license.

Warning: Don’t assume you can “figure it out later.”

Some permits take months to obtain, and you can’t legally operate without them.

Step 5: Set Up Your Business Number and Tax Accounts

The Canada Revenue Agency (CRA) needs to know you exist.

This step connects your business to Canada’s tax system.

Business Number (BN): This is your unique identifier for all government dealings.

You get it when you register for your first CRA program account.

Required Registrations:

Corporate Income Tax (automatic with incorporation)
GST/HST (required if you expect over $30,000 annual revenue)
Payroll deductions (if you’ll have employees)
Workers’ compensation (provincial requirement with employees)

GST/HST Decision: You can register voluntarily even under $30,000 revenue.

Benefits include claiming input tax credits on business expenses.

Downside is additional paperwork and remittance requirements.

Pro tip: Register for everything you might need in the next year.

Adding programs later requires separate applications and delays.

Tips for Success When You Start a Company in Canada

Now that you know the steps to start and register a company in Canada, let me floor you with some tips.

a). Set Up Business Banking Immediately

Don’t wait until you need it.

Canadian banks require extensive documentation and often have waiting periods for business accounts.

Recommended banks for new businesses:

RBC (best overall service)
TD (good online platform)
Scotiabank (competitive fees)
Credit unions (better rates, local service)

Required banking documents:

Certificate of incorporation
Articles of incorporation
Corporate bylaws
Director identification
Business license (if applicable)

b). Professional Advisory Team

You don’t need everyone immediately, but know who to call when you need help:

Accountant: Essential for tax planning and compliance

Lawyer: Important for contracts and complex legal issues

Insurance broker: Protects your business from unexpected risks

Business banker: Helps with financing and cash flow management

c). Government Programs and Incentives

Canada offers incredible support for new businesses that most entrepreneurs never discover:

Scientific Research and Experimental Development (SR&ED): Tax credits for innovation

Canada Small Business Financing Program: Loan guarantees up to $1 million

Industrial Research Assistance Program (IRAP): Funding for technology development

Provincial grants: Vary by province but often include startup funding

Essential Business Software Stack:

Accounting: QuickBooks Online or Xero
Banking: Online banking with API integration
Legal: LawDepot for document templates
Communication: Professional email with your domain
Project management: Asana or Monday.com

d). The 90-Day Rule

Plan to have everything operational within 90 days of incorporation.

This includes banking, licensing, insurance, and first customer acquisition.

Companies that take longer often lose momentum and struggle to gain traction.

Common Mistakes to Avoid When You Start a Company in Canada

Don’t screw this one up.

And there’s only one way NOT TO DO that…

a). Mixing Personal and Business Finances

This is the fastest way to lose your corporate protection.

Open a business bank account immediately and use it exclusively for business transactions.

b). Ignoring Minute Books

Canadian corporations must maintain proper corporate records.

Missing or incomplete minute books can invalidate your corporate status during legal challenges.

c). Skipping Professional Advice for “Simple” Decisions

That $500 consultation with a tax accountant can save you $5,000 in mistakes later.

Don’t penny-wise, pound-foolish yourself into expensive problems.

d). Failing to Understand Tax Deadlines

Canadian corporations have specific filing deadlines based on their year-end.

Missing these results in automatic penalties starting at $25 per day.

e). Not Registering for GST/HST Soon Enough

If you cross the $30,000 revenue threshold without registering, you owe GST/HST on all sales but can’t claim input credits on previous expenses.

f). Choosing the Wrong Year-End

Your corporate year-end affects tax planning opportunities.

Most small businesses benefit from a January 31 year-end, but your situation might be different.

h). Inadequate Insurance Coverage

General liability insurance costs $300-$800 annually but protects against lawsuits that could bankrupt your company.

Professional liability, cyber liability, and key person insurance might also be essential depending on your business.

Troubleshooting Common Issues When You Start a Company in Canada

Registering a company in Canada won’t be a smooth process.

You will meet challenges. Let me take you through some of them and appropriate solutions to each.

a). Name Rejection Problems

If your proposed name gets rejected, don’t panic.

Order a new NUANS report with alternative names, or consider using a numbered company with a trade name.

Numbered companies (like “1234567 Ontario Inc.”) are always available and you can operate under any trade name you want.

b). Director Residency Issues

International entrepreneurs often struggle with the Canadian resident director requirement.

Solutions:

Partner with a Canadian resident
Use a professional director service ($500-$1,500 annually)
Obtain Canadian residency before incorporating

c). Banking Delays

Canadian banks are notoriously slow with business accounts.

Acceleration strategies:

Prepare all documents in advance
Choose banks with dedicated small business representatives
Consider credit unions for faster service
Build relationships before you need services

d). License and Permit Confusion

Government websites often provide conflicting information about required licenses.

Best approach:

Call government offices directly
Speak with existing businesses in your industry
Consult with professional advisors
Join industry associations for guidance

e). Tax Registration Complications

The CRA’s online system sometimes glitches or requires manual processing.

Backup plans:

Keep copies of all submissions
Follow up within 10 business days
Use the CRA’s phone support for complex issues
Consider professional tax preparation services

Alternatives to Standard Incorporation

Here are some alternative ways to start a company in Canada.

Professional Corporations

Doctors, lawyers, accountants, and other licensed professionals often need professional corporations instead of standard business corporations.

Key differences:

Additional regulatory oversight
Specific share structure requirements
Professional liability considerations
Higher regulatory fees

When to choose: Required for many licensed professions, optional for others like consultants and engineers.

Non-Profit Corporations

If your business model focuses on social good rather than profit, non-profit incorporation might be appropriate.

Benefits:

Potential tax exemptions
Grant eligibility
Public trust and credibility
Lower filing fees

Drawbacks:

Cannot distribute profits to members
Additional regulatory requirements
Limited business activities
Complex dissolution process

Partnership Structures

Sometimes partnerships make more sense than corporations, especially for professional services or family businesses.

Limited Partnership: Combines general partners (unlimited liability) with limited partners (liability limited to investment)

Limited Liability Partnership (LLP): Available in most provinces for professional services

When partnerships work better:

Professional services where personal liability isn’t a major concern
Family businesses with clear succession plans
Businesses where pass-through taxation provides advantages
Ventures with multiple active participants

Sole Proprietorship Alternative

The simplest business structure requires minimal paperwork but offers no liability protection.

Process:

Register the business name provincially
Obtain required licenses
Register for tax accounts
Start operating

Best for:

Low-risk service businesses
Testing business concepts
Part-time or seasonal businesses
Businesses with minimal startup investment

Ready to Start Your Company in Canada?

Starting a company in Canada isn’t complicated when you follow the right process.

The biggest mistake most entrepreneurs make is trying to figure it out as they go instead of planning their approach upfront.

Here’s your action plan:

Choose your business structure based on your growth plans and liability concerns, not what seems easiest today.

Reserve your business name after researching alternatives – don’t fall in love with one option.

File your incorporation documents online to save time and money.

Set up your banking and tax registrations immediately after incorporation.

Get proper licenses before you start operating, not after you get caught.

Most importantly, don’t try to save money by skipping professional advice on important decisions.

The $500 you spend on proper legal or accounting guidance prevents the $5,000 mistakes that derail businesses later.

Canada offers incredible opportunities for entrepreneurs who understand the system.

Government incentives, healthcare benefits, and business-friendly policies create advantages that entrepreneurs in other countries can only dream about.

But these advantages only help businesses that get properly established in the first place.

Start a company in Canada the right way, and you’ll have access to one of the world’s most supportive business environments.

Cut corners or guess your way through the process, and you’ll spend months fixing preventable problems instead of building your business.

The choice is yours.

Your future customers are waiting – don’t keep them waiting because you didn’t plan properly.

Frequently Asked Questions

How long does it take to start a company in Canada?

The complete process typically takes 2-4 weeks if you file online and have all documents prepared. Government processing is usually 1-5 business days, but banking setup and license approvals can add additional time.

Do I need to be a Canadian citizen to start a company in Canada?

No, but you need at least one director who is a Canadian resident. Non-residents can own shares and be officers, but the residency requirement for directors is mandatory.

What’s the difference between federal and provincial incorporation?

Federal incorporation allows you to operate anywhere in Canada and costs more ($200+ vs $155-300). Provincial incorporation is sufficient for most small businesses operating in one province.

How much does it cost to start a company in Canada?

Basic incorporation costs $200-500 for government fees, plus $200-300 for name search and legal documents. Total startup costs including professional services typically range from $1,000-3,000.

Do I need a lawyer to incorporate in Canada?

It’s not legally required, but recommended for complex situations. Simple incorporations can be done online, but professional advice helps avoid costly mistakes with share structures, tax planning, and compliance requirements.

What business licenses do I need?

This depends on your industry and location. Most businesses need a municipal business license, and many require provincial or federal permits. Research requirements specific to your business type and location.

When do I need to register for GST/HST?

Registration is mandatory when your annual revenue exceeds $30,000. You can register voluntarily at any revenue level to claim input tax credits on business expenses.