Local and foreign investors who want to open companies in Canada have several choices in terms of business forms. Even if the most employed one is the corporation, there are two types of corporations which can be established in Canada. The first one is the private company which is subject to less stringent requirements and the second one is the public corporation which is subject to more complex requisites.
The Canadian public corporation is governed by the Company Law, but also by specific regulations applied at provincial levels. Our company formation agents in Canada can explain the requirements related to opening a public corporation and can also help those interested in setting up this type of structure.
The name of this business form is related to the fact that it can trade its shares to the public. The Canadian public company can offer its shares for sale on the Stock Exchange. Not all the shares must be listed, as this type of company can issue several classes of shares, out of which only one needs to be traded in order for the company to become public.
A Canadian company can also become a public corporation if at the end of the financial year it respects the provisions of Regulation No. 4800 within the Income Tax Act.
Canadian subsidiaries can also be or become public corporations if they are established or controlled by other public companies.
You can ask our company registration consultants in Canada about the conditions related to opening a public corporation.
The Company Law provides for the same conditions for opening a private and public corporation in Canada, including in the shareholding structure of the business. This means that the public company only requires a shareholder as a founder of the business.
The public company, however, can also admit other shareholders through the sale of shares or listing the shares on the Stock Exchange. There is no maximum number when it comes to the shareholders of a public corporation in Canada.
Our company registration agents in Canada can offer more information on the rights and obligations of public corporations.
One of the most important advantages of opening a public company in Canada is that there is no minimum amount of money required as a share capital for the corporation. However, the company will need to have a stated share capital which needs to be mentioned in the company’s statutory documents and a paid-up capital which will be the amount of money deposited by the founders in the company’s bank account.
The share capital can be altered, meaning that it can be increased or decreased.
Our local representatives can offer more information on the share capital requirements of a public corporation in Canada. We can also assist with the opening of a corporate bank account.
The incorporation of a public corporation in Canada is subject to the same requirements as a private company and implies the following steps:
It must be noted that a private company can also be turned into a public company in Canada. This is possible through an initial public offering. If you plan on setting up a business in Canada and need guidance for the establishment of a public corporation, you can rely on our local advisors.
Please know that the corporation must be registered for tax purposes in 2024, considering that the main purpose for its registration is to develop commercial activities that are taxed following the Canadian law. Thus, it is mandatory to register the legal entity with the Canadian Revenue Agency.
You must also observe the obligations you may have for obtaining business permits and licenses (their type can vary in accordance with the types of business operations you plan to develop in Canada in 2024). We also mention that the requirements for the incorporation can slightly vary based on the Canadian province of choice. However, the main rules that must be followed for the incorporation of this legal entity derive from the Canada Business Corporation Act.
The public corporation is quite popular in Canada because of the advantages it offers. Among these are:
If you are interested in setting up a public corporation in Canada, please contact us for personalized company formation services.
Please mind that if you want to set up a business in Canada, the manner in which the company will be taxed can vary depending on the place of incorporation.
Canada applies taxes that are charged at a national level, as well as taxes charged at a provincial level and this can result in a different tax burden of companies located across the country (the general income tax is of 38%).
The taxes due for a company must always be calculated by accountants in Canada, who are qualified in handling the company’s financial documents and submitting them with the local authorities.
Investors also have to take into consideration the programs that they can use in order to relocate here for employment/self-employment/business.
One of the available options is the Owner Operator program in Canada, which is actually a work permit. The applicants must provide evidence that they own at least 50% of the company and that they have a minimum set of skills required for that field.
Another type of work permit available for foreigners is the Intra Company Transfer in Canada, useful for the employees of multinational companies that have set up offices in this country.
The applicant must be a full-time employee in order to qualify for this program and he or she must apply for a similar position as the one he or she held in the country of residence.
