Federal Corporation (Corp. / Inc. / Ltd.)
Corporation (Federal)
Company formation in Canada
The Corp. / Inc. / Ltd. is best suited for: Founders targeting the Canadian market or using Canada as a North American base, Startups pursuing the Canadian Startup Visa Program, Companies wanting nationwide name protection across all provinces, Canadian-Controlled Private Corporations (CCPCs) seeking the small business deduction. Federal corporate tax is 15% on taxable income. Provincial rates add 0โ16% depending on the province, yielding a combined rate of approximately 23โ31%. Canadian-Controlled Private Corporations (CCPCs) benefit from the small business deduction: the first CAD 500,000 of active business income is taxed at 9% federally (combined rate approximately 12โ15% depending on province). The general rate reduction brings the net federal rate to 15% for income above the small business limit. Canada operates an integration system for dividends โ eligible dividends receive a gross-up and dividend tax credit to reduce the combined corporate + personal tax burden. Capital gains are taxed at a 50% inclusion rate (the taxable half is included in income at the regular corporate rate).
- Founders targeting the Canadian market or using Canada as a North American base
- Startups pursuing the Canadian Startup Visa Program
- Companies wanting nationwide name protection across all provinces
- Canadian-Controlled Private Corporations (CCPCs) seeking the small business deduction
Key Facts
Step-by-Step Formation Process
Search and reserve a corporate name
Conduct a NUANS (Newly Upgraded Automated Name Search) report through an authorised search house. The NUANS report is mandatory for federal incorporation and must be filed within 90 days of issue. Alternatively, you can incorporate with a numbered name (e.g., 12345678 Canada Inc.) and add a trade name later.
Prepare Articles of Incorporation
Draft the Articles of Incorporation specifying the corporation name, registered office address, share classes and structure, restrictions on share transfers (if any), number of directors (fixed or minimum/maximum range), and any business restrictions. Gather director consent forms and initial registered office details.
File with Corporations Canada
Submit the Articles of Incorporation online via Corporations Canada Online Filing Centre. The filing fee is CAD 200 for online submission. Include the NUANS report (or elect a numbered name), the articles, and the initial registered office address and first directors.
Receive Certificate of Incorporation
Corporations Canada issues a Certificate of Incorporation with a federal corporation number. This certificate confirms the legal existence of the corporation under the Canada Business Corporations Act (CBCA).
Post-incorporation setup
Register extra-provincially in each province where the corporation will carry on business. Apply for a Business Number (BN) with the Canada Revenue Agency (CRA). Register for GST/HST if revenue will exceed CAD 30,000. Open a corporate bank account, pass initial by-laws and resolutions, issue shares, and establish a corporate minute book.
Required Documents
- NUANS name search report (valid for 90 days) or election for numbered name
- Articles of Incorporation
- Consent to act as director from each director
- Registered office address in Canada
- Details of share structure (classes, rights, restrictions)
- Identification documents for directors and incorporators
Cost Overview
Tax Treatment
Federal corporate tax is 15% on taxable income. Provincial rates add 0โ16% depending on the province, yielding a combined rate of approximately 23โ31%. Canadian-Controlled Private Corporations (CCPCs) benefit from the small business deduction: the first CAD 500,000 of active business income is taxed at 9% federally (combined rate approximately 12โ15% depending on province). The general rate reduction brings the net federal rate to 15% for income above the small business limit. Canada operates an integration system for dividends โ eligible dividends receive a gross-up and dividend tax credit to reduce the combined corporate + personal tax burden. Capital gains are taxed at a 50% inclusion rate (the taxable half is included in income at the regular corporate rate).
Pros & Cons
- Name protection across all Canadian provinces and territories โ no other federal or provincial corporation can use the same name
- Governed by the CBCA, which is well-understood, regularly updated, and provides strong minority shareholder protections
- Canadian-Controlled Private Corporations (CCPCs) benefit from the small business deduction โ 9% federal rate on the first CAD 500,000 of active business income
- Access to the Scientific Research and Experimental Development (SR&ED) tax credit โ one of the most generous R&D incentives in the world
- Straightforward online incorporation through Corporations Canada โ CAD 200 filing fee
- Robust double tax treaty network with 95+ countries, facilitating international business
- Strong banking infrastructure and globally respected regulatory environment
- At least 25% of directors must be Canadian residents for most federal corporations (CBCA requirement)
- Must register extra-provincially in each province where the corporation carries on business โ adds cost and filings
- Combined federal-provincial corporate tax rate of 23โ31% is not the lowest among G7 nations
- Bilingual requirements may apply for certain filings and consumer-facing activities in Quebec
- Annual corporate tax returns and federal annual return must be filed, with penalties for late filing
Other Structures in Canada
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.