Federal or provincial? Choosing where to incorporate in Canada

The first decision a Canadian founder makes after choosing to incorporate is which statute to incorporate under. For most, the real choice is between the federal Canada Business Corporations Act (CBCA) and the business corporations act of the province where the company will live, usually Ontario's OBCA or British Columbia's BCBCA. The statutes are close cousins. The differences that matter are name protection, who may sit on the board, what gets published about the owners, and the maintenance each choice commits you to for the life of the company.

What federal incorporation actually buys

A CBCA corporation may carry on business throughout Canada (CBCA s. 15(2)), and Corporations Canada's headline benefit is the right to operate under one unique name right across the country, which matters if the business will expand into more than one province (Benefits of incorporating). The corporate name search is now part of the online federal incorporation process, so a separate Nuans report is not needed to incorporate with a word name (Services, fees and processing times). Online incorporation costs $200 and is typically completed within one business day, and the corporation receives its business number and its corporation income tax program account automatically (CRA, when you need a business number).

What it does not buy is freedom from the provinces. Corporations Canada is explicit that provincial and territorial legislation requires a federal corporation to register in each province and territory in which it will conduct business, and that conducting business typically includes having an address, a post office box or a phone number there, or offering products or services there (Register a federal corporation in a province or territory).

In Ontario the mechanics are these. A federal corporation is a Class 2 extra-provincial corporation and may carry on business in Ontario without a licence (Extra-Provincial Corporations Act s. 2(1) and s. 4(1)). It must, however, file an initial return under the Corporations Information Act within 60 days after it begins to carry on business in Ontario (CIA s. 3(2)) and a notice of change within 15 days of any change to that information (s. 4(1)). It does not file an Ontario annual return, because the regulation limits that return to corporations subject to the OBCA, corporations subject to the Corporations Act, and licensed foreign corporations (Reg. 182 s. 6(2)).

The director residency question

This is the difference most likely to decide the question for a founder with partners outside Canada, and it is the one most often stated wrongly.

Under the CBCA, at least 25% of the directors must be resident Canadians, and if the corporation has fewer than four directors, at least one must be (CBCA s. 105(3)). Corporations in prescribed business sectors, or that must maintain a specified level of Canadian ownership or control, need a majority of resident Canadian directors (s. 105(3.1)). The requirement remains in force. A two-founder company where neither founder is a resident Canadian cannot be a CBCA corporation without adding a resident director.

Ontario removed its equivalent. The resident Canadian requirement in section 118(3) of the OBCA was repealed by 2020, c. 34, Sched. 1, s. 5, in force July 5, 2021; the section now reads simply "Repealed" (OBCA s. 118). The remaining qualifications are that a director be an individual, at least 18, not bankrupt and not found incapable (s. 118(1)).

British Columbia's current Act has none either. A BC company must have at least one director, and a public company at least three (BCBCA s. 120). The disqualifications in section 124 are age under 18, a finding of incapacity, undischarged bankruptcy, and certain convictions for corporate or fraud offences; residency is not among them.

For a company whose founders and early investors are all outside Canada, Ontario or BC is therefore the simpler path. For a company with at least one resident Canadian founder willing to sit on the board, the CBCA rule is satisfied at incorporation and only becomes a constraint if that person later leaves.

What gets published about the owners

Both regimes require a register of individuals with significant control, using the same 25% thresholds for voting rights or fair market value of shares. The regimes part ways on publication.

Since January 2024, CBCA corporations file their register information with Corporations Canada, and the Director publishes each individual's name, their address for service (or residential address if none was provided), the dates they became or ceased to be an individual with significant control, and a description of their control (CBCA s. 21.303(1)). Minors are excluded and a safety-based exemption exists.

Ontario corporations keep the same kind of register under OBCA s. 140.2, and as of publication nothing is filed publicly; it is disclosed on request to police, tax officials and listed regulators (s. 140.3). The gap is narrowing: section 6.1 of the Corporations Information Act, "Return re individuals with significant control" (2025, c. 15, Sched. 4, s. 1), has been enacted but is not yet in force, and on proclamation would require a filing about those individuals if the regulations so provide (CIA s. 6.1). Founders who care about the visibility of the cap table should treat this as a real difference today, and one the legislature has already moved to narrow.

The maintenance each choice commits you to

A CBCA corporation files an annual return with Corporations Canada within 60 days of its anniversary date, at $12 online, together with its ISC information; failing to file for a year exposes it to administrative dissolution, and Corporations Canada's policy is to act after two years (Policy on annual filings). It must hold its annual meeting, or sign the written resolutions that replace it, not later than 15 months after the last one and no later than six months after the financial year end (CBCA s. 133(1)). Add the Ontario initial return and notices of change if it carries on business in Ontario.

An OBCA corporation files its annual return through the Ontario Business Registry within the period for filing its T2, which the CRA sets at six months after the tax year end (Reg. 182 s. 2.3(4)), plus an initial return within 60 days of incorporation and notices of change within 15 days (CIA ss. 2, 4). Its annual meeting must be held not later than 18 months after incorporation and then not later than 15 months after the last one (OBCA s. 94(1)); there is no six-month outer limit tied to year end. It keeps, but does not file, its transparency register. If it expands to another province, it registers there.

A BC company has its own annual report and transparency register requirements under the BCBCA and its regulations; check the BC Registry's current requirements before relying on any summary.

Fees differ by registry and change; the federal figures above are current on Corporations Canada's fee page, and the Ontario figures should be checked on the Ontario Business Registry.

A decision table

Question	CBCA	OBCA	BCBCA
Name protected across Canada	Yes (Corporations Canada)	Provincial registry; check its rules	Provincial registry; check its rules
Resident Canadian directors	At least 25%; at least one if fewer than four (s. 105(3))	None (s. 118(3) repealed 2021)	None (s. 124)
Owner information public	Yes, via Corporations Canada (s. 21.303)	Not as of publication; disclosed on request (s. 140.3). CIA s. 6.1 (enacted, not in force) would add a filing	Check current BC requirements
Annual government filing	Annual return + ISC, 60 days after anniversary	CIA annual return, within the T2 period	Check current BC requirements
Doing business in another province	Register there	Register there	Register there

How to decide

Choose the CBCA if the business will operate under one name in several provinces from the start and has at least one resident Canadian willing to serve as a director for the long term. Choose Ontario or BC if the board will be wholly non-resident, if the company will operate in a single province for the foreseeable future, or if keeping the ownership register off the public record matters. In every case, the choice is a filing calendar as much as a statute, and the calendar starts on day one.

For federal and Ontario corporations, Misolla tracks both calendars and prepares each filing for a lawyer's approval.

This article is general information, not legal advice; a lawyer must review your specific situation.