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Federal vs. Provincial Incorporation: Which is Right for Your Business?

  • Writer: Arshya Mittal
    Arshya Mittal
  • Aug 16
  • 2 min read

Updated: Aug 17

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If you’re ready to incorporate in Canada, one of the first choices you’ll face is whether to incorporate federally or provincially. Both options create a legal corporation, but the rules, costs, and protections are different.






At Mittal CPA Professional Corporation, we help business owners decide which route makes the most sense for their goals.

Federal Incorporation


A federal corporation is registered under the Canada Business Corporations Act (CBCA).


Benefits of Federal Incorporation

  • Nationwide Name Protection – Your business name is protected across all provinces and territories.

  • National Recognition – A federally incorporated company may appear more credible if you plan to expand or attract investors.

  • Mobility – You can do business in every province, though you may still need extra-provincial registrations.


Considerations

  • More paperwork: You must register in each province where you operate.

  • Annual filings are required both federally and provincially.

  • Slightly higher cost compared to provincial-only incorporation.

Provincial Incorporation (Ontario)


A provincial corporation is registered under the Ontario Business Corporations Act (OBCA).


Benefits of Ontario Incorporation

  • Lower Cost – Incorporation fees are about $360 online.

  • Simpler Compliance – Only need to file returns with Ontario.

  • Practical for Local Businesses – Best if you plan to operate mainly within Ontario.


Considerations

  • Your name is only protected in Ontario (another business could use a similar name in another province).

  • If you expand to other provinces, you’ll need to file additional registrations.

Example: Federal vs. Provincial


  • Scenario 1: Ontario-Based Contractor

    • Business is primarily local.

    • Incorporation cost: $360 (provincial).

    • Simpler filings.

    • Best choice: Provincial incorporation.


  • Scenario 2: Tech Startup Expanding Nationally

    • Plans to operate in Ontario, BC, and Alberta.

    • Federal incorporation protects name across Canada.

    • May need extra-provincial filings but stronger credibility with investors.

    • Best choice: Federal incorporation.

FAQ: Federal vs. Provincial Incorporation


Is federal incorporation more expensive?

Slightly — federal incorporation fees are around $200, plus extra-provincial fees (Ontario currently $360). So total costs are usually higher.


Can I switch later?

Yes, you can continue federally or provincially later, but it may involve extra filings and fees. Planning early helps avoid duplication.


Which option is better for online businesses?

If you’re selling products or services nationwide, federal incorporation may offer better protection for your business name.


Do both require corporate tax filings?

Yes, both federal and provincial corporations must file annual T2 corporate tax returns and maintain corporate records.

How Mittal CPA Can Help


Choosing between federal and provincial incorporation depends on your business size, growth plans, and budget. At Mittal CPA Professional Corporation, we:

  • Advise on which incorporation type best fits your goals.

  • Handle NUANS® searches, articles of incorporation, and CRA registration.

  • Set up your corporate records for compliance.

  • Provide ongoing tax and advisory services to maximize the benefits of incorporation.


Unsure whether to incorporate federally or provincially? Contact Mittal CPA Professional Corporation today — we’ll help you make the right choice and handle the paperwork for you.



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