Federal Incorporation vs Alberta Provincial Incorporation
Contact Neufeld Legal for your incorporation legal work at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com
There are critical distinctions between a federal corporation incorporated under the Canada Business Corporations Act (CBCA) and a provincial corporation incorporated under the Alberta Business Corporations Act (ABCA), with our own professional assessment most often resulting in our professional recommendation favouring incorporation as an Alberta provincial corporation. Nonetheless, the specific facts and circumstances of the particular business and its objective goals must be individually assessed and scrutinized.
Name Protection
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Federal Corporation: Stronger, nationwide protection. Name is protected across all provinces and territories.
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Alberta Provincial Corporation: Alberta only. Name is only protected within the province of Alberta (although simple additional strategies available to augment name protection).
Director Residency
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Federal Corporation: Requirement that at least 25% of directors must be Canadian residents (or at least one if fewer than four directors).
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Alberta Provincial Corporation: No residency requirement. This can be an advantage for non-residents incorporating in Canada.
Extra-Provincial Registration
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Federal Corporation: Required in every province (including Alberta) where the corporation physically conducts business (e.g., has an office, employees) [extra-provincial registration charges are oftentimes more expensive than government incorporation charges, with no special arrangement existing with the provinces].
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Alberta Provincial Corporation: Required only if the business expands and operates in a province other than Alberta (participant in arrangement between provincial governments to make this highly cost-effective).
Annual Filings
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Federal Corporation: File an Annual Return with Corporations Canada, together with Annual Returns in each province within which it operates.
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Alberta Provincial Corporation: File an Annual Return with the Alberta government, unless extra-provincially registered and operating in other provinces such that Annual Returns need to be filed in those provinces.
Prestige
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Federal Corporation: Depicted by the federal government as having higher national/international recognition, although this is more of a marketing posture.
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Alberta Provincial Corporation: A non-issue, especially where one considers the advantages associated with provincial incorporation (just like in the USA, where all corporations are incorporated at the state level, which includes all the Fortune 500 companies incorporated in the United States).
Public Disclosure of Information
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Federal Corporation: Information that is published on Corporations Canada's online database and is freely searchable:
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Directors' names, and their address for service (or residential address if no address for service is provided);
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Individuals with Significant Control (ISC) [individuals who own or control 25% or more of the shares or voting rights] have published their name, address for service (or residential address), and the date they became/ceased to be an ISC;
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Registered office address; and
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Information contained in Annual Return.
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Alberta Provincial Corporation: Information that can be acquired for a fee from a registered service provider (not attainable online):
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Directors' names, and their address for service (or residential address if no address for service is provided);
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Registered office address; and
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Information contained in Annual Return.
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So if you are looking to incorporate a new corporation or deal with the corporate legalities impacting your company, contact our law firm to schedule a confidential consultation with a lawyer experienced in the legal intricacies of business incorporation and commercial business development at 403-400-4092 [Alberta], 905-616-8864 [Ontario] or via email at Chris@NeufeldLegal.com.
