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Types of companies in Canada

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Canada, with all its modern economic structure and well-functioning business conditions, has a number of features in the work of enterprises, registered on its territory. IQ Decision experts draw your attention to the fact that there are a number of peculiarities regarding ownership, and therefore types of enterprises.

One frequently asked question is: can you open an LLC in Canada?

A question directly depends on whether the registration of a company in Canada involves the legal application of the principles of limited liability to it, as it happens if, for example, you decide to register an LLC in the USA.

According to experts from IQ Decision, a form of business, to which an LLC belongs, is considered to be “hybrid” due to the compilation of some characteristics, belonging to such forms as “corporation” and “partnership”.

Tax-wise LLC in Canada is similar to an individual entrepreneurship or a partnership. And it is considered depending on the profit of owners or investors and is added to personal income from tax returns. Nevertheless, it is impossible to open an LLC in Canada, since such a form of business does not exist in Canada by a law.

If you decide to register an LLC in Canada ー it will be called a “Corporation”.

Legal forms of business in Canada:

  • Cooperative;
  • Sole;
  • Partnership;
  • Corporation.

If you want to register a company in Canada, you should keep in mind, that this has its advantages and disadvantages, that should be considered.

First, you should decide whether you intend to open a company in Canada or to buy an existing company in Canada. You can also buy a franchise in Canada.

It may be quite tempting for you to buy a turnkey company in Canada. You just have to open a bank account in Canada and you can begin to act. However, according to monitoring, conducted by IQ Decision experts, opening an account with a bank of Canada for citizens of the CIS countries is currently problematic. These are the realities and you can easily verify this personally.

However, we have a unique offer for our customers. If you decide to buy an existing business in Canada with our help, IQ Decision will assist in opening an account in a Canadian bank.

A few words about the franchise. Buying a franchise in Canada is quite interesting for those, who really plan to do business here. Note, that franchising in America is very common. The same applies to franchising in Canada.

Types of companies in Canada

IQ Decision aid: Before you talk about the types of companies, you need to know, that dividing Canadian territory into separate states, like in the USA, provides a number of features for each state. This also applies to registration rules and business, as well as taxation. For more specific and detailed information, you can contact qualified lawyers of our company.

Another nuance: a registration of a branch in Canada or the establishment of a company in Canada is possible according to the territorial principle: provincial, if you register only on the territory of the province (state) and federal, that applies to the whole territory of Canada. An example is registering a company in Ontario or establishing an enterprise in Vancouver. But there are no significant differences in the rules of operation of a federal or provincial enterprise. The main difference is that the provincial cannot provide services and open branches in Canada.


This form is considered obsolete and today is almost irrelevant. The owners of such a company are members of the created cooperative, having equal shares in profits and rights. Today, even though in fact the enterprise operates as a cooperative, it is still registered as a corporation.

Sole Proprietorship

To open a Sole Proprietorship in Canada means to create the simplest local business structure. Such an enterprise has a sole owner, who is fully responsible for all activities, including debts.

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This type is also considered a small business, requires two or more co-owners. You can register a Partnership in Canada as:

  • a General Partnership, characterized by the liability of the owners;
  • a Limited Partnership, where there is one general partner and one limited partner. If you intend to register an LP in Canada, remember, that there are no requirements for authorized capital and no taxation either.

A responsibility of the beneficiaries is complete.


To open a Corporation in Canada is almost the same as opening an LLC in Canada. Beneficiaries (shareholders) are not responsible for debts. A statutory capital is not provided. Tax benefits are possible, when a company is defined by the registrar as “a small business”. But, also, such form has disadvantages: a complicated reporting, double taxation are tightly regulated.

A few words about how to register a company in Canada with a non-resident: a number of requirements

You can register a Sole Proprietorship in Canada or register a Partnership in Canada without the participation of a local resident.

To register a Corporation in Canada, you need at least 25% of the participants-residents of the country.

Moreover, non-residents, as a rule, choose exactly LP for business in Canada. And in this case we will be able to open an account in Canadian banks for our customers.

IQ Decision lawyers draw your attention to the fact, that the registration of a company in Canada itself does not give a right to stay in the country and obtain its resident status. Some activities are licensed. This is mainly safety, health or food.

Legal aid

If you decide to register a business in Canada remotely, the professionals of IQ Decision will help you not only to buy a company in Canada, but also to open an account in Canada.

  • The information outlined in the article is actual at the time of its publication.

  • Please refer to our specialists for checking possible solutions for your business.

  • Still have any questions?

    Fill out the form or contact us as you find convenient: skype, telegram, etc. Our experts will help you resolve the issue.

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