Foreign Company Registration in Canada , S & F CONSULTING FIRM LIMITED
Foreign Company Registration (100% Foreign Investment, Joint Venture, Virtual/ Branch/ Liason Office, Foundation), Taxation, Accounts & Audit, Legal, Company Secretarial & Management Consultancy.
Company Registration/ Formation/ incorporation in Canada
Subsidiary/ branch office registration in Canada
Information for non-Canadians and foreign companies who want to do business in Canada, or for non-Canadians who want to immigrate to Canada and start their own businesses.
Non-Canadians - How to Open a Business in Canada
Are you a non-Canadian who has an established business in your own country and would like to open a business in Canada? Or are you a non-Canadian who would like to start a company in Canada? Here's how to open a business in Canada.Can I Start a Business When I'm in Canada on a Work Permit?
Wondering if you can start a business in Canada when you're in the country on a Canada work permit? If so, here's the answer to your question.Canada's New Start-Up Visa for Entrepreneur Immigrants
Now you can come to Canada to start a business and get permanent resident status. Learn all about Canada's new Start-up Visa program for entrepreneur immigrants.GST/HST Information for Non-Residents
This guide for non-residents doing business in Canada explains what the GST/HST tax is, how it works, whether or not you have to register, and how to calculate the tax if you do .Invest in Canada
If you're thinking about expanding your business into Canada, this website from the Government of Canada is full of useful information, including profiles of all the different regions in Canada, information on how to establish a business in Canada, why Canada is one of the best investment choices and more.Benefits of Incorporating in Canada
The primary benefit of becoming a corporation in Canada is the separation of your personal and business obligations. This means that you cannot be held personally liable for the debts or actions of the corporation. So, if your business goes south then your personal finances and assets are protected. You may not think now that you need protection against liability but what if you're a sole proprietor and a client holds you in breach of contract? Can you afford to put your personal assets at risk to satisfy any claims against your business?Other advantages are:
1. Continuous existence: A corporation has an unlimited life span; if you sell the business or shareholders die the business will continue to exist.
2. Ownership of the business entity is transferable: Because the entity has an unlimited life span, you can sell your business or plan its succession easily.
3. Raising money can be easier: Incorporated businesses can sell shares and equity to drive growth.
4. Tax advantages: Each example is unique, but corporations can benefit from Canada's small business deduction (16% on the first $200,000 of taxable income). You can also choose to defer certain tax payments and benefit from new tax laws or a lower tax bracket.
5. Increase your credibility and business-worthiness: Many businesses won't enter into sales or contract agreements with un-incorporated businesses. In which case, incorporation can improve your credibility and growth potential.
Directors Liability
The directors are responsible for the management of a Canadian Subsidiary Corporation and have a fiduciary duty which requires that they act honestly, in good faith and in the best interest of the corporation. Provincial and federal legislation provides that directors are expected to act with due care, diligence and skill and can be found to be personally liable in a variety of circumstances, including, causing or permitting environmental damage or offences, any unpaid employee wages, vacation pay or pension contributions, as well as a corporation's failure to remit source deductions or income taxes deducted from employees wages to any of the federal, provincial or territorial levels of government.
Foreign Direct Investment in Canada-FDI
A director is required to disclose all situations where he or she is in a conflict of interest position by virtue of a personal interest in a material contract with the corporation or in situations where opportunities have been gained as a direct result of information learned in the course of being a director of the corporation. Failure to disclose a conflict of interest and to refrain from voting on such issues may result in a director being held personally liable if they attempt to take advantage of a business opportunity that the corporation was seeking even if the director resigns prior to pursuing the opportunity and the corporation suffers no demonstrable loss.
Canadian Residency Requirements for Directors
Currently, five provinces and three territories (British Columbia, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Yukon, Northwest Territories and Nunavut) do not require a majority of a corporation's directors be resident Canadians. Other provinces require 25% majority or at least 50% of the directors be residents of Canada. Under Alberta, Saskatchewan and the federal jurisdiction, 25% of a corporation's directors must be resident Canadians except where the corporation has fewer than 4 directors, in which case at least one director must be a resident Canadian. Recently, there has been evidence of a trend towards easing the residency requirements for directors at both the federal and provincial level.
The issue of residency of a corporation's directors is generally dealt with in one of three manners by foreign entities. One option is to have professional advisors serve as nominee directors of the Canadian Subsidiary Corporation with the appropriate indemnity agreement and directors liability insurance to cover the directors' potential liability. The second option is to simply select a jurisdiction in which no directors' residency requirements exist (and extra-provincially register in the province(s) where the business activities are being carried on) thereby avoiding the issue altogether. The third option is to incorporate under a provincial jurisdiction that does have directors' residency requirements but to have what is known as a unanimous shareholder agreement (“USA”) put into place which removes all of the directors powers and confers them onto the shareholders of the corporation.
One feature of the corporate law of Canada and most of its provinces and territories is the availability of a USA.A USA is generally put into place at the time of incorporation and sets out procedures for the management of the business of the corporation, regulates the rights and obligations of shareholders to each other and can include mechanisms for dealing with the sale or transfer of a shareholder's shares. Unlike a voting trust agreement which is often employed in the US, a USA does not function as an agreement between shareholders with respect to how they will vote; rather, a USA can also limit the powers of a corporation's directors to manage the corporation's business by transferring the powers of the corporation's directors into the hands of the corporation's shareholder(s). This effectively results in a corporation's shareholder(s) having control and responsibility for the management of the corporation. Foreign entities that are forced to nominate certain directors in order to comply with the Canadian residency requirements often elect to institute a USA.
Canadian Residency Requirements for Directors
Currently, five provinces and three territories (British Columbia, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Yukon, Northwest Territories and Nunavut) do not require a majority of a corporation's directors be resident Canadians. Other provinces require 25% majority or at least 50% of the directors be residents of Canada. Under Alberta, Saskatchewan and the federal jurisdiction, 25% of a corporation's directors must be resident Canadians except where the corporation has fewer than 4 directors, in which case at least one director must be a resident Canadian. Recently, there has been evidence of a trend towards easing the residency requirements for directors at both the federal and provincial level.
The issue of residency of a corporation's directors is generally dealt with in one of three manners by foreign entities. One option is to have professional advisors serve as nominee directors of the Canadian Subsidiary Corporation with the appropriate indemnity agreement and directors liability insurance to cover the directors' potential liability. The second option is to simply select a jurisdiction in which no directors' residency requirements exist (and extra-provincially register in the province(s) where the business activities are being carried on) thereby avoiding the issue altogether. The third option is to incorporate under a provincial jurisdiction that does have directors' residency requirements but to have what is known as a unanimous shareholder agreement (“USA”) put into place which removes all of the directors powers and confers them onto the shareholders of the corporation.
One feature of the corporate law of Canada and most of its provinces and territories is the availability of a USA.A USA is generally put into place at the time of incorporation and sets out procedures for the management of the business of the corporation, regulates the rights and obligations of shareholders to each other and can include mechanisms for dealing with the sale or transfer of a shareholder's shares. Unlike a voting trust agreement which is often employed in the US, a USA does not function as an agreement between shareholders with respect to how they will vote; rather, a USA can also limit the powers of a corporation's directors to manage the corporation's business by transferring the powers of the corporation's directors into the hands of the corporation's shareholder(s). This effectively results in a corporation's shareholder(s) having control and responsibility for the management of the corporation. Foreign entities that are forced to nominate certain directors in order to comply with the Canadian residency requirements often elect to institute a USA.
Doing Business in Canada
Shareholders Liability
A corporation under Canadian law is recognized as a legal person in its own right, separate and distinct from its shareholders and having a perpetual existence. As such, the general rule is that shareholders in Canada enjoy limited liability. The corporate statutes expressly stipulate that shareholders are not generally, in that capacity, liable for any liability, act, or default of the corporation. The corporate statutes, however, also expressly create a number of exceptions to a shareholder's limited liability protection, such as receipt by a shareholder of an improper return of capital, an improper dividend or share redemption payments. In addition, the courts have developed mechanisms for finding shareholders to be personally liable for certain acts or omissions.
Shareholders of a corporation have a variety of remedies available to them in circumstances where they believe the corporation's interests are not being served adequately by its current management. In certain provinces, including Ontario and Alberta, the holders of not less than 5 percent of the issued shares of a corporation that carry the right to vote at a shareholder meeting, may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition and upon receiving such a requisition, the directors must call a meeting of shareholders within twenty-one days. If a corporation's directors do not call a meeting upon receiving a shareholder's requisition within twenty-one days, any shareholder who signed the requisition can call the meeting.
A shareholder who wants to bring an action against a director or officer of a corporation can do so in one of the three fashions:
• by way of oppression remedy whereby a shareholder must demonstrate that management of the board have acted in a manner in which was oppressive or prejudicial to the interests of the shareholders;
• by way of a derivative action whereby a shareholder will seek redress on behalf of the corporation in cases where it can demonstrate the corporation's rights have been breached; and
• by way of a compliance order whereby a shareholder will seek to compel or restrain certain actions of the corporation, its directors or officers.
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Email us: contact@sfconsultingbd.com
Toronto, Ontario, Ottawa - Canada
Email us: contact@sfconsultingbd.com
Toronto, Ontario, Ottawa - Canada
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