Moving Away from Federal Incorporation

Doing what is legally best for your business and its advancement into Canada, as opposed to protecting prior legal work.

Contact Neufeld Legal PC at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com

Although many international business enterprises had their Canadian subsidiary corporation incorporated as a federal corporation, the purported advantages associated with federal incorporation have largely become disadvantages, with provincial corporations having become a preferable mode of conducting business within Canada, in particular for many international business enterprises. With federal corporations still imposing a Canadian-resident director requirement (which has been abandoned by most Canadian provinces), requiring ever more public disclosure of controlling persons (including those located outside of Canada), and heightened procedural obligations and costs (which the provinces have sought to reduce as between provincially incorporated corporations), shifting from a federal corporation to a provincial corporation represents a logical move for most international business enterprises operating in Canada.

Transforming the Canadian corporate entity from a federal corporation to a provincial corporation is undertaken by way of Continuance (also known as Corporate Migration). The legal process of Continuance, which is prescribed by statute, involves legally moving the corporation's "home" from its original jurisdiction, at the federal level, to a new jurisdiction, that of a particular province. The corporation effectively ceases to exist under the laws of its original jurisdiction and becomes a provincial corporation, governed entirely by the applicable province's Business Corporations Act.

The process of Continuance may well appear complex, nevertheless, it is in fact a matter of undertaking a series of clear procedural steps, which requires an attention to detail and the necessary patience to follow through in a concise and focus manner. Having undertaken that process on many occasions, our law firm properly understands the procedural steps involved and how the dedicated work in facilitating a corporate migration from a federal corporation to a provincial corporation can greatly benefit the business' Canadian administration and operations, together with providing increased control and privacy to the parent corporation and its ownership.

To learn more about how our law firm stands apart when it comes to expanding your business into Canada, in what we do differently from most larger law firms and how this can properly protect and advance your Canadian commercial venture, contact our law firm today for a confidential initial consultation at Chris@NeufeldLegal.com or 403-400-4092 / 905-616-8864.  

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Partnering with Canadian Business (Joint Ventures): Forming a partnership or joint venture with a Canadian business partner is a common strategy for international companies looking to enter the Canadian market, and thereby leveraging local business knowledge, established networks, and resources while sharing the risks and costs associated with a new venture in a foreign country. Read more.

 

Acquiring a Canadian Business: The acquisition of a domestic Canadian buisness (corporation or partnership) by an international corporate enterprise requires local Canadian legal representation that is not afraid of addressing key legal issues associated with the target business, which all too often exist, yet due to serious inherent conflicts that we have previously identified within larger law firms, which can pose serious post-acquisition legal and financial problems that we are focused on addressing. Read more.

 

Hiring Employees and Contractors in Canada: Canada has distinctive employment laws at both the federal and provincial level, which impacts the hiring of employees and contractors in Canada, with some serious inherent conflicts that we perceive within larger law firms, making them unwilling or incapable of properly representing new foreign corporate entrants in their legal representation of employee and contractor hiring. Read more.

 

Tax Considerations when Expanding Business into Canada: Expanding your international corporate business into Canada involves navigating a complex landscape of federal and provincial tax laws, with the resultant tax implications heavily dependent on the selected Canadian business structure, its Canadian business activities, and particulars related to the home country from which the expansion is being undertaken. Read more.