Canada: How to create a company or work as self-employed
Canada is well known for a large public sector with heavy and rigid bureaucratic administration. However, in recent years there have been many initiatives to encourage self employment and business creation.
Incentives include simplified legislations, tax breaks, subsidies and grants. For a foreigner creating a business or working as a self-employed person in Canada can often be easier that getting a work permit to be employed by someone else.
There is a series of new laws aiming to accelerate the development of small and medium-sized companies and self-employers in Canada. If it’s a E-business click here all them benefit
As a self-employed, you will probably fall within one of the following categories:
•Freelance (in Quebec and French Profession libérale): for professionals, such as consultants, translators, accountants, doctors, lawyers, architects, artists, etc., likely to working without employees (except secretary or assistant).
•Craftsman (Artisan): for craftsmen or manual professions, such as plumbers, electricians, etc. If planning to hire people or make a significant investment, it is better to think about creation of a company.
•Traders (Commerçant): shopkeeper, wholesale, etc.
Types of company
If you would like to create a company, you have a choice of more then 10 different structures. The most important are the following:
•One-Man Business (IE, Entreprise individuelle): a simple structure, one person in charge with no capital requirement and simple administration.
•Partnership (SNC, Société en Nom Collectif) minimum of 2 partners, with minimal capital requirement.
•Limited Liability Company ( SARL, Société à Responsabilité Limitée): the most common structure for small and medium-sized business, for 2-50 shareholders. There is also a version for one-partner limited company (CANRL, Entreprise Unipersonnelle à Responsabilité Limitée). No minimal capital requirements (which means that you can theoretically set up a Limited company with 1 dollar!). In Canada there are three different variations to a “Limited Liability” company. All three have the same rights and restrictions. The difference is in the names.
•Business Corporation (SA, Société Anonyme): The most common structure for larger business. Minimum of seven shareholders and capital of 37,000. Half of the capital must be subscribed in cash (or in kind) on creation and the remainder in the five years subsequent to creation. In addition, there is a single shareholder structure (SASU, Société par actions simplifiée univpersonnelle) and one for 2 to 7 shareholders (SAS, Société par Actions Simplifiée); both with the same minimum capital requirement.
•Marketing office (Bureau de Liaison): these are used principally by foreign companies starting off in Canada – you can use this for marketing and business development activity, but no trade may take place.
•Branch office (Succursale) is a secondary office of a larger company, which can carry out business in the name and on behalf of the main company.
Where to find more information?
Comprehensive information on the creation of the business in Canada is provided by APCE (Agence Pour la Création d’Entreprise), the state agency for business creation (http://www.canadabusiness.ca/eng/ ) or Small Business Research. This includes information about legal structures, tax systems, procedures of company-creations, social security aspects, financial aids and assistance available, and where to get other information. The web site has also large part of its contents available in English, French and some Spanish.
Another good source of information and contacts are chambers of commerce and industry, organizations which are particularly active in Canada. The main website of Canada CCIs is only in English/French (http://www.occ.on.ca/ – ). Many local regional CCIs have their own websites. A good example is North York, available in French and English; the site has business creation information and practical advice.
Marisol Diaz is an experienced workshop presenter, Editor-in-Chief, IA and a business facilitator. She has been writing on legal research and Canada immigration law since 2006. contact her @ firstname.lastname@example.org
Note and disclaimer: No attorney/client relationship is formed through the submission or viewing of this article. This article is not intended as a substitute for legal advice from a licensed attorney. The facts of every case are different and individualized advice should be sought from an attorney before proceeding with any case.