Most common business entity in Canada
The Corporation (federal/provincial) is the standard choice for most small- to mid-size businesses in Canada. Like a US LLC, it provides limited liability protection separated from the owners' personal assets. Federal incorporation Corporations Canada CA$200. NUANS name search ~CA$30. BC/Alberta have no director residency requirement.
The full menu of Canada business structures
| Structure | Liability | Tax | Best for |
|---|---|---|---|
| Corporation (federal/provincial) | Limited | 25% corporate | Most operating businesses |
| Sole proprietor / self-employed | Unlimited personal | Personal income tax rates | Freelancers, one-person services |
| Partnership | Joint and several | Pass-through to partners | Professional services (law, accounting) |
| Branch of foreign company | Parent company liability | 25% on Canada-source profits | Foreign companies entering Canada market |
| Public limited company | Limited | Same as Corporation (federal/provincial) but stricter | Companies preparing for listing |
Which one should you pick?
- Freelance or one-person service in Canada? Self-employed structure if simple, Corporation (federal/provincial) if you want liability protection.
- Software / e-commerce / agency? Corporation (federal/provincial) — standard, scalable.
- Operating an existing foreign company in Canada? Branch (simpler) or subsidiary Corporation (federal/provincial) (more substance).
- Planning to raise venture capital? Confirm investors accept Canada entities. Many require a US Delaware C-Corp flip — see US company formation.
- Holding company for IP or other companies? Corporation (federal/provincial) with minimal substance requirements.
The Corporation (federal/provincial) in one paragraph
Corporation (federal/provincial) is Canada's primary limited liability vehicle. Minimum paid-up capital: nominal. Headline corporate tax: 25%. ~15% federal + 9-16% provincial = 25-31% combined. Small Business Deduction → ~9% federal on first CA$500k.. Banking accessibility: 9/10. Privacy: 4/10 (UBO non-public). Remote formation: yes. Processing time: 1 business day.
For US comparison, see Canada vs USA. For non-resident formation specifics, see forming a Canada company as a non-resident.