Federal (Canada) Corporations, are incorporated pursuant to the Canada Business Corporations Act and have the constitutional right to carry on business anywhere in Canada under their registered corporate name, subject to registration requirements in each province or territory.
Provincial Corporations are incorporated pursuant to the applicable provincial corporate statute, only have the right to carry on business within the province or territory of incorporation. (i.e. an Ontario Corporation can only carry on business in the Province of Ontario).  Provincial corporations can however make an extra-provincial registration to carry on business in another province or provinces (i.e. if an Ontario corporation wants to set up offices in Alberta it could apply to the Province of Alberta for registration as an extra-provincial corporation in Alberta).

Another important difference between a federal and a provincial corporation is the scope of protection given to the name of the corporation.   Incorporating federally under the Canada Business Corporations Act (CBCA), provides protection for corporate names across Canada.  Once a particular corporate name is registered as a federal corporation, no one else may use that name or a confusing name for their corporation anywhere in Canada.  This federal corporate name protection is second only to trademark protection in terms of its scope and effectiveness for protecting business names.  Because of the scope of corporate name protection provided under the CBCA, proposed corporate names are thoroughly scrutinized by the federal Corporations Directorate according to strict name granting guidelines.  As a result, many names that would be acceptable for corporate registration provincially are rejected by the Corporations Directorate as being too vague or non-descriptive of the business.

Provincial incorporation provides corporate name protection only within the province or territory of incorporation.  If you are intending on operating your corporation within the one province or territory, this should not be an issue for you to worry about.  If you intend to incorporate provincially and then register the corporation extra provincially in another province or territory at a later date, you may be disappointed to find out that your corporate name or a similar one, has already been registered in the other province, and you will have to choose a new name for the other province.

In deciding which jurisdiction to register, prospective incorporators should ask themselves the following questions:

1. Where will the corporation carry on business?  In one or more provinces, or across Canada?
2. Is federal name protection important for the business?  Will the corporate name be used in other provinces or territories?
3. Is the corporate name unique enough to justify protecting it with federal incorporation?
4. Will you decide to incorporate additional companies in the future?  If so, it is generally recommended t incorporate these new companies in the same jurisdiction as the first corporation, so that future corporate changes can be made cheaply and easily.

Pre-Approval of Name

The name granting guidelines used by the Federal Corporations Directorate are the most stringent of any jurisdiction in Canada.

The big disadvantages of incorporating at the Federal Jurisdiction is the extra time (usually 2 or 3 days) taken to get a name that is acceptable to Corporation's Canada. 

Cityfax will not work to Incorporate a client, with the Federal Jurisdiction, without first applying for the Pre-Approval of name chosen.   We will forward your NUANS® report, together with a Corporate Name Information Form, to Corporations Canada requesting a name decision letter in advance of filing your articles of incorporation.  If name choice is accepted, we will proceed with preparing and filing the articles of incorporation.
If name choice is rejected (finding a name that is acceptable can be frustrating) you will have saved the cost of the Government fees of submitting Articles of Incorporation that are returned.
Your additional costs will Only be the cost of a new NUANS® report for an alternate name, that will also be submitted for "Pre-Approval".

Advantage

• The government fees for incorporation are only $200.00
• The Examiners with Corporations Canada will check your corporate name against all corporations, business registrations (Master Business Licenses) and trademarks across Canada.  This gives even better protection to businesses that already exist and provides the new incorporator with the assurance that the company name is available throughout Canada.
• If at some point you decide you want to register your corporation in other Canadian Provinces, with your Federal Corporation, you will have already ensured the name availability.
• With a Federal Incorporation only 25% of the directors are required to be Canadian Citizens.

Disadvantages

• It can take up to one week longer than an Ontario Incorporation.
• Finding a name that is acceptable to Corporations Canada can be time consuming and frustrating.  The name must be specific.
• There is a $50.00 annual fee for Government Filing, even if no charges are made to the Corporation.
  
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