Unlike in the United States, companies in Canada can incorporate at either the federal level or the provincial level.
At the federal level, the company is incorporated under the Canada Business Corporations Act, while at the provincial level, the company is incorporated under the respective province’s legislation. In Alberta, provincial incorporation falls under ABCA.
There are several differences between the two forms of incorporation. Federal incorporation grants a company an increased base to do business anywhere in Canada. Provincially incorporated companies can only do business in their respective provinces.
The process of approving a business’ name is also different. At the federal level, before incorporation, the company’s name will be cross-checked through a nationwide database to ensure it isn’t similar to any other company name in Canada. This gives reassurance that the business can transact in any province under the same name. Provincial incorporation name searches, on the other hand, are limited to the respective province.
Additionally, federally incorporated companies have to file more annual paperwork with the Director of Corporations Branch, and the process of federal incorporation is more expensive than provincial incorporation.