When you incorporate your business in Canada, you have two options: incorporate under the laws of Ontario, or incorporate federally under the Canada Business Corporations Act (CBCA). Both create a valid Canadian corporation. Both give you limited liability protection. But there are meaningful differences between them — and the right choice depends on how and where you plan to operate.

Here is a plain-language breakdown.

Ontario Incorporation

If you incorporate under the Ontario Business Corporations Act (OBCA), your corporation is a creature of Ontario law. It can operate anywhere in Canada, but if you want to do business in another province — say, you expand into British Columbia or Alberta — you will generally need to register as an extra-provincial corporation in each new province.

Ontario incorporation is slightly faster and less expensive than federal incorporation. The Ontario Business Registry filing fee is lower than the federal fee, and the process is straightforward.

Ontario incorporation is usually the right choice if:

  • Your business operates primarily in Ontario
  • You don't have immediate plans to expand nationally
  • You want a lower upfront cost
  • You want a slightly simpler ongoing compliance process

Federal Incorporation

A federal corporation is incorporated under the CBCA and can operate across Canada without needing to register as extra-provincial in each province — although you still need to register in each province where you have a physical presence or employees.

One practical advantage of federal incorporation is name protection. A federally incorporated company's name is protected nationally, not just within Ontario. If your business name is important to your brand and you want to operate across the country, federal incorporation gives you broader name protection.

Federal incorporation is usually the right choice if:

  • You plan to operate in multiple provinces
  • National name protection is important to you
  • You are raising investment and want a nationally recognized corporate structure
  • You want the prestige or perception of a national entity

The Practical Differences at a Glance

Cost: Ontario incorporation has lower filing fees. Federal incorporation has higher upfront fees but similar ongoing costs.

Name protection: Ontario protects your name only within Ontario. Federal protects your name across Canada.

Operating in other provinces: Both require extra-provincial registration to operate in other provinces — but a federal corporation has a slight advantage in recognition and process.

Ongoing compliance: Both require annual resolutions and filings. Federal corporations have a few additional requirements, including maintaining a registered office in Canada and specific restrictions on director residency (which have been relaxed under recent CBCA amendments).

Director residency: The CBCA previously required a minimum number of Canadian-resident directors. Recent amendments have removed or relaxed these requirements for many corporations — but this is worth confirming at the time of incorporation.

"For most Ontario-based small businesses and startups, Ontario incorporation is the simpler and more cost-effective choice."

What About a Numbered Company?

Both Ontario and federal corporations can be either named (e.g., Solvine Law Professional Corporation) or numbered (e.g., 1234567 Ontario Inc.). A numbered company is faster and cheaper because there is no name search required. Many businesses incorporate as a numbered company first and then change the name once they have settled on branding.

The Bottom Line

For most Ontario-based small businesses and startups operating primarily in Ontario, Ontario incorporation is the practical choice. It is less expensive, simpler, and sufficient for the vast majority of businesses.

If you are building a national business, raising institutional capital, or the cross-Canada name protection matters to your brand, federal incorporation is worth the extra cost and complexity.

Still not sure? Solvine Law handles both Ontario and federal incorporations at flat fees, and we are happy to talk through the right structure for your specific situation. Book a free 15-minute call and let's figure it out together.