Incorporation Guide
Last updated 2026-08-22. A practical guide from CorpStart, document preparation specialists for Ontario and federal corporations.
Ontario incorporation (OBCA) is faster, costs $100 more in government fees than federal, and has no director residency requirement, making it ideal for businesses operating primarily in Ontario. Federal incorporation (CBCA) provides coast-to-coast name protection and simpler multi-province expansion, but requires at least 25% of directors to be resident Canadians.
An Ontario corporation is created under the Ontario Business Corporations Act (OBCA) and regulated by the Ontario government. A federal corporation is created under the Canada Business Corporations Act (CBCA) and regulated by Corporations Canada (a federal agency). Both create a separate legal entity with limited liability; the choice is primarily about jurisdiction, name protection scope, and ongoing compliance obligations.
For most small and medium Ontario businesses, an Ontario corporation is the simpler, faster starting point. Federal corporations make more sense when a business plans to operate across multiple provinces from day one, or when national brand name protection is a priority.
Ontario eliminated its director residency requirement on July 5, 2021 (Bill 213, Better for People, Smarter for Business Act). Ontario corporations now have no requirement for any director to be a Canadian resident. Non-residents can serve as the sole director of an Ontario corporation.
Federal corporations under the CBCA still require at least 25% of directors to be resident Canadians. For a board of fewer than four directors, at least one director must be a resident Canadian. Corporations in regulated sectors (airlines, telecommunications, certain cultural industries) require a majority of resident Canadian directors. This is a meaningful constraint for founders who are not Canadian residents or permanent residents.
A federal corporation's name is protected coast-to-coast across all provinces and territories. An Ontario corporation's name is protected only within Ontario, so another business could register the same name in another province.
If your brand name matters nationally, a federal named corporation provides stronger protection. If you operate in Ontario only, Ontario name protection is typically sufficient and easier to obtain.
Ontario online filing through the Ontario Business Registry is processed immediately; your Articles of Incorporation are issued the same day. Federal online filing through Corporations Canada takes approximately 1 business day (express service is available for an additional $100 for 4-business-hour processing).
The Ontario government filing fee is $300; the federal filing fee is $200. However, federal corporations that operate in Ontario must also register extra-provincially with Ontario (additional fee and time), which often makes the total cost comparable or higher for Ontario-focused businesses.
Ontario corporations file an Annual Return with the Ontario Business Registry each year. Federal corporations file an Annual Return with Corporations Canada and must also maintain extra-provincial registration in each province where they carry on business (including Ontario), each with its own annual filing requirement.
Federal corporations also face more complex initial setup if they have non-Canadian-resident directors, because of the 25% resident-Canadian director rule. Ontario corporations have no such constraint since the 2021 repeal.
Ontario (OBCA) vs. Federal (CBCA): Key Differences
| Factor | Ontario (OBCA) | Federal (CBCA) |
|---|---|---|
| Government filing fee | $300 | $200 |
| Processing time (online) | Immediate (same day) | ~1 business day |
| Director residency requirement | None (eliminated 2021) | ≥25% must be resident Canadian |
| Name protection scope | Ontario only | All provinces & territories |
| Extra-provincial registration needed? | No (for Ontario ops) | Yes, in each province of operation |
| Non-resident sole director? | Allowed | Not allowed (≥1 Canadian required) |
| Annual return filing | Ontario OBR | Corporations Canada + each province |
Can a non-resident incorporate federally in Canada?
Yes, but the CBCA requires that at least 25% of directors (or at least 1 director for boards under 4) be resident Canadians. A non-resident can be the majority shareholder and hold officer roles, but the board must include at least one resident Canadian director. Ontario has no such requirement since 2021.
Does a federal corporation need to register in Ontario if it does business there?
Yes. A federal corporation carrying on business in Ontario must register extra-provincially with Ontario, and there is an additional government fee and filing requirement. This extra step (and cost) is why many Ontario-focused businesses choose to incorporate provincially.
Can I convert my Ontario corporation to a federal corporation later?
Yes, through a process called continuance (or export/import). The corporation continues its legal existence under the new federal jurisdiction. CorpStart can advise on whether continuance makes sense for your situation; it is a more complex filing than a standard amendment.
Which incorporation does CorpStart recommend for a startup?
For most Ontario-based founders (especially those without cross-Canada operations from day one), an Ontario OBCA corporation is the faster, simpler, and often lower total-cost option. If you have non-resident co-founders who need to serve as the sole director, Ontario's lack of a residency requirement is a decisive advantage. CorpStart offers both; we are happy to walk through the specifics.
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Start my corporationCorpStart is a document preparation service, not a law firm. The information on this page is general in nature and does not constitute legal advice. For advice specific to your situation, consult a licensed lawyer.