Business owners, looking to form a Limited Liability Company (LLC) in Canada are seeking the many benefits an LLC offers. An LLC in Canada is able to sign contracts in the business name. This can include signing the contract for real estate in the LLC business name. Since it is its own separate legal entity, income tax returns must be filed in the business name and not in the members' returns. An LLC in Canada can also protect the members from personal lawsuits on behalf of the business entity.
Conclude which way you want to file your LLC. First choose if you want to establish a federal or Province LLC entity. A federal LLC allows you to operate your business across Canada, yet it is more expensive than starting an LLC business in one or more Provinces. A Province LLC is only allowed to conduct business in the area in which it is registered.
Narrow down your choices and reserve your business name. First determine if you want your LLC to be represented by a number or a name. If you choose to be known by a number, then you can reserve one by clicking the link in the Resources section.
You can choose to reserve a name before submitting your LLC paperwork. Another option is to wait until you file for your LLC business. Create at least three names for your business. Even though you may only need one name, the extra names can be used as back-up in case the original name is already in use. The initials LLC, L.C. or some similar acronym must be used to identify your business entity as an LLC. In addition, you must also submit all information leading to the name decision. The cost will be $20 if done on line.
Fill out LLC documents and submit them. When forming a Canadian LLC business, there are three forms that must be completed. These three are the Articles of Incorporation, Initial Registered Office address and first Board of Directors, and a Newly-Upgraded Automated Name Search (NUANS) report. The cost of filing the documents on line is $200, or $250 if you submit them by other means.
The Articles of Incorporation is a set of regulations and laws that will govern how your business runs. This includes stating how each member's responsibility is used for the purpose of the LLC. It also specifies all information on how shares of the company will be handled.
The Initial Registered Office address and First Board of Directors form will consist of questions concerning office address, name of all directors, and must include all member signatures. If you are registering a name, you will need to include the NUANS report stating your name.