What is a Federal Holding Company?
A Federal Holding Company in Canada is a corporation incorporated under the Canada Business Corporations Act (CBCA) that primarily exists to hold the outstanding stock of other companies. This type of company does not produce goods or services itself but instead owns shares in other companies to control their policies and management.
The primary purpose of a holding company is to manage the investments in its subsidiary companies. This structure allows the parent holding company to exercise control over its subsidiaries and centralize the management of their assets, operations, and strategic planning.
What are the benefits of Federal Holding Company?
- Limited Liability: Like other corporations, a federal holding company offers limited liability protection. This means that the holding company’s liability is generally limited to its investment in the subsidiaries, and it is shielded from the subsidiaries’ debts and obligations.
- Control and Management: By holding a majority of shares in other companies, a holding company can influence or direct the business decisions and policies of its subsidiaries.
- Asset Management: Holding companies manage and protect the assets of their subsidiaries. They can pool resources, optimize asset allocation, and streamline financial management across multiple entities.
Who can start a Federal Holding Company?
- One or more individuals above the age of 18;
- 25% of directors must be a Canadian Citizen or a Permanent Resident (PR).
Requirements:
- Minimum one incorporator, director, shareholder and officer.
- The registered office address must be a physical address in Canada, P.O. Box address is not allowed. If you don’t have a local provincial address, we provide registered address and mail scanning service.
- A Federal Holding Company, although registered federally, must also register in the province or territory where the corporation is conducting business.
Incorporation Steps:
Step 1. Name your corporation.
Choose if you want a numbered or a named corporation. A numbered name is the simplest way to name your corporation because the Government assigns the number (for example, 12345678 Canada Inc.)
A Federal NUANS report and name Pre-approval is required to register a Named Corporation.
Your company can be named and have a unique name that sets you apart from your competition. Please include the legal suffix like Inc./Ltd./Corp. at the end of your name. For further details on the regulations for naming a corporation, please refer to this link.
Step 2. Select your articles of incorporation:
This step establishes the structure of your corporation. Choose the right share structure:
- Basic: with unlimited common shares with no specific share class.
- Standard: common shares with class A voting and class B non-voting.
- Custom: this share structure allows to categorize shares into many types such as common, preferred, voting, non-voting etc.
Step 3. Establish the office address:
- The registered office address must be a physical address in Canada, P.O. Box address is not allowed.
- You are allowed to have a legal land description address too but must have a P.O. Box connected to it.
- If you don’t have a local provincial address, we provide registered address and mail scanning service.
Step 4. Decide who will be a director, shareholder, officer and Incorporator.
Director – the head of the corporation. You can add up to 10 directors.
Shareholder – owns the corporation and receives profit from the business as dividends and shares.
Officer – anybody including an employee, no decision making power.
Incorporator – is the person under whose authority the corporation is created. Is not changeable.
Mandatory items to run a business.
- Minute book: consists of bylaws, share structure, minutes & other legal sections. Without it, a corporation is not complete.
- Initial Return: It’s a mandatory filing with Service Ontario for each new corporation. It has to be filed within 60 days of Incorporation. It confirms the details of the corporation. It is not a tax filing with CRA.
- Business Number: It is a unique identification of your business with the Canada Revenue Agency. It is required to register accounts like GST/HST, Payroll, Import/Export accounts.
- Corporate Tax ID: It is like a SIN number for a corporation.
- HST Registration, Harmonized Sales Tax: If you are selling goods and collecting HST you must have an HST account. every time a business incurs an expense – be it rent or paying for goods – it pays HST, if you set up the account, you can claim it back.
- Payroll Account: If you have employees, including yourself, you must set up a payroll account.
- Import/Export: If your goods or raw materials cross the Canadian border, you are required to clear customs using the Import/Export account.
- WSIB Account: It’s the Workplace Safety and Insurance Board registration. If your corporation has employees (except directors and shareholders) you must register for WSIB.
- Annual Return: A corporation must file its Annual Return with the Government every year to keep it active. You may add Annual Return to your package to avoid the risk of forgetting it. We will take care of it!
You can find out more information about annual return here:
How do we process the order?
- We start by verifying the payment and reviewing the order to ensure an error-free application.
- For named companies, we conduct name searches, make reservations, and obtain name approval.
- Next, we prepare the application and articles of incorporation.
- Before registering the corporation, we send a draft for a final check.
- Once approved, we register the corporation according to the chosen queue and promptly email all registration documents to the customer.
- Finally, we complete any additional services included in the package, such as initial returns and CRA accounts.
Timeline
The standard incorporation time for a Federal Holding Company is ten business days. However, for an additional fee, we can expedite the process and complete it within just two business hours. Please be aware that the turnaround time is until 3 p.m. EST. The processing queue includes incorporation and emailing the Certificate, Articles and Electronic Minute Book (if included).
The remaining processes in this package like Business Number, CRA programs accounts set up, WSIB registration, etc. are initiated after incorporation processes.
What will you receive?
After the registration is completed we will send you a Certificate and Articles of Incorporation and an Electronic Minute Book (if included) by an email.
Why choose us?
- Our team of legal professionals and incorporation experts can establish your corporation within two business hours!
- Our online form offers the option to select, customize, and build your bundle according to your preferences. Simply complete the straightforward form on our website, and we’ll handle the rest.
- With a wealth of experience in business incorporation, we pride ourselves on guiding entrepreneurs through the process with expertise and precision.
- Online Business Registry is an official intermediary for Ontario Province and a registered member of Corporations Canada.
- Our team of legal professionals and incorporation experts can establish your corporation within two business hours!
- Our online form offers the option to select, customize, and build your bundle according to your preferences. Simply complete the straightforward form on our website, and we’ll handle the rest.
- With a wealth of experience in business incorporation, we pride ourselves on guiding entrepreneurs through the process with expertise and precision.
