“extraprovincial registration” has a bizarre ring to it but when Business Ready received the below question from a BC incorporated company through our contact us form we decided to address it.
do we need to register as an extra-provincial corporation with Ontario? We’re not sure because we now have someone working in Toronto.
Well, let’s tackle what extraprovincial registration is. Whether you have a federal or provincially incorporated company it must be registered in each province in which it carries on business. If you have incorporated federally you have a constitutional right to carry on business anywhere in Canada under your own name. But in this case the company is a B.C. incorporated company so when they want to expand into other provinces (e.g. Ontario) they need to register their name in these other provinces (as well as get tax ID numbers to charge provincial tax, etc.). If the name is being used by someone else in the other province you will have to register under a different name.
so, what constitutes “carrying on business”?
The definition varies from province to province but it’s safe to say that if you have people (employees, service people or independent sales/service agents) or property (inventory, offices, warehouses) you have a substantial physical presence and are carrying on business in that province. Remember, a corporation does not carry on business in Canada or a province merely because it takes orders for or buys or sells goods - you have to have a ‘presence’. If you are in doubt, contact the provincial registrar and describe your particular situation.
When we received the above question my follow up question was to ask them to describe “working in Toronto”. Was the person living there? working out of a home office? or traveling to Toronto to help provide services to a client? After we chatted the person is indeed working out of a home office in Toronto and therefore is deemed to be carrying on business in that province on behalf of the company.
how do we register then?
Well, our happy federal government folks have provided a site to help you register in other provinces. And remember you are not just registering your name in that province (if you are provincially incorporated) you also need to be charging and remitting the provincial sales and use tax as well as being aware of employment standards that exist in that province.
Good luck!
2 comments ↓
This is wrong. Read the act. A company incorporated in another province does not need to register in Ontario. Only file an initial return. A company incorporated outside Canada must register extraprovincially in Ontario.
Thanks snash for the guidance. Could you provide the act for our readers so we make sure to point them in the right direction? Our understanding is that they have to register in order to charge PST and other requirements of operating in the province.
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