Incorporating a Business? Incorporating in N.S. Will Soon Be More Attractive
September 10, 2018
As of January 2019, incorporating a limited company in N.S. will be more economical. On September 7, 2018, the N.S. government announced it’s making three changes to its incorporation laws (amending the N.S. Corporations Registration Act and a regulation under the N.S. Companies Act):
- Cheaper Incorporation. Effective January 2019, the fee to incorporate a limited company in N.S. will drop by $136.40, from $336.40 to $200.00.
- One Year Free Annual Registration. Effective January 2019, the province will waive the annual registration fee of $118.35 in the first year of incorporation.
- Faster Service. Effective immediately, it will take only three days, instead of five to 10 days, to complete an incorporation through standard paper filing. However, McInnes Cooper files incorporations electronically, which further expedites this process.
These changes and the N.S government’s communications around them reflect competition among federal and provincial governments to attract businesses of all sizes to set up shop with attractive corporate law regimes. Both the federal incorporation regime (the Canada Business Corporations Act or CBCA) and the P.E.I. incorporation regime have recently undergone changes to modernize them – and make them more attractive. Here are three ways in which the N.S. changes could affect incorporation decisions of businesses:
Where to Incorporate. Deciding where to incorporate is a key decision for start-ups and small-and-medium-sized businesses (SME). It’s also a decision for larger corporations that are forming new subsidiaries or entering the Canadian markets for the first time. In Canada, a business can incorporate under federal or under provincial laws, and if provincial then effectively choose most any Canadian province. The reduced time and cost to incorporate in N.S., coupled with the waiver of the first annual registration fee, could tip the balance in favour of N.S.
When to Incorporate. Deciding when to incorporate is another key decision, particularly for start-ups and SMEs. Generally, start-ups or SMEs contemplating incorporation would look to do so before year-end; however, these changes may cause some to hold off until January 2019 to take advantage of the cost reductions.
Who Incorporates. The changes will benefit businesses of all sizes (a savings of $136.40, plus the $118.35 registration fee, might seem small for some corporations, in complex transactions it can add up). The greatest beneficiaries, however, are likely to be start-ups and SMEs, for which every dollar can count, especially in the early stages.
Please contact your McInnes Cooper lawyer or any member of the Corporate & Business Team @ McInnes Cooper, the Start-up Team @ McInnes Cooper or the Small Business Team @ McInnes Cooper or to discuss this topic or any other legal issue.
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
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