Setting up daughter companies?


1

I have a federally incorporated company, lets call it Company INC, and a bank account for it. The company activity is listed as a technology company, but I want to branch out and do some more activities.

I want to do some things like, offer consulting services, sell gadgets, and sell software. Is there a way I can setup something like three daughter companies without having to incorporate three separate companies or three separate bank accounts? Will the taxation still be as one company or three companies?

So something like: ABC software, a division of Company INC?

This is for a Federally incorporated Canadian company. Any pointers or tips would be greatly appreciated.

Incorporation Canada DBA

asked Apr 6 '13 at 07:08
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1 Answer


2

US incorporation law often affords this option; several states have series LLCs, and the federal tax code recognizes qualified subsidiary s-corps (q-subs).

Canada's federal incorporation rules don't appear to allow for this. Without doing something fancy like creating a partnership among several corporations, you're just going to have to incorporate each subsidiary and use the "parent" corporation as the incorporator (which is legal in Canada).

If your intent is to limit liability between the entities, you ought to simply incorporate them all individually. The taxes and the regulations are a headache, but that's the cost for liability protection.

If you want to just operate under various trade names across Canada, however, then you should look into Canadian corporate naming laws. You can register multiple "operating-as" trade names.

answered Apr 6 '13 at 09:35
Blank
Chris
91 points
  • thanks for the pointer towards "operating-as" trade names. Let me have a look into that. – Stan Trying A Startup 6 years ago

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