🇨🇦 Annual Compliance — Canada

Incorporating federally without meeting the 25% Canadian-resident director requirement

Fix: The CBCA requires at least 25% of directors (at least one if the board has fewer than four) to be Canadian residents. If no founder qualifies, consider incorporating provincially in British Columbia or Nova Scotia, which have no residency requirement. Alternatively, appoint a qualified Canadian resident as a director.

Failing to register extra-provincially when operating in multiple provinces

Fix: Both federal and provincial corporations must register extra-provincially in each province where they carry on business. Failure to register can result in fines and the inability to enforce contracts in that province. File the extra-provincial registration as soon as you begin operations in a new province.

Not claiming the SR&ED tax credit for qualifying R&D activities

Fix: The SR&ED program provides refundable tax credits of up to 35% for CCPCs on the first CAD 3 million of qualifying expenditures (15% for larger companies). Many tech companies miss this because they assume their work does not qualify. SR&ED covers systematic investigation through experiment or analysis — including software development that involves technological uncertainty. Engage a SR&ED consultant to assess eligibility.

Ignoring GST/HST registration when turnover exceeds CAD 30,000

Fix: GST/HST registration is mandatory when worldwide taxable supplies exceed CAD 30,000 in any single calendar quarter or over four consecutive calendar quarters. The threshold is lower than many founders expect. Register proactively through your CRA Business Account to avoid backdated assessments.