There is a possibility that you can start up a Canadian business with some added support from an American company. That is, you can get an American business to provide you with support for getting your new business to run.
However, you will need to ensure that your Canadian business meets a number of key standards to allow yourself to keep your business running properly. These standards are essential to follow when it comes to running your business the right way. These points must work regardless of the type of business you are trying to operate.
Incorporate Within Canada
You must show that your business is fully incorporated in Canada if you want support form an American company. That is, you have to allow your manufacturing or service functions to fully work within Canada and to work with Canadian citizens in mind. You have to also employ Canadian works for your efforts. This is all to see that your business is working with Canada in mind first.
What About Funds?
An American company can provide you with plenty of funds to keep your business working. Your American investor may also take in a small share of your business. However, the American entity cannot take in more than a third of your business stake in most cases. This is to ensure that your business is specifically within Canadian control.
Also, the American investor will have to pay one’s funds in Canadian dollars. This means that the American investor will be subjected to the currency exchange rates and rules that come with running the business.
Who Can Make Decisions?
The Canadians who are in charge of running the business should be the ones that are allowed to make decisions relating to how the company is run. The American investors will not be able to get any control over how the business is to operate. This rule is important as it ensures that a business in Canada will continue to work with Canadian control. This is to help with supporting the country and to see that people within the country works with the particular economic standards and points that the country is known to work with.
It is a necessity for businesses that want to incorporate and do work in Canada to watch for what they are doing when dealing with American companies. An American investor or entity can support a business but the rules associated with doing so might be limited depending on what happens at a given time.
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