No, you cannot set up an LLC in Canada as this form of business ownership does not exist here. The LLC is an American business structure.
Generally, in Canada there are four forms of business ownership:
- sole proprietorship
- partnership
- corporation
- and cooperative.
My guess is that people seeking the limited liability that an LLC provides would find the corporation the best approximation of an LLC in Canada. Corporations provide limited liability that sole proprietorships and most partnerships do not. See How to Incorporate Your Business in Canada for more on this business structure.
The only other form of business ownership in Canada that is available to the general public and offers limited liability is the Limited Partnership. In this business structure, the partners have limited liability depending upon their contribution to the partnership. Sometimes the only contribution a partner in a Limited Partnership makes is financial and he or she is not involved in actively running the business.
If you are considering forming a partnership, you will want to read 10 Questions Partnership Agreements Need to Answer.
Limited Liability Partnerships also exist in Canada but they are usually only available to groups of professionals, such as lawyers, accountants and doctors. The rules for who may or may not form a Limited Liability Partnership vary from province to province.
And Professional Corporations also exist. The Canada Business Corporations Act allows a number of regulated professionals to incorporate their practices, such as Chartered accountants, Certified general accountants, lawyers, some health professionals, social workers and veterinarians. However, "the ability to practice by means of a professional corporation will depend on whether the profession in question has had the necessary regulations and by-laws enacted" (Ontario Ministry of Government and Consumer Services).
