As your business expands, incorporation could be a logical next step. Incorporating your business in Ontario means creating a separate legal entity. Like an individual, a corporation has its own rights and responsibilities, including liability and protection, which extend to personal assets.
The incorporation process can be complex and detail-oriented. Many business owners choose to hire a lawyer for assistance, although this can be expensive. Fortunately, incorporating a business on your own is also an option.
Why Incorporate Your Business?
While some entrepreneurs and small business owners prefer to operate as sole proprietors or partnerships, there are certain situations where incorporating a business is beneficial or even necessary.
Should You Incorporate Your Business Yourself?
If you decide to incorporate, the next decision is whether to manage the process yourself or hire a lawyer.
Incorporating requires both time and money. While handling the process yourself can save on legal fees, it’s important to consider whether the time spent on paperwork and filing might be better invested in your business. In some cases, paying for legal services can be more cost-effective when factoring in the time saved and the additional guidance received.
Lawyers can also provide advice on structuring your corporation for maximum benefit, especially in terms of taxes. Decisions about directors, shareholders, and other corporate roles might make hiring a lawyer worthwhile.
However, another option exists: Webtaxonline offers an affordable way to incorporate your business, saving you time and money.
Incorporating in Ontario
Incorporating in Ontario means your corporation’s rights and benefits are limited to the province unless you also incorporate federally.
Ontario incorporations are governed by the Ontario Business Corporations Act (OBCA). Filing requires Articles of Incorporation, which include details such as the corporation’s name, directors, shareholders, and effective date. These documents are submitted as a Form 1.
How Much Does It Cost to Incorporate in Ontario?
The cost of filing incorporation materials in Ontario ranges from $300 to $360. Filing can be completed online, by mail, or in person.
Incorporating in Canada
Incorporating federally offers similar benefits to provincial incorporation but also protects your business name nationwide.
The first step is choosing a business name. This can be done through NUANS for a fee, and it’s recommended to check availability for both federal and provincial incorporations if pursuing both.
Your business name must meet three legal requirements:
- A Distinctive Element: A unique word or name specific to your business.
- A Descriptive Element: A term describing your business, such as “flower shop.”
- A Legal Ending: A designation of your business structure, such as Inc. or Ltd.
For example, a compliant business name might look like:
[Distinctive] + [Descriptive] + [Legal Ending] = Mabel’s Flower Shop Inc.
As with Ontario incorporation, Articles of Incorporation must be filed. This step can be complex, and outsourcing assistance may be beneficial.
How Much Does It Cost to Incorporate in Canada?
Federal incorporation typically costs $200 CAD, making it more affordable than provincial incorporation.
Post-Incorporation Requirements
Incorporating is not the final step. Maintaining your corporate status involves meeting legal obligations at both provincial and federal levels.
Key requirements include:
- Minute Book and Share Records: A record of official documents and activities.
- Company Updates: Updates to corporate information as required.
- Annual Returns and Resolutions: Submitting mandatory filings and records annually.
The minute book typically includes:
- Initial Corporate Bylaws
- First Director Resolution
- First Shareholder Resolution
- Director Consent
- Subscription for Shares
- Shareholder Register
- Shareholder Ledger
- Digital Notices of Uncertified Shares
- Other documents required by law
Let WebtaxOnline Help You Incorporate
Using Webtaxonline to incorporate your business can save significant time and money. They guide you through each step of the incorporation process in Ontario. Additionally, Webtaxonline provides access to exclusive perks to help set your corporation up for success.
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