Introduction
Are you a small business owner in Ontario looking to take your venture to the next level? Incorporating your business may be just what you need! Not only does incorporation protect personal assets, but it can also open up opportunities for growth and expansion. However, the process of incorporating can seem daunting at first glance. That’s where we come in – this step-by-step guide will walk you through how to incorporate your business in Ontario and reap all the benefits that come with it. Let’s get started!
Why Incorporate Your Business?
Incorporating your business is a crucial step in establishing it as a separate legal entity from yourself. This means that the company will have its rights, responsibilities and liabilities that are distinct from those of its owners. By doing so, you can protect yourself and your assets if any lawsuits or debts arise.
Incorporating also adds credibility to your business by making it look more professional and established. It creates an impression that the company is well-organized, trustworthy and serious about conducting legitimate operations.
Benefits of Incorporating in Ontario
Incorporating your business in Ontario can bring a lot of benefits that you may not be aware of.
- One of the most significant advantages is limited liability. By incorporating, your business becomes a separate entity from you as an individual, meaning that in case of any legal or financial issues, only the assets owned by the corporation are at risk.
- Another advantage is tax savings. Corporations in Ontario pay lower taxes compared to individuals on their income and capital gains, which means more money stays within your business for growth and expansion.
- Moreover, incorporating gives credibility to your brand by adding “Inc.” or “Ltd.” after your company name. This designation can attract potential investors and clients who prefer doing business with established corporations rather than sole proprietorships or partnerships.
- Furthermore, incorporation provides perpetual existence which means that even if one shareholder leaves or passes away, the corporation will continue to exist as long as there are still shareholders remaining.
These benefits show why it’s important for businesses to consider incorporating in Ontario for long-term sustainability and success.
How to Incorporate in Ontario?
Incorporating your business in Ontario can be an exciting and overwhelming experience. However, with the right knowledge and guidance, you can easily navigate through the process.
- The first step to incorporating your business is choosing a name for your corporation. You will need to conduct a NUANS (Newly Upgraded Automated Name Search) search to ensure that no other corporation has the same or similar name as yours.
- Next, you’ll need to determine who will be the directors of your corporation. In Ontario, at least 25% of directors must be Canadian residents. You’ll also need to appoint a resident agent who will act as a liaison between your corporation and the government
- After this, you’ll complete and file Articles of Incorporation with Corporations Canada along with paying appropriate fees. Once approved by Corporations Canada, you’ll receive a certificate of incorporation which confirms that your business has been legally incorporated.
- After obtaining all required permits and business licenses from relevant authorities like CRA (Canada Revenue Agency), Employment Standards Branch etc., it’s time to start operating your newly incorporated business!
By following these steps diligently and seeking professional advice where necessary, incorporating in Ontario should be smooth sailing!
Requirements for Incorporating in Ontario
Before incorporating a business in Ontario, it’s important to understand the requirements.
- The first requirement is choosing a unique name for your newly started business in Ontario and ensuring that it complies with the naming guidelines provided by the government of Ontario. This includes avoiding names that are too similar to existing businesses or trademarks.
- Next, you’ll need to select directors for your corporation who will be responsible for managing its affairs. At least 25% of your directors must also be Canadian residents. You’ll also need to determine the number of shares authorized and issued by your corporation.
- In addition, you’ll need to prepare articles of incorporation outlining details such as share structure, restrictions on business activities and other provisions related to governance and management. These articles must comply with federal laws under Canada’s Business Corporations Act (BCA).
- It’s important to note that corporations may also require additional licenses or permits depending on their specific industry or sector.
After fulfilling all requirements, you can submit an application for registration along with the required fee through online platforms like ServiceOntario Business Registration Online (BRO) or third-party service providers specializing in corporate registrations in Ontario.
Fees Associated with Incorporating in Ontario
When incorporating or registering a business in Ontario, it is important to consider the fees associated with the process. These fees can vary depending on several factors such as the type of corporation being formed and whether you are using a service provider or doing it yourself.
- The first fee you will encounter is the fee for reserving your chosen business name. The cost for this is $60 and must be paid at the time of application submission. It’s important to note that this fee is non-refundable regardless of whether your application gets approved or not.
- Next up are government filing fees, which vary based on the type of corporation being formed. For example, if you’re forming a federal corporation, there’s an initial filing fee of $200 plus an additional $250 for expedited processing. On top of that, there are annual maintenance fees ranging from $20-$200 depending on factors such as revenue and number of directors.
- In addition to government fees, there may also be legal and accounting fees involved in setting up your corporation properly. It’s always recommended to consult with professionals who specialize in incorporation services as they can guide you through all necessary steps and reduce potential errors which could cost more down the line.
- While incorporating in Ontario can come with some costs upfront; it presents numerous benefits – including limited liability protection – that make these expenses worthwhile investments into your business’s future success!
Common Mistakes to Avoid
Incorporating your business in Ontario can be a complex process, and there are several mistakes that you should avoid to ensure a smooth transition.
- One of the most common mistakes is failing to conduct proper research before incorporating. It’s important to understand the legal requirements and regulations for incorporation in Ontario.
- Another mistake is not having a clear understanding of your business structure. Choosing the wrong type of entity or not properly defining roles and responsibilities among shareholders can lead to complications down the line.
- It’s also essential to carefully review all documentation before submitting it for approval. Simple errors or omissions on paperwork can lead to significant delays in processing time or even rejection of your application.
- Failing to obtain necessary permits, licenses, or registrations is another common mistake that businesses make during the incorporation process. This oversight can result in fines, penalties, or legal consequences for non-compliance with local laws and regulations.
- Neglecting ongoing compliance requirements after incorporation is complete can put your company at risk. Failure to file annual reports, maintain accurate records, and meet other ongoing obligations could result in loss of good standing status or even dissolution of your corporation.
By avoiding these common mistakes when incorporating in Ontario, you’ll be well on your way toward building a successful and compliant business entity!
Conclusion
Incorporating your business in Ontario can seem like a daunting process, but with the right information and guidance, it can be a straightforward and beneficial decision. By incorporating, you gain protection for your assets, credibility with customers and suppliers, as well as tax benefits.
Remember to carefully consider the legal structure that best suits your business needs and seek professional advice if necessary. Follow the required steps outlined by the Ontario government website when incorporating to ensure you have all of the necessary documentation in order.
Taking these steps will not only offer peace of mind for yourself as a business owner but also provide stability and assurance for clients/employees who want to work with an established organization.
Incorporating is one of many essential decisions you’ll make regarding your new or existing company. However, once completed successfully – this step sets up opportunities for long-term growth while ensuring that everything runs smoothly from day-to-day operations onwards.
FAQs on how to incorporate in ontario
1. How much does it cost to incorporate yourself in Ontario?
To incorporate a business online or by mail in Ontario costs CAD 300. The registration of your business name will cost you an extra $60. Quebec: The cost of incorporating in Quebec is CAD 367, with a further $50 for a business name search.
2. Can I incorporate myself in Ontario?
There are two options for incorporating a business in Ontario. You have two options for creating and submitting the Articles of Incorporation: either manually or through a third-party portal.
3. What is needed to incorporate in Ontario?
Articles of Incorporation must be filed to incorporate in Ontario, which is governed by the Ontario Business Corporations Act (OBCA). The name of the corporation, the directors who will serve, the stockholders, and the effective date should all be listed in the articles of incorporation. All of this is included and a Form 1 must be submitted.
4. How long does it take to be incorporated in Ontario?
For firms in Ontario, the full procedure can be finished in two to three business hours. That’s because the documents for incorporation are submitted automatically. The procedure takes a little longer for federal corporations.
