Incorporating yourself in Ontario offers several advantages, such as limited liability, potential tax benefits, and credibility with customers and investors. Although some business people will hire an attorney or other professional to incorporate them, many entrepreneurs can easily do it themselves to save money and better understand their business structure. This guide will walk you through the process of how to incorporate a business in Ontario by yourself, from choosing a company name down to filing the papers. By the end, you’ll know how to incorporate a business on your own.
Why should you incorporate a business in Ontario?
Before diving into the details of how to incorporate yourself in Ontario, here are a few important reasons to do so:
- Limited Liability: This separates your personal assets from those of the company and protects you from being personally liable for the corporation’s debts and obligations.
- Tax Advantages: Incorporated businesses may benefit from lower taxes and deductions not available to sole proprietorships or partnerships.
- Increased Credibility and Professionalism: Incorporation will make your business appear more credible to customers, suppliers, and potential investors.
Now that we’ve outlined the benefits, let’s dive into how to incorporate a business in Ontario on your own.
How to incorporate a business in Ontario yourself Process:
Step 1: Choose a Business Name
First and foremost, you will need to choose your business name to incorporating yourself in Ontario. This name must be unique and not already used by another business corporation in Ontario.
Conduct a NUANS Name Search
To ensure that the name you have chosen is available, you will need to conduct a NUANS (Newly Upgraded Automated Name Search) report, which compares your proposed business name against a database of existing names and trademarks.
Tips for Choosing a Business Name
- Distinctive: The name must stand out from existing ones.
- Descriptive: A good name that reflects the nature of your business.
- Avoid Similarity: Avoid names that sound like existing businesses to prevent confusion and legal issues.
Once the NUANS report confirms the availability of your business name, reserve it for 90 days, giving you time to complete the incorporation process.
Step 2: Choose a Business Structure
When you are incorporating yourself, one important thing you should not forget about is to do research about different business structures that exist in Ontario. Most businesses in Ontario incorporate as a private corporation, but other structures are available based on your business goals.
Common Types of Corporations in Ontario
- Private Corporation: Common for small businesses, Ownership is limited to shareholders, and shares are not publicly traded.
- Non-Profit Corporation: For businesses serving the public without profit.
- Professional Corporation: For regulated professionals like doctors, lawyers, and accountants.
For most entrepreneurs, the private corporation structure will be the best choice.
Step 3: Prepare Articles of Incorporation
The Articles of Incorporation is a crucial document when outlining important details about your new corporation, such as the business name, office address, and corporate structure. You can file this document online through the Ontario Business Registry or by mail. You can also contact Nuans Canada Online and we will guide you how to incorporate a business and prepare articles for you.
Information to Include in the Articles of Incorporation
- Business Name: Must match the name reserved in your NUANS report.
- Registered Office Address: The physical location of your business.
- Director Info: At least one director is required, who must be 18 years old or older and not bankrupt.
- Share Structure: Define the number of shares your corporation can issue and their classes.
You can complete the Articles of Incorporation yourself or use a service provider like Nuans Canada Online. Once prepared, file them with the Ontario government along with the required fee.
Step 4: File Your Incorporation Documents
Once your Articles of Incorporation are ready, file them with the Ontario Business Registry. Filing online is faster and more convenient. Nuans Canada Online can file it and receive the documents in just few business hours.
How to Submit Articles of Incorporation Online
- Log in to the Ontario Business Registry (or create an account).
- Upload your Articles of Incorporation and NUANS report.
- Pay the filing fee (currently $360 for online filing).
- Submit your application for processing.
Once approved, you’ll receive a Certificate of Incorporation, officially registering your business as a corporation in Ontario.
Step 5: Obtain a Business Number and Register for Taxes
After incorporating your business, the next step is to obtain a Business Number (BN) from the Canada Revenue Agency (CRA) for corporate tax, GST/HST accounts, and payroll deductions if you plan to hire employees.
Steps to Obtain a Business Number
- Visit the CRA’s Business Registration Online portal.
- Complete the application to register your corporation.
- The CRA will issue your Business Number for tax purposes.
Step 6: Open a Corporate Bank Account
Once your business is incorporated, open a corporate bank account to keep business finances separate from personal finances and ensure proper tax records.
What You Need to Open a Corporate Bank Account
- Certificate of Incorporation: From the Ontario Business Registry.
- Business Number (BN): From the CRA.
- Identification Documents: For the corporation’s directors.
By keeping business and personal accounts separate, you’ll protect yourself from personal liability and make managing business finances easier.
Step 7: Maintain Ongoing Compliance
Incorporating your business is only the beginning. Once incorporated, you must ensure ongoing compliance with Ontario’s corporate laws.
- File Annual Returns: Every Ontario corporation must file an annual return with the Ontario Business Registry to update any changes in directors or office addresses.
- Maintain Corporate Records: Keep records such as minutes of shareholder and board of director meetings and shareholder resolutions.
- Taxes and Financial Statements: File corporate taxes on time with the CRA and maintain accurate financial records. File for GST/HST if your business earns over $30,000 in revenue annually.
Costs Involved in Incorporating Yourself in Ontario
Incorporating a business in Ontario by yourself can save you a lot of money, but there are still some costs you need to account for:
- NUANS Name Search: $13 to $75, depending on the provider.
- Filing Fee: $360 if filed online through the Ontario Business Registry.
- Business Number Registration: Free through the CRA.
- Ongoing Costs: Annual return filing fee (currently $12 online) and other compliance-related expenses.
These costs are relatively minimal compared to hiring a lawyer or professional service provider to handle the incorporation for you.
Incorporating Yourself: Advantages
Incorporating yourself can save you hundreds, even thousands of dollars in fees, if you know how to incorporate a business right. Incorporating yourself will give you an active role in understanding how your company operates. You’ll gain valuable knowledge about your company’s structure and its legal requirements.
Cost Savings
Professional services may charge between $1,000 and $2,500 for incorporation. When you incorporate yourself, you only pay government fees, saving on legal costs.
Better Knowledge of Corporate Structure
When you know how to incorporate a business yourself – it helps you understand the legal and administrative setup of your corporation. This knowledge can be helpful when dealing with future challenges.
Conclusion
Incorporating a business in Ontario is a manageable process that can save you both time and money. Following the steps in this Ontario incorporation guide will give you a clear understanding of how to incorporate a business yourself in Ontario. You can complete everything online, from the NUANS name search to filing your Articles of Incorporation, without professional help.
By taking control of your business’s legal foundation, you ensure compliance at low costs. With your company legally registered, you’re better positioned to enjoy the benefits of incorporation, such as limited liability and tax advantages.