A Guide To Incorporating In Canada
Disclaimer: I'm not a lawyer and this was just my experience with incorporating. If for any reason you're uncomfortable with incorporating on your own, I would suggest consulting with a lawyer or accountant.
Things to Consider Before Incorporating
How Long Does it Take?
I started the application around 10AM and I had my Articles of Incorporation by lunch.
How Much Does it Cost?
It costs ~$500 ($67 for the NUANS Report + $412 to file online through OnCorp) to incorporate a business in Ontario. See the next section for information about incorporating federally.
Deciding Between Federal vs Provincial
Unless you expect to do business nationwide, it makes more sense to incorporate provincially.
- OnCorp: Differences Between Ontario and Federal Incorporation
- The Balance: Federal Incorporation vs Provincial in Canada
- Ontario Business Central: Incorporating Your Business: Provincial Or Federal?
Should You Name Your Business?
Naming your new company is optional. You can opt to become numbered company (e.g. 45198376 Canada Inc.) but I would suggest it's worth the extra ~$70. I would hope your company can recoup those costs.
Steps to Incorporating
To incorporate, you need to submit the following:
- Ontario or Federal NUANS report (Only if you want to name your company)
- Articles of Incorporation
- Covering Letter
- Pay a fee of $360 (If you do it online, the service provider will charge a fee on top of this)
I will be focusing on the online process but you can also incorporate by mail and in person. Find out about those methods through Service Ontario or ask your grandparents.
Google "services incorporate ontario" for a list of companies that help you incorporate online. Just make sure the service provider is legit and under contract with the Ministry of Government and Consumer Services.
The service you choose should provide everything needed to incorporate including a template for the Articles of Incorporation, sample covering letter and a link to run a NUANS Report / Name Searches.
I used OnCorp to create Inpixelform Design.
The NUANS Report
If you can't decide on what to name your business, it might make sense to do a Name Search and see if one option is better than the others.
Once you purchase your NUANS report, you get emailed a PDF with companies that are close to your proposed name, as long as nothing matches your name and operates in the same category, you should be good to go.
Make sure you do a NUANS search for the exact name you want and put some thought into it. I read that you should have a "descriptive" identifier in your name but if your company's name is already unique then you may want to forgo that based on personal preference (e.g. Uber Inc. should suffice instead of Uber Ride Sharing Inc.).
You can always change the name of our business in the future but there is a fee.
The Articles of Incorporation
I chose to use OnCorp's template with common shares and basically just had to fill out my personal information.
Once you submit, you should get your Articles of Incorporation emailed to you in the form of a PDF. Congrats, you are now incorporated!
Anyone who uses OnCorp should have a PC available with IE installed, I ran into some issues on my Mac.
Getting your Business, Payroll and HST Numbers
After you incorporate, you will need a business number to registering your HST, payroll, etc. Your business number is not found in your Articles of Incorporation . Your business number is sent via regular mail to your business address after you incorporate. If you need your business number earlier, you can call the CRA and they should be able to tell you.
When setting up your fiscal year end, avoid having it be December 31 as that will tend to be the busiest time of year for accountants.
Now that you are incorporated, you will be faced with a number of questions. Should you get an accountant? Do you need a book keeper? What can I expense through my business? Do I pay myself through salary or dividends?
My hope is to to share my experiences of being a newly incorporated business and provide my (subjective) perspective on being a new business owner. As I mention at the top of this page, I am not a lawyer or an accountant, I am just a guy who one day started his own business.