How to get incorporated in Canada
Getting Incorporated in Ontario
Whether you’ve recently started working on contracts or planning to, getting incorporated when working in Canada is definitely something to consider for a number of reasons.
- Protecting yourself personally from any business liabilities
- Incorporating your business leads to (You only pay 15.5% on your first half-million dollars)
- You get sole proprietorship credibility from your clients, some vendors prefer to do business with a corporation or a LLC rather than an individual, it sends out the message that you’re serious about what you do!
Sound interesting? Before going into how you can get incorporated, you’ll have to understand different kind of incorporations. So, here we go:
A Federal incorporation dictates that your business will be governed by the CBCA (Canada Business Corporations Act). You may initially save a few hundred dollars by going this route, and you will be covered to work across Canada, but it does also involve an annual fee.
As the name implies, Provincial Incorporation incorporates you in the province you registered your company in. Should you be planning to work in one province for an extended period, this may be sufficient – and there are no annual fees.
Here’s how to get incorporated:
Name your corporation
You can either give it a word name (made of letters or symbols), or a numbered name (i.e 84461 Inc.) which turns out to be the easiest way to name your corporation because it’s automatically assigned.
Create the article of incorporation
This is when you establish the structure of your corporation, you may or may not need to hire a lawyer, this depends on how well you can handle your paperwork (articles of incorporation, covering letter..etc). In the case of sole proprietorship (where you’re the only owner of the business), you should consider the basic incorporation option. Should you decide to choose custom incorporation instead, you’ll need to provide the following:
- Name of incorporation
- Share structure and share transfers restrictions (if exists)
- Number of directors
- Any business activities restrictions
- Other provisions
Establish your initial registered address
Additionally, you’ll have to register your first board of directors, it’s worth mentioning that some people prefer hiring their spouses or relatives under their incorporation, as all payments made to these individuals are registered as an expense.
Submit and pay fees
This could be done either online or through a third party, just make sure that the articles of incorporation submitted should be either in one of the official languages (English or French), or in both official languages.
The fees are around $360, and they could be easily paid online!
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