An incorporated business is one a government identifies as a separate legal entity. Incorporating your business offers numerous advantages. One of the most significant advantages is limited liability. Unlike sole proprietorships, corporations protect you from personal asset exposure. It means creditors will only take your private properties like a house or car if you can pay debts.
Besides that, acquiring funds is much simpler. Incorporating your business qualifies it for loans and grants only suitable for incorporated companies. Finally, corporations have significant tax benefits. Numerous tax deductions are available for incorporated businesses compared to individual enterprises. With that in mind, here’s how to incorporate a business in Ontario:
Choose A Name For Your Corporation
The first thing you’d want to do when incorporating your business is to choose a name. Your company’s name plays an essential role in the success of your business, meaning it can make or break it. Therefore, choosing the right name is ideal for attracting prospective clients and helping customers recognize your brand easily.
In Ontario, you can have your corporate name in words or numbers. For word names, you can add symbols, numbers, and letters. However, you must perform a newly upgraded automated name search (NUANS) to guarantee your name is unique. The NUANS report records all the current business names, trademarks, and corporate names. On the other hand, you can use numbers for business and not-for-profit corporations, but you don’t need to carry out NUANS.
In addition to being distinctive, other considerations for your corporate name include the following:
- It shouldn’t have prohibited terms like royal Canadian, Parliament hill, cooperative, and the like.
- It shouldn’t be confused with other names.
- It must be unique.
- It shouldn’t suggest institutional or governmental control or sponsorship.
When selecting a corporate name in Ontario, you must consider several practical and legal factors. Therefore, ensure you know all the requirements to get your name approved.
You can write your corporate name in pure English or French, combine both, or write them separately.
Register Your Corporate Address And Shareholders
All corporations based in Ontario must have addresses registered in Ontario. The address shouldn’t be a postal address but a residential or commercial one. You can give the headquarters’ address if your business is located in different places. A corporate address is critical, especially if you have a home-based business. It lets you separate personal correspondence from business ones and maintain high privacy.
Additionally, you must register the shareholders of your corporation. These people own the corporation. It can be a minimum of one shareholder and a maximum of 50. You also need to provide the residential addresses of all the shareholders.
Select Your Brand’s Directors And Officers
Directors make critical management decisions in your corporation, while officers take senior administrative posts. The law in Ontario requires that apart from non-resident corporations, three-quarters of the directors in a corporation must be Canadian residents. However, if your corporation is small with less than four directors, at least one must be a Canadian.
Furthermore, your corporation must have a President and Secretary to incorporate a business in Ontario. You can choose one person to be a Director, Officer, Shareholder, Secretary, President, and other Officers, especially if your corporation is small with few members. Remember that the officers mustn’t be Canadian residents. Also, remember to indicate the officers’ election and appointment dates.
File The Articles Of Incorporation
Articles of incorporation are legal files you’ll deliver to the proper government department in Ontario to confirm your corporation’s registration. It’s a combination of several articles, each requiring unique information. The articles include:
- Your corporate name
- Directors’ details and citizenship status
- Residential address of your office
- Share structure
- Regulations on shares transfer or ownership
- The number of shares your corporation can offer
- NUANS report for your proposed name, which you must submit within the first 90 days from the established day
- Number of directors
- Any other restrictions
You can fill out your articles of incorporation online, in person, or via email. Keep a copy of all your files for any processing issues.
Submit And Pay
After ensuring you have all the required documents for business incorporation in Ontario, you can submit your files. You can make your submission online or manually by visiting a government office. For manual submission, ensure you carry a cover letter and two copies of filled articles of incorporation. However, you can do that online for faster submission.
Incorporating is a critical step to materializing your business idea. It’s straightforward when you know how to go about it. Above are some steps that’ll make your process seamless. For fast incorporation, consider completing your operation online. However, not all online platforms are reliable. So, before using any medium, ensure it’s safe, user-friendly, and trustworthy.