As your business grows, incorporating could be a logical next step. If you choose to incorporate your business in Ontario, you're essentially creating a legal entity. Similar to a person, a corporation will have its own rights and responsibilities, including liability and protection. This includes all personal assets.\r\n\r\nThe process of incorporating a business can be quite arduous. A high level of detail needs to be taken into account which is why a number of business owners choose to hire a lawyer. However, hiring a lawyer can be quite pricey and is not the only route you can take. It’s possible to incorporate your business without one.\r\nWant to incorporate your Ontario-based business? Do it in minutes with Ownr!👈 \r\nWhy incorporate your business?\r\nWhile many entrepreneurs and small business owners choose to be sole proprietors or partnerships, there are some circumstances when incorporating your business is beneficial and maybe even necessary.\r\n\r\nThere are two types of incorporations: not-for-profit and for-profit businesses. Business owners generally fall under the latter category. While incorporating isn’t for everyone, there are a few important reasons why sole proprietors choose to incorporate. There are also things you should be aware of before making that decision.\r\nLimited liability\r\nA sole proprietorship is not a legal entity in and of itself and therefore, cannot be held liable for any debts or litigation independently. This falls squarely on the shoulders of the business owner. For some, this can be a significant worry as all their personal assets, including savings, real estate, and vehicles are exposed.\r\n\r\nSince a corporation is a legal entity apart from its owner(s), all liability is under the purview of the corporation, protecting the owners from any personal asset exposure. For some business owners, this is an attractive option.\r\nTax advantages of incorporating your business\r\nAs a sole proprietor, all business earnings are declared on their personal income tax return and taxed under the personal tax rate. But as your business grows and you start bringing in more income, you run the risk of meeting a higher tax bracket threshold. While there are business expense tax advantages to being a sole proprietor if revenue ends up putting you over the higher tax bracket threshold, incorporating your business can be an advantage.\r\n\r\nIncorporating your business means a corporate tax rate, which is usually lower than personal income tax rates. Travel and health insurance costs are also protected under corporate tax rates.\r\n\r\nBy incorporating your business, you can draw a salary, which can also safeguard you from hefty personal income taxes. Whereas your personal income tax might be significantly higher in a sole proprietorship, despite much of the earnings going back into the business, as a corporation you will be able to lower your tax bracket to more accurately reflect your actual earnings.\r\nSecuring funds is easier\r\nBy incorporating, your business becomes eligible for loans and grants that are geared only for incorporated companies. These grants and loans can be of a significantly higher value as well. Conversely, sole proprietors and partnerships might have challenges securing funds, either through loans or grant programs.\r\nShould you incorporate your business yourself?\r\nIf you decide to incorporate your business, the next step will be to decide if you want to invest the time to do this yourself or hire the services of a lawyer.\r\n\r\nIncorporating can be expensive, both in money and time. Add on the legal fees and this can be a hefty bill. Incorporating your business yourself can save you money, but it’s best to weigh that legal bill against the time it takes to prepare all the paperwork and submit it to all the right entities. Will this time spent be worth the cost of using that time working on your business? Time-wise, will legal fees actually be more cost-effective?\r\n\r\nLegal fees can also include consulting and advice on how to structure your corporation to the best advantage, particularly tax-wise. Corporation roles, such as directors and shareholders, will also take some consideration, which is where hiring a lawyer might be a good idea.\r\n\r\nHowever, there is another option. Rather than spending money on legal fees or the time doing this yourself, Ownr can help you incorporate your business for a fraction of the cost.\r\nIncorporating your business provincially and federally\r\nhttps://youtu.be/DFOl7he36Ng\r\n\r\n \r\n\r\nA corporation’s business will only have name protection in the jurisdiction it’s registered in. Incorporating in one province won’t necessarily mean your name is protected in another. Where you will be conducting business should also play a factor in deciding if you want to incorporate in just Ontario, or provincially and federally.\r\nIncorporating in Ontario\r\nIt's important to recognize that incorporating your business in Ontario means these rights are only extended provincially in Ontario. Your business will not have the same benefits across Canada unless you incorporate federally.\r\n\r\nOntario incorporation is regulated under the Ontario Business Corporations Act (OBCA) and requires Articles of Incorporation to be filed. The Articles of Incorporation should include corporation name, named directors, shareholders, and the effective date. This is all included and must be filed as a Form 1. The costs to file the incorporation materials in Ontario runs anywhere from $300 to $360 and can be done online, by mail, or in person.\r\nIncorporating in Canada\r\nThe advantages to incorporating federally are much the same as incorporating in Ontario, but doing both can protect your corporation name across Canada, not just in Ontario.\r\n\r\nChoosing a business name is the first step, which can be done through NUANS for a fee (you get unlimited NUANS searches free with Ownr). If you are incorporating in both Ontario and federally, it’s wise to search both.\r\n\r\nYour business name should satisfy three legal requirements: a distinctive element, a descriptive element, and a legal ending. A distinctive element can be a word or a name; something that is unique to your business. A descriptive element describes the business, such as “flower shop.” A legal ending defines your business structure, like Inc. or Ltd. For example, a satisfactory business name will look something like this:\r\n\r\n[Distinctive] + [Descriptive] + [Legal Ending} = Mabel’s Flower Shop Inc.\r\n\r\nAs with incorporating in Ontario, you will need to file Articles of Incorporation. This is probably the most complex step and where outsourcing help is beneficial.\r\nWhat is required after incorporating your business?\r\nIncorporating your business isn’t the last step of the process. There are a few legal requirements in order to keep your incorporation status, both federally and in Ontario.\r\n\r\n \tA minute book and share records\r\n \tCompany updates\r\n \tAnnual return and resolutions\r\n\r\nMost of the official record of documents and activities that are not included in the original application for incorporation is included in the minute book. This will include:\r\n\r\n \tInitial Corporate Bylaws\r\n \tFirst Director Resolution\r\n \tFirst Shareholder Resolution\r\n \tDirector Consent\r\n \tSubscription for Shares\r\n \tShareholder Register\r\n \tShareholder Ledger\r\n \tDigital Notices of Uncertified Shares\r\n \tAny other documents required under Ontario and/or federal law\r\n\r\nLet Ownr incorporate your business\r\nUsing Ownr’s services to incorporate your business will save you time and money. Plus, if you incorporate with Ownr, you’ll get access to exclusive perks that help set your new corporation up for success.