Incorporating Your Business in Ontario
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As your business grows, incorporating it could be a logical next step. If you choose to incorporate your business, you’re essentially creating a legal entity, and your business will have rights similar to a person as far as liability and protection of your business name and other assets. It’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.
As you can imagine, the process for incorporating a business is very detailed. With all the rights your company will be given, there’s a different level of detail that’s expected. It’s important to make sure nothing is overlooked when going through the process.
Here are 6 key things you should know about incorporating your business in Ontario:
1. Choosing a business name vs using a number
You can choose to incorporate your business with a distinct name or a number. There’s no difference in function between the two. All rights are the same. If you plan on building a business that you want consumers to identify, it makes sense to choose a name that reflects your brand. Numbers are usually for businesses that do not function publicly, such as holding companies, or do not need brand recognition. Numbers also work if you are unsure what to name your business at the time of incorporation – you can add a business name later.
2. Business Name Search
A corporation’s business will have limited name protection in the jurisdiction it’s registered in. Your business name must be distinct and not misleading, meaning nothing in your name that may lead anyone to confuse your business with another or believe that your business is a provincial or municipal Canadian government agency.
Since formal name searches cost money, it’s good to start with a basic internet search. This will immediately eliminate some names and give you a solid starting point. Once you’ve done that homework, it’s time to run a formal name search in the government’s database (a.k.a. NUANS search). You are required to provide a NUANS report with your incorporation application.
Did You Know: Ownr provides up to 30 name searches to help you find a unique name that best meets your needs.
3. Articles of Incorporation
Once you have chosen a business name (or number), you’ll need to complete what’s called Articles of Incorporation. The Articles of Incorporation defines your company’s purpose. It’s a form that must be submitted with your NUANS report in order to incorporate your business. Some details that the Articles of Incorporation require include:
- Roles of the corporation, including members within the company and their contact information: incorporator, director, and officers (president and secretary). Important to note that for provincial incorporation, at least 25% of directors must be Canadian citizens. However, this rule does not apply in British Columbia.
- Details about your business, including the legal ending for your corporate name, a one line description of your business, the industry, and the fiscal year end.
- Assign ownership in the corporation, or commonly known as shares. Shares are meant to indicate the distribution of profit should any dividends be made. You will decide on a price per share and how many shares will be issued to each shareholder.
4. File your application
Once you’ve received your NUANS report and completed your Articles of Incorporation, it’s time to file your application. In addition to those two items, you’ll also need a NUANS reservation reference number as well the NUANS date. It’s possible you may also need supporting documentation, depending on the type of business. Supporting documents can also include a letter explaining why you chose your business name. If the name is similar to an existing business, you’ll need to express why you still decided on keeping that name.
5. The Minute Book
In Canada, it’s mandatory for corporations to maintain a “Minute Book,” which is a corporation’s official record of documents and activities. It’s legally required and is critical throughout the life of a corporation. When you incorporate with the provincial government, the Minute Book is not included in the registration, so it’s important for you to make sure it’s in place. When you incorporate with Ownr, however, the fee includes a digital Minute Book already, for added convenience.
Typically these documents are required to be included in a Minute Book:
- Initial Corporate Bylaw
- First Director Resolution
- First Shareholder Resolution
- Director Consent
- Subscription for Shares
- Shareholder Register
- Shareholder Ledger
- Digital Notices of Uncertificated Shares
- Any other documents required under provincial law or to complete extra provincial registrations for federal companies
6. How much does it cost to incorporate your business?
The costs to incorporate a business vary depending on the type and jurisdiction of the business, and how you register. If you decide to register and file paperwork yourself, the cost is lower. However, you have to do the research and work to ensure it is filed correctly. You may also need to go to a few different places to gather the documents required. For example, the Ontario government charges $300 for provincial incorporation, but you’ll need to pay additional fees, either to the government or a third party provider, for each of the following required legally: NUANs report, name searches, and the Minute Book.
That’s why many people choose a service provider, such as a lawyer, to incorporate their business. Ownr helps you incorporate your business for a fraction of the cost compared to using a lawyer, and the Ownr fee includes the government fee, 30 free name searches, NUANS report, and the digital Minute Book. Additionally, if you decide to open a new business account with RBC within 60 days after incorporating with Ownr, you could also get a $100 refund from Ownr.
Ready to start your business? Ownr has helped over 13,000+ entrepreneurs hit the ground running quickly – and affordably. If you have questions about how to register or incorporate your business, give us a call at 1-800-766-6302, Monday through Friday from 9 am to 5 pm EST, or email us firstname.lastname@example.org