Are you looking to incorporate your business? With incorporation, you set your business to be a legal entity on its own. It can sue, be sued, acquire, sell, and hold assets without these functions falling on its members.
With this structure, you can incorporate an existing business or form one right from the onset. Are you a small business owner in Ontario who wants to incorporate your business? How will you go about the process? This article gives a guide on the process in Ontario; read on!
Here Are Five Best Guides Of Ontario Incorporation For Small Businesses
Be sure to do the following:
1. Find A Suitable Name
A business name is often a crucial choice for many entrepreneurs. Your chosen business name should be unique; no other business should be using the same. There are resources you can use in Canada to discover your business name's uniqueness. One of them is Newly Updated Automated Name Search (NUANS.)
With Ontario incorporation, your corporate name should be distinctive, descriptive, and have a legal identity. The distinctive aspect refers to a unique name or word (as described earlier.) For description, it should mention your main operations, e.g., a flower shop, a bakery, etc. On legal identity, it should depict its business structure, e.g., ltd, inc. An example of a corporate name would be Femming Bakers Ltd.
2. Hire A Registered Agent
As a corporation, it might get challenging to handle legal documents. With the possibility of many members, official communication might be challenging. Some might miss announcements or fail to get certain documents due to omission by error while sending.
It’s important to hire a registered agent to avoid all these inconveniences. The agent will receive official documents and communication on behalf of the corporation. They’ll then forward the message and documents to the relevant parties, even while informing the others about the receipt of the same.
3. Create By-Laws
By-laws depict how you’ll govern your corporation once you register it. A corporation will often be made of directors and shareholders. Without proper laws in place, conflicts are likely to arise, which makes it challenging to run the business. As a result, most incorporating bodies will require you to submit these by-laws as one of the incorporating documents.
Your by-laws should include details of the roles and responsibilities of directors and shareholders. Should there be shareholder classes, pinpoint each and the differentiating factors. For instance, there can be shareholders with voting rights and those without. What qualifies one for each group? Your by-laws should depict this information.
4. File Articles Of Incorporation
Articles of incorporation contain details about the business that help the registering body know more about the business even as they incorporate it.
In Ontario, most registering bodies will require your articles of incorporation to contain the business name and its address, the name of the directors and shareholders, including their contact information, and the name and address of the registering agent.
Others will contain the main location of operations, the purpose of your existence, the minimum and the maximum number of directors, the period of operation, and the effective date of operation.
As previously stated, each Canadian province requires you to incorporate in it if you’re run to operations. There’s a probability that the contents of articles of incorporation differ from state to state.
Consider visiting the body in charge of incorporating in Ontario and find out what they need, factoring in the fact that these laws keep changing. Inquiring beforehand will prevent back and forth, which can make the process frustrating.
5. Adhere To The Legal Requirements
One of the legal requirements you must adhere to is taxes. In Canada, the amount of tax you pay depends on the area of operation, your business revenue, the income source, and the services you offer. Each province has a different rate.
Therefore, properly classify your small business and pay the appropriate taxes. The Canada Revenue Agency will give you an income tax account through which you’ll be paying your taxes.
The other legal requirement entails a business license which legalizes your operations. Based on your operations, inquire about the licenses you’ll need to run your business in Ontario and Canada. Be sure to apply for them and pay any fees associated with them.
With the right guidance, incorporating small businesses in Ontario is an easy process. This five-step guide should be able to lead you to the next step. Should you get stuck during the process, inquire with the Ontario provincial government and incorporating body for the assistance you need.
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