INCORPORATION
THE PROCESSCALL US AND WE’LL LET YOU KNOW
Where you are the sole owner of the business you can carry on business as a sole proprietor or you can incorporate a company and carry on business through it.
Where two or more people will be the owners, they can form a partnership or they can incorporate a company and carry on business through it.
Whether or not you should incorporate depends on a number of factors, such as the degree of financial risk associated with the business and the owner’s financial situation (expected annual income from the business, other sources of income, financial needs, etc.). We can review your situation with you and provide you with our advice on how you should proceed. Believe it or not we do not always recommend incorporation.
Sole Proprietorship Advantages:
Simpler- Less expensive to set up (no incorporation costs)
- Less expensive to maintain (lower annual accounting fees)
Incorporation Advantages:
- Limited liability (you can protect your personal assets)
- Lower taxes / deferred taxes in certain circumstances
INCORPORATION PROCESS
STEP 1
The first step to the incorporation process is to file Articles of Incorporation with the government. The Articles of Incorporation set out the minimum and maximum number of directors, the types of shares that can be issued and their attributes, any restrictions on the type of business the company can carry on, etc. We can assist you structuring the company in such a way as to give you the flexibility to accomplish your objectives. The Articles of Incorporation, once filed, are what bring your company into existence. A bank account can then be opened in the company name and the company can begin carrying on business.
STEP 2
Many people who choose to incorporate on their own make the mistake of stopping at the completion of Step 1. Step 2 is equally important. It involves organizing the company: appointing the directors and officers, issuing shares and share certificates, creating registers to be maintained, setting a year end, etc. Without this second step, there is no documentation to establish who the owners of the company are for example. This could be a problem where there is more than one owner, in an audit situation or where the company wishes to borrow money from a bank. We can get your company properly organized and its documentation housed in a corporate minute book to properly document the corporate structure.
STEP 3
The best practice is to update your corporate minute book annually (eg. appointing directors and officers, approving financial statements, etc) and whenever changes occur in the corporate structure (changes in directors, officers, shareholders). We can handle that for you.
Costs
There are certain costs associated with incorporating:
- Incorporation fee to the government;
- NUANS name search if you want a “name” company instead of a numbered company;
- Business Name Registration if the company is going to operate under a name other than it’s legal name (eg. 1234567 Ontario Inc. operating as “Steve’s Bakery”);
- Corporate minute book and company seal;
- Lawyer’s fee + HST
Call us for an estimate
The total cost of getting incorporated and organized through our firm varies depending on the jurisdiction of incorporation, the name searches / registrations needed and any other particular needs.
Give us a call and we will be happy to review your needs and provide you with an estimate.