Incorporating a Business in Ontario
Incorporation is the creation of a corporation. By incorporating with a lawyer, you can ensure your corporation is property formed, that your liability is limited, and that any questions you have are answered. A lawyer can answer any corporate questions you may have which will help you properly operate your corporation. Although one can incorporate themselves or with a online filing service, only a lawyer can provide you with the legal advice you see to ensure you benefit from the limited liability protection afforded by a corporation.
Incorporation is the creation of a Corporation. Corporations aggregate are by far the most common and important form of business organization in modern Canadian society. They range in size from small corporations, with a single shareholder, no employees and nominal capital, to huge multinational enterprises with hundreds of thousands of shareholders and employees, and issued capital in the billions of dollars.
There are a lot of different types of corporations, including of a For-Profit, Not-For-Profit, Co-operative and Professional Corporations. Incorporation can be done at the federal or provincial/territorial level using the Ontario Business Corporations Act (the “OBCA“) which is administered by the Ministry of Government and Consumer Services and the Canada Business Corporations Act (the “CBCA“) which is administered by Corporations Canada. More information on choosing a jurisdiction can be found here.
When you incorporate your business, it is considered to be a legal entity that is separate from its shareholders. Moreover, the share structure of a corporation could also have tax implication. As a shareholder of a corporation, you will not be personally liable for the debts, obligations or acts of the corporation. It is always wise to seek legal advice before incorporating. Pawlina Law can advise you on whether to pursue incorporation, how to structure your share provisions and all other aspects of incorporation. Unlike other incorporation services, we focus on Corporate Law.
Incorporate your Corporation with a Lawyer
Done right by an experienced lawyer (Karol Pawlina)
$
680 + HST and Disbursements
Ontario Incorporation or Federal Incorporation
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Unlimited Calls and email responses to your questions
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Digital Minute Book
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Articles & Certificate of Incorporation
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Form 1 - Initial Return Corporate / Ontario Extra-Provincial Registration
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By-laws
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All necessary Director & Shareholder Resolutions
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Share Subscription & Share Certificates
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All necessary Registers & Ledgers
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Consult regarding a Shareholder Agreement
Call, Text or E-mail Us
As of the time of the writing of this page, disbursements which are fees we incur on your behalf are expected to be $357.07 for an Ontario Corporation and $257.07 for a federal Corporation..
Advantages of Incorporation:
- Limited liability meaning, unless there are special circumstances, only the assets of the corporation will be used to fulfill corporate liabilities. Your personal assets will be safe
- Ownership is transferable to another person or corporation by transferring the shares of the corporation
- As long as filings are maintained and the corporation is not dissolved, the corporation’s existence is continuous
- Separate legal entity meaning the corporation can act on its own with its own assets and liabilities
- Easier to raise capital than it might be with other business structures as you can issue shares
- Possible tax advantage as taxes may be lower for an incorporated business
Disadvantages of Incorporation:
- A corporation is closely regulated
- More expensive to set up a corporation than other business forms
- Extensive corporate records required, including documentation filed annually with the government
- Possible conflict between shareholders and directors
- You may be required to prove residency or citizenship of directors
Incorporation Lawyer
One should use a lawyer for their incorporation. Online incorporation services cannot provide you with the legal advice you need to ensure you receive all the benefits of incorporation. If one scrolls to the footer of an incorporation services, there will often be a disclaimer that the company is not a law firm and it does not provide legal advice or legal services.
For example, an incorporation service cannot advise you how to company with Securities legislation in Ontario. The Ontario Securities Commission (“OSC”) regulates securities in Ontario. The OSC has the functions given to it pursuant to the Securities Commission Act, 2021 and administers Ontario’s Securities Act and the Regulations. Incorporating with a lawyer ensures you can consult with a lawyer and stay onside with securities legislation.
There are other important considerations that need to be examined at incorporation. For example, the share structure must be set up to allow for maximum flexibility. Moreover, one must consider whether or not a Section 85 rollover is needed at incorporation.
Choosing between Provincial (Ontario) and Federal Incorporation
Clients are often surprised when asked whether they would like to incorporate federally under the Canada Business Corporations Act (R.S.C., 1985, c. C-44) (the “CBCA”) or provincially under Ontario’s Business Corporations Act, R.S.O. 1990, c. B.16 (the “OBCA”). They are either surprised that the provincial option even exists, or they are surprised that we would consider provincial incorporation as they think that federal must always be better. However, both are good options and only by examining a client’s circumstances can a determination be made. More information can be found here. Pawlina Law can assist you with making this important decision.
It is crucial that your corporation to be properly formed and constituted to ensure you benefit from the limited liability provided by a corporation. Pawlina Law can help you with both federal and provincial corporations.