How Do You Incorporate a Business?
Incorporation in Ontario is a complex process, requiring the filing of detailed documents with absolute precision.Corporations in Canada are able to incorporate under the Business Corporations Act.
First, you need to decide whether you will incorporate federally or provincially.There are advantages and disadvantages to each tactic, depending on the nature and scope of your business.If you choose to incorporate provincially, you will only be permitted to conduct business within the province in which you incorporated.As long as you register your corporation in every province you intend to conduct business in, you will be permitted to do so across Canada if you choose to incorporate federally.Your business will further be permitted to use the same corporation name in every province, regardless of whether there is a pre-existing corporation sharing the same name in a particular area.However, federal incorporation involves a lot more paperwork and costs a higher amount in fees.If you intend to conduct business only in Ontario, provincial incorporation is probably sufficient.If you intend at any point in the future to extend your business outside of the province, you may want to consider federal incorporation.
The second step in incorporation is deciding on a corporation name.This can be much more difficult than you might expect, as the registrar of corporations mandates that your corporate name can not be identical, or too similar to an existing corporate entity’s name.You will need to research each prospective name you are considering to ensure that no other entities have already taken that name.To do so, you may have to commission an NUANS search, as well as submit an NUANS report with your articles of incorporation.Once you have determined no other business has taken your corporation name, you need to request to reserve the name.
Finally, you need to prepare and file your paperwork.To incorporate a typical business, you will need to prepare a Memorandum that stipulates the rules of conduct for the corporation, the Articles of Incorporation that lays out the rules of conduct for officers and shareholders, and a Notice of Offices declaring the location of your corporate offices.You will need to determine the fees for incorporation in your province (or at the federal level, if you intend to incorporate federally), and enclose these fees in your filing.It is imperative that all documents are properly filed with the appropriate bureaucratic branch in accordance with the Business Corporations Act, as even the smallest mistake can result in a rejection and force the incorporator to re-file.
Because of the difficulties presented in properly filing, many business entities choose to retain a corporate law firm to handle the process of incorporation on their behalf.Attorneys are well versed in the intricacies and details of these complicated filings, and can ensure that no mistakes are made and prevent devastating delays to your business.