You may have a lot of tasks on your to-do list when starting a business in Ontario, and selecting the correct legal structure for operating your business should be near the top of that list.
(We recommend that it be much higher on the list than things like deciding on what kind of coffee maker to buy for the break room, even though those decisions might be more fun.)
One common selection is incorporating a business in Ontario. Incorporation provides numerous benefits, including being able to fully separate the finances and liability of the business from the personal finances and liability of the owner or owners.
On the other hand, incorporating creates some complexity in the way you must manage your business. Even though incorporation is not for everyone, it is worth exploring when starting a business in Ontario. We’ll break down the steps you need to follow when you want to incorporate your Ontario business.
How Does an Incorporated Business in Ontario Work?
An incorporated business allows for an ownership structure where multiple people can own the business at varying percentages of ownership. Each owner receives ownership shares equal to the percentage of ownership.
This differs from other types of legal structures where the owners all must hold the same percentage of shares in the business or where only one owner is allowed. (A corporation can have one owner, but it doesn’t have to have one owner.)
Should one of the owners want to sell the interest in the business, that owner could sell the shares to other owners. The owner could also bequeath the shares to family members, should the owner choose to retire.
Some corporations allow for publicly traded shares on a stock exchange, such as the Toronto Stock Exchange. Typically, the largest corporations publicly trade their shares. Someone starting a new business from scratch would rarely begin immediately selling public shares, though.
Should the business fail as a corporation, the owners’ personal finances typically are not at risk to creditors. If someone sues the corporation, the owners’ personal finances typically cannot be part of the lawsuit judgment, either.
Should I Incorporate Federally or Provincially in Ontario?
When choosing to incorporate your business, you have the option of filing the incorporation forms at the federal government level or at the Ontario provincial government level.
If you incorporate provincially in Ontario, you will operate your business out of Ontario. Your corporation is bound to the legal regulations within the Ontario province for corporations. You also only receive protection for your corporation’s name within Ontario.
If you later want to do business out of another province, you will have to incorporate in that province, too.
If you incorporate federally, you gain protection for your business name throughout Canada. You can operate your business out of any provinces. However, incorporating federally is more time consuming usually than incorporating in Ontario alone.
Most businesses don’t need to incorporate federally unless they plan to operate from multiple provinces in Canada.
Do I Need to Incorporate My Business in Ontario?
No, new business owners do not have to incorporate their businesses in the province. Instead, you could choose to make use of one of the other business legal structures allowed in Ontario, which include the following:
Alternatives to Incorporation in Ontario
You could start your business in Ontario under one of the other legal structures. You then could choose to incorporate your business in the future if it becomes more advantageous as your business grows.
Pros and Cons of Incorporating a Business in Ontario
The benefits of incorporating your business in Ontario include:
Some of the disadvantages of incorporating your Ontario business include:
FAQs: Incorporating a Business in Ontario
When Do You Have to Incorporate a Business in Ontario?
There is no set date by which you have to incorporate an Ontario business. You can incorporate at the time you form the businesses, or you can incorporate at any point in the future if it makes sense for your business.
However, you cannot receive the benefits of incorporation until you actually go through the process.
How Much Does It Cost to Incorporate a Business in Ontario?
It costs $300 to incorporate your business in Ontario only, regardless of whether you are incorporating online, by email, or by mail.
For a federal incorporation, you will pay $200 to file online.
How Long Does It Take to Incorporate a Business in Ontario?
You can file everything online with the provincial government, so you may be able to incorporate your Ontario business inside the province in as little as an hour. The process takes however long you need to fill out the digital forms.
You may have to spend a bit of time pulling together the documents and information you need before you start the online filing process. That work could take anywhere from a few hours to several days.
Through the Business Corporations Act, the Ontario provincial government’s time estimates for providing a response about the success or failure of the incorporation process include:
The provincial government does not offer a time estimate for those who choose to file in person.
Should you want to incorporate your Ontario-based business federally, the federal government estimates that a standard online filing will require one business day to receive confirmation.
If you would like express service, you can pay an extra $100 in the federal filing (or $300 total) and receive confirmation in four business hours if you file online. (Be sure to start the filing process in the morning with express service if you would like to receive confirmation the same business day.)
If you file by email or mail federally, and if you want express service, the federal government promises a one business day turnaround from the time it receives the information.
What Do I Need to Incorporate a Business in Ontario?
If you want to incorporate your Ontario business inside the province, and if you want to use the online process, you need to follow a few steps and to have certain information in hand:
You will pay your fees for incorporation at the time you submit your information and forms. You can pay by credit card or debit card when filing online, but you can only pay by credit card if filing by email. If filing by mail, you can pay by a cheque.
How to Complete Your Articles of Incorporation in Ontario
Visit the Central Forms Repository for the Ontario provincial government to download the Articles of Incorporation in a PDF that you can fill out and save. You then can upload the form with your online registration process.
The information you must submit as part of the Articles of Incorporation include:
If you have an attorney helping you with the incorporation process, the law firm may have its own Articles of Incorporation form that the provincial government would accept.
Where to Incorporate a Business in Ontario
You have a few options for incorporating your Ontario business. If you need any help with incorporating your business, you can contact ServiceOntario by email or by telephone.
You can use the Ontario Business Registry to incorporate your business online. You will have to have both a One-key account and a ServiceOntario account.
You can also use a service like Ownr (which is owned by the bank RBC) to incorporate your business in Ontario. In addition to being a quick and easy way to incorporate, you also can get a $300 refund if you open an RBC business banking account after incorporating.
By Mail or in Person
Although ServiceOntario prefers to have documents associated with incorporation submitted digitally online, you can send forms by mail, or you can visit a local ServiceOntario office. ServiceOntario recommends that you reach out to the local office before visiting. You may need to set up an appointment.
Through an Authorized Service Provider
Two authorized service providers for the Ontario provincial government can help you with the incorporation process.