Incorporating a business entails transforming it into a legal entity. The reasons for this lie around tax benefits, liability exemptions, and business name protection. The incorporating process is only beneficial if you do it right. It begs the question: how do you incorporate a business in Ontario? Here are the dos and don’ts:
Do: Know The Requirements
Knowing the requirements of incorporating is important. It helps you gauge whether you’re ready to go through the entire process. You’ll also find out what you need for a successful process. One of the things to know is the management requirements that mainly touch on the directors. For instance, the director requires to be more than 18 years of age, they shouldn’t have a criminal record, and they have never filed for bankruptcy.
The other things to know touch on documentation. You need various documents to run your business in Ontario incorporating. A minute book is one of these documents. It contains details on the business by-laws and a list of directors, shareholders, and officers. It’s advisable to update the book should there be any changes in your management system. Incorporating also requires you to hold meetings at least yearly. The meeting’s agenda should be on management. You’ll record the minutes of the meeting in the minute book.
It’s also important to know the licenses and permits you need to run your operations upon incorporation. Some are general while others are tied to your industry. Consider seeking assistance as you incorporate a business in Ontario. It makes the process faster and more thorough.
Do: Choose An Appropriate Business Name
A registered business name is crucial since it’s what the public will refer to you as they talk about your business name. It’s one of the requirements when incorporating in Ontario. The Canadian government requires you to choose a unique business name. It shouldn’t be similar to any other that exists. It’s also important that it’s not similar to one already existing. There’s a possibility of confusion, which might negatively affect your business.
To ascertain this, the government has a system to assist you. It’s referred to as the Newly Upgraded Automated Name Search (NUANS). It’ll show you whether a business exists that uses your ideal business name. The Canadian government also requires that your business name isn’t obscene and shouldn’t show any relation to them.
Do: Avail The Necessary Documents
The successful incorporation of a business requires the availing of some documents. The documents aim to provide more information to the authorities regarding your business. One of the documents to avail of is the Articles of Incorporation. It contains the business name and address, the name and addresses of the directors and shareholders, and details of the business operations. It’d help to inquire what more this document requires before filing one.
You don’t want to miss out on anything in the incorporation process—it’ll take you back to square one. You also need to avail of a NUANS report. It contains a list of businesses with similar business names to yours. As you avail of the necessary documents, ensure they’re all signed by the needed signatories.
Don’t: Forget About The Dates
Dates are crucial when incorporating a business. The incorporation has some regulations on various things like timeframes to availing of documents. A failure to adhere to the timeframes might lead to penalties, with the possibility of a cancellation of the corporation. The result is declining operational profits, which you want to avoid.
Some dates to remember are the day you receive your certificate of incorporation and the initial notice. With the initial notice, you must file it within 60 days of incorporation. It’s a confirmation of the corporation details you availed of previously during incorporation. It’d help to mark these dates on your calendar and set reminders for them in the future when you need to take action.
Don’t: Forget Taxation
Taxes are common in most governments, the Canadian government not excluded. It’s how governments get money to fund public projects with the citizens in mind. Upon incorporation, there are several taxes you should pay. They depend on your business operations and revenues.
The common taxes are the Harmonized Sales Tax (HST) and payroll tax. You’ll register an HST account if your business revenue exceeds USD$30,000 per year. The payroll tax works if you have workers in your business. Ensure you find the right tax bracket in which you should pay taxes. You want to avoid falling on the wrong side of the law.
Business incorporation is quite an easy process with the right information at hand. As stated herein, you must execute all the necessary operations for the process to be successful. Implement these tips for a seamless process.
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