Incorporation

Incorporating in Ontario.

You can incorporate an Ontario corporation online through the Ontario Business Registry, often the same day, and the government filing fee is $300. The judgment is in what surrounds the filing: named or numbered, Ontario or federal, who holds which shares, and the organising documents and agreements that make the company work. Smutylo Law+ incorporates and organises Ontario and federal corporations at a fixed fee.

The steps to incorporate in Ontario

  1. Choose a name or a number. A numbered company (“1234567 Ontario Inc.”) needs no name search and can trade under a registered business name. A named company needs an Ontario-biased NUANS name search report, and the name must meet the province’s naming rules.
  2. Choose Ontario or federal. An Ontario corporation suits a business operating mainly in Ontario. A federal corporation gives you name protection across Canada, but must also register in each province where it carries on business, and must file information about individuals with significant control with Corporations Canada. At least 25% of a federal corporation’s directors must be resident Canadians; Ontario removed its residency requirement in 2021.
  3. File the articles of incorporation. The articles set the name, registered office, number of directors, share classes and any restrictions on share transfers. The share structure is easier to get right now than to change later.
  4. Organise the corporation. By-laws, organisational resolutions, the first directors and officers, the issue of shares and the payment for them, and the corporate registers — including the register of individuals with significant control that Ontario corporations must keep. Together these make up the minute book.
  5. Register with the Canada Revenue Agency. A business number, payroll account if you will have employees, and a GST/HST account once you are required to register or choose to.
  6. Put the owners’ deal in writing. If there is more than one owner, a shareholder agreement. See when you need a shareholder agreement.

Filing is the easy part

Many people file the articles themselves and stop there. The common problems show up later: shares that were never formally issued, a minute book that does not exist, one founder holding shares the other thought were shared, or IP still owned by a founder personally. Each is fixable, and each costs more to fix during a financing or a sale than at the start.

Incorporation packages

Each is quoted at a fixed fee, including the government filing fee and the name search where needed, after a free 20-minute call.

Should you incorporate at all?

Not always. A sole proprietorship is simpler and cheaper, and incorporation brings annual filings and separate corporate tax returns. Incorporation usually makes sense once there is meaningful liability risk, profit you can leave in the company, more than one owner, or investors on the horizon. See incorporate or stay a sole proprietor. Physicians, dentists, accountants and other regulated professionals incorporate under special rules; see professional corporations.

Decide these before you file.

01
Name or Number
Named company with a NUANS search, or a numbered company.
02
Jurisdiction
Ontario, or federal with provincial registrations.
03
Share Classes
Voting, non-voting, and any classes for family or investors.
04
Directors
Who sits on the board from day one.
05
Registered Office
An Ontario address where records are kept.
06
Owners’ Deal
Shareholder agreement and founder IP assignments.

Questions about incorporating.

How much does it cost to incorporate a business in Ontario?

The Ontario government filing fee for articles of incorporation is $300 through the Ontario Business Registry. A named corporation also needs a NUANS name search report. Legal fees for incorporation and organisation at Smutylo Law+ are quoted as a fixed fee, which depends on the share structure and whether you add a shareholder agreement or other founder documents.

Should I incorporate provincially in Ontario or federally?

An Ontario corporation is usually simpler for a business operating mainly in Ontario. A federal corporation offers name protection across Canada, but must also register in each province where it carries on business, must file information about individuals with significant control with Corporations Canada, and must have at least 25% resident Canadian directors.

What is the difference between a numbered and a named company?

A numbered company uses a number assigned by the government, such as “1234567 Ontario Inc.”, and needs no name search. It can still operate under a registered business name. A named company carries a name of your choice, which requires a NUANS search report and must meet the province’s naming rules.

Can I incorporate my business myself?

Yes. The Ontario Business Registry allows anyone to file articles of incorporation online. The filing is the simple part; the share structure, organisational resolutions, share issuance, registers and agreements between owners are where errors tend to be made, and those are harder to fix later.

Does an Ontario corporation need a Canadian resident director?

No. Ontario removed the requirement that at least 25% of directors be resident Canadians in July 2021. Federal corporations under the Canada Business Corporations Act still have that requirement.

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