Should I incorporate my business?

Incorporation offers several important benefits. It protects personal liability by separating personal assets from business risks, which is crucial in the event of a dispute or business debt. It allows for tax savings through lower tax rates and optimized tax planning strategies.

Incorporated businesses also gain credibility with banks and financial institutions, making it easier to access credit and investment. Finally, incorporation simplifies succession and retirement planning, allowing for a smoother transfer of assets and more effective management of pension plans. To learn more about the basics of accounting, check out our Accounting 101 consulting service.

Incorporating a business in Quebec or Ontario follows a structured process. The first step is to choose a unique name for your business. In Quebec, the name must be in French, while in Ontario there is no such restriction.

Next, draw up the articles of incorporation, the founding documents of your company. Submit these articles to the appropriate provincial government office along with the incorporation fees. Register for GST/QST in Quebec or GST/HST in Ontario, as well as with the Quebec Business Registry to obtain a Quebec Business Number (NEQ) or with the Ontario Business Registry by creating your OBR profile.

Open a business bank account to manage your finances professionally and transparently. Finally, obtain any licenses and permits required for your business. Each industry may have specific requirements. This process may seem complex, but good preparation and professional help from lawyers or accountants can make it manageable.

Consider incorporation when you want to protect your personal assets from business risks. This is important if your business is starting to generate significant profits, if you plan to raise capital or expand the business, if you want to take advantage of certain tax benefits, or if you plan to sell your business in the future.

Think about incorporating early if you expect your business to grow, as it can simplify the process of becoming a company. Talk to us about analyzing your situation to see if incorporation is right for you. To help you choose the best remuneration strategy, see our salary or dividend advice.

The cost of incorporating a business, whether federally or provincially, varies. The government fees in Quebec are approximately $378.00 CAD for a provincial incorporation. At the federal level, the fee for incorporation through Corporations Canada is approximately $200.00 CAD for online filing.

These amounts do not include professional fees. Hiring a lawyer or notary can add $500.00 to $1,500.00 CAD to the total cost. Annual maintenance and filing fees are also expected.

In Quebec, with a few exceptions, anyone can incorporate a business. This includes sole proprietors, partners in general partnerships and even other corporations. Incorporation is available to both residents and non-residents, although some restrictions may apply.

Professionals such as lawyers, accountants and doctors can also incorporate their practices, subject to the rules of their professional body. Consult our experts, especially if you are planning to incorporate a company with more than one shareholder. This is also important to understand the specific implications related to your situation and to ensure compliance with provincial and federal laws.

At T2inc.ca, our tax accountants work in conjunction with our partner attorneys to ensure compliance throughout the process of incorporating a business.