When you want to start a business in Ontario, one of the most important decisions is to select a company entity. And the common form of business among entrepreneurs in Ontario is corporations. This involves creating a legal entity separate from its members. In other words, the business you establish will do most things in its own name. For instance, it can sign contracts, sue, and get sued in its own name. Incorporating a business is ideal for protecting personal assets against creditors and lenders.
Another motivation to incorporate a business in Ontario is that it can make it easier for you to find external financial support. There are types of loans and government grants designed only for corporations. By incorporating your business, it becomes eligible to access such sources of finance.
Incorporating A Business In Ontario
As mentioned above, incorporating in Ontario can be ideal for business owners who want to protect their assets against the liabilities and obligations of the company. If you’re considering incorporating a business in Ontario, here are the necessary steps:
- Choose A Business Name
First, you must choose a company name when you decide to incorporate a business in Ontario. This is the title your business will be known by. In other words, a company name identifies your corporation.
When choosing a corporate name, it’s important that no other business uses it. So, you have to conduct a business name search. You can do it online or visit the state secretary’s office. If the name is available, reserve it so that no other person will register their company with it. But you’ll be charged for the reservation.
- Prepare Articles Of Incorporation
Once you create a business name, the next step is to prepare articles of incorporation. This involves filing a set of documents with the state to document the establishment or creation of your corporation. Generally, the articles of incorporation contain details such as the business name, physical location, street address, number of authorized shares, and name of the agent for service of processes.
After you’ve filed the articles of incorporation, the secretary of the state’s office will review them to confirm whether they’re complete. Your corporation will become legal when the Ontario government accepts your articles of incorporation. This means you can’t incorporate a business in Ontario without preparing and filing articles of incorporation.
- Create Corporate Bylaws
Bylaws are rules and regulations governing the internal affairs of a corporation. They detail each company’s director’s duties, responsibilities, and obligations and how the business will be run.
They also describe the policies and expectations of shareholders and board members. In simple terms, the corporate bylaws document is a communication tool that ensures all company stakeholders are on the same page.
- Create A Minute Book
Once you’ve filed articles of incorporation and created company bylaws, you must create a minute book. This is a document you can use to detail all the activities and records of your company.
Some of the information you can keep in your minute book includes a copy of articles of incorporation, corporate bylaws, director’s register, minutes of meetings, and shareholders’ resolutions. You can add any document that entails other important information about your company.
- Obtain Business Licenses And Permits
Before you launch your corporation, you must obtain business licenses and other necessary permits. These are documents the Ontario government requires an entity to have to conduct business. The state government won’t allow you to run your company until you obtain the required licenses and permits.
The first step to obtaining business licenses and permits is to submit all the necessary documents to the office of the state’s secretary. You can do that electronically or take them to the state secretary’s office. Before submitting the documents, have them signed by the incorporator. You should also provide a cover letter with your name and contact information. This will help enhance communication between you and the agency responsible for the company’s registration.
Once the government is satisfied with your documentation, they’ll give you all the necessary licenses and permits. These include a master license to show that your business is legally established and other permits specific to your company. Once you obtain business licenses and permits, you can launch your company and find customers.
Takeaway
Incorporating a business in Ontario can be a great way to run a company. It allows you to form an entity separate from you. As such, you won’t be personally liable for the debts and other obligations of the business. Filing articles of association, creating company bylaws, establishing a minute book, and obtaining business licenses are the steps when incorporating a business in Ontario.
