Incorporating in Ontario: Guide 

Incorporating a business in Ontario involves creating a separate legal entity distinct from its shareholders, unlike partnerships or sole proprietorships. This process offers several benefits, including limited liability, lower tax rates, easier access to capital and grants, and perpetual existence. However, these advantages should be weighed against the costs of incorporation. 

Businesses can choose between federal and provincial incorporation. Federal incorporation, governed by the Canada Business Corporations Act (CBCA) and managed by Corporations Canada, allows a business to operate nationwide and offers national name protection and international recognition. Provincial incorporation, on the other hand, limits operations to the province of incorporation and offers name protection only within that province. The process involves contacting the provincial registrar, and forms are available on their website. 

The key document for incorporation is the Articles of Incorporation, which outlines the corporation’s regulations and purpose. This document requires information such as the corporation’s legal name, address, director details, share classes, and restrictions, among other things. 

The cost of incorporating in Ontario varies. As of 2019, incorporating via mail or in person costs $360, while online incorporation through a service provider contracted with the Ontario Ministry of Government and Consumer Services costs $300, with potential additional charges for online services. Initially, Ontario corporations may be more expensive than federal ones, but federal corporations tend to be costlier in the long run. Additional fees may include costs for corporate seals, provincial registration, annual report filing, and corporate tax return preparation. 

The time required for incorporation depends on the method chosen. Provincial incorporation can be completed in about 2-3 business hours, as the documents are filed automatically. Federal incorporation takes longer, usually 1-2 days, due to a more thorough review process, including the examination of the NUANS report to avoid name conflicts. 

In summary, incorporating in Ontario offers significant benefits but requires careful consideration of costs, type of incorporation (federal or provincial), and the preparation of necessary documents. The process can be relatively quick, especially at the provincial level, but varies based on the chosen method and the thoroughness of the application review for federal incorporation.