Business Start-up Guide: Post-Incorporation Steps

Congratulations on your brave decision to embark on a business journey, a path filled with potential rewards and inherent risks. Assuming you’ve chosen the right business structure, let’s delve into the subsequent steps: 

1. Business Structures Overview:

• Sole Proprietorship: A straightforward business model where the owner is personally liable for all business debts. It offers limited tax planning opportunities and makes transferring ownership challenging. 

• Partnership: This involves two or more individuals forming a business. Its advantages and disadvantages are akin to a sole proprietorship. 

• Corporation: A recommended business structure, corporations are separate legal entities. They can own assets, enter contracts, and provide personal liability protection and tax planning opportunities. 

2. Shareholders – Who Are They? If you’ve chosen a corporation, decide on your shareholders. Will they be friends, family, or just you? Corporations can issue various share classes with different rights, including voting and non-voting shares.

3. Registering with CRA and Other Agencies:

• Business Number (BN): A tax ID for businesses, similar to the SIN for individuals. 
• HST Number: Businesses with sales exceeding $30,000 in four consecutive quarters must register. Even if sales are below this threshold, voluntary registration is possible. 
• Payroll Account: Necessary if hiring employees. It tracks payroll liabilities. 

• Employee Health Tax (EHT): Applicable if your payroll exceeds $450,000 annually. 
• Workplace Safety and Insurance Board (WSIB), Ontario: Mandatory if hiring employees. It provides coverage for loss of earnings and healthcare. 

4. Insurance, Licenses, and Trademarks: Ensure you have the necessary licenses for your industry. Consider liability insurance for protection against potential claims. If you’ve developed a unique product or concept, consider registering a trademark or patent.
5. Business Banking: Open a bank account for your business. Banks typically require incorporation articles or a Master business license. Consider obtaining a business credit card.

6. Hiring – Employee or Contractor? Decide on the nature of your hires. Contractors offer flexibility and reduced paperwork, while employees might provide loyalty and long-term performance. Ensure you understand the legal implications and responsibilities of your choice.

7. Accounting, Bookkeeping, and Taxes: Maintain accurate and timely records. Understand your financial metrics to ensure business longevity. Depending on your structure, you’ll need to file various tax returns. Consider investing in accounting software or hiring an accountant for expertise and tax planning strategies.