|
Incorporating a business in Canada has several key benefits.
- Shareholder risk is reduced with limited liability
- Corporate tax rates can be leveraged to reduce taxes
- Incorporated businesses generally have a better professional image
- Global business opportunities are generally easier to come by
Where would a business entrepreneur start a Canada company formation?
Here are the basic steps for beginning this worthwhile process:
- Decide if the business should be incorporated provincially or federally.
A federally incorporated business can trade in all territories.
However, there are more set up costs and additional paperwork to incorporate federally in Canada.
If the business is provincially incorporated, that business can only operate in the province specified.
- Determine the appropriate name of the corporation.
The Registrar will require the business name to be unique for the region of incorporation.
Also the name should specify if the business is limited, incorporated, or a corporation.
The business name can be in English, French, or both.
It is a best practice to have three different name choices available.
- Complete the Articles of Incorporation and other paperwork.
The Articles of Incorporation is a formal document that outlines how the business plans to operate and the conduct for the company officers.
Also documents such as The Memorandum (overall rules for company conduct), The Notice of Offices (specifies the locations for the registered office and the records office), and Notice of Directors (for federally incorporated businesses) should be completed.
Depending on the province, there are potentially additional documents that are required.
- Submit the paperwork and payments.
Most of the forms can be submitted online through the Corporations Directorate or the provincial registry websites.
Also, forms and fees can be submitted via regular mail.
- There is initial registration and start up expenses, which can vary depending on the type of incorporation that is formed.
- Additional paperwork is required such as corporate meeting minute records, bylaws, a register of directors, a share register, and other documents depending on the province requirements.
- A separate tax return must be filed for the corporation in addition to any personal tax returns.
- While there is limited liability protection with a corporation, the individuals may still have some liability when it pertains to personal guarantees or any credit agreements involving the individuals.
When considering a Canada company formation, there are also some disadvantages that a business owner should consider.
All things considered, business owners should seriously consider incorporation for a Canada company formation.
With the right amount of management and time allocated to maintaining the documentation, the return on this investment would be worthwhile for any Canadian business person.
This article was written by Karen Neal, an expert in the Small Business: Canada category at www.yoexpert.com
|
|
