Q: What is a corporation?
A corporation is a distinct and separate legal and tax entity from its owner(s). A corporation has its own rights, privileges and liabilities distinct from those its owners or managers. A corporation is owned by its shareholders and is managed and controlled by its board of directors who appoint the officers and agree on the policies and transactions to be undertaken by the corporation.
Q: What are the advantages of incorporation?
Continuous Existence - A corporation will continue to exist until it is formally liquidated.
Limited Liability - The shareholders are protected by limited liability rules. This means that the extent to which the shareholder is responsible for the corporation's debt is restricted to the amount that the shareholder has invested in the company; unless that shareholder has made a personal guarantee against the corporation's loans.
Financing Options - A corporation usually has a wider range of financing options available to it. For example, it can issue different classes of shares and issue bonds. Corporations also tend to be more likely to obtain loans from financial institutions.
Prestige - Corporations tend to be more highly regarded than sole proprietorships and partnerships.
Property Ownership - Corporations can hold the legal title to property.
Ability to Enter into Contracts - Corporations are a separate legal entity and hence can enter into contractual agreements.
Tax Benefits - Corporations benefit from lower rates of income tax and can bring forward losses from previous years to offset the profits from the present year. Please consult with your accountant or tax professional for advice on the best course of action for your situation.
Q: What is a named corporation?
Definition - A named corporation is one that is incorporated under a name, as opposed to a number.
Name Search - In order to incorporate a named corporation, a name search must first be performed to check the availability of that name. In Quebec, a name search is valid for 60 days from the date of the report. For Ontario and federal incorporations, the NUANS® name report is valid for 90 days from the date of the report request.
What is a NUANS® search or NUANS® report?
In order to incorporate a named company (as opposed to a numbered company), a NUANS® search must first be conducted to check the availability of the desired name. Once a NUANS® search is done, a NUANS® report is generated which is presented to the government along with the incorporation documents. If the name you have selected is confusingly similar to another company's name or contains words that are not permitted, there is a good possibility that the government will reject your desired name. NUANS® searches can be nationwide or specific to a particular province.
If you incorporate your company through us.
Free pre-searches included with the purchase of a NUANS® report.
Please note: By doing a pre-search we are doing our utmost to eliminate
unnecessary name searches, but they are not infallible, and sometimes
names that are similar will appear on the name search report.
Choosing a Name - If the name you have selected is confusingly similar to another company's name or contains words that are not permitted, for example UN or obscene words, then it will be rejected.
Required Elements - The name you choose must have a distinctive element and a legal element. It may also contain a descriptive element but this is not compulsory. Let us look at the name "Atrexelle Hardware Ltd". "Atrexelle" is the distinctive element. The more distinctive it is, the better your chance of having the name approved. "Hardware" is the descriptive element, which informs people of the nature of your business. "Ltd" is the legal element.
Legal Element - you can choose from Incorporated, Corporation, Limited, Inc, Corp or Ltd.
Q: What is a numbered corporation?
Definition - A numbered corporation is not incorporated with a name but with a number generated by the government.
Trade Name - Following incorporation, a trade name can be registered and the company can carry on business using the trade name instead of the number granted on incorporation. For example, Atrexelle Manufacturing div. of 1234567 Canada Inc. Please note that a trade name cannot be ended with a legal element such as Inc, Corp etc.
Formalities - However, for all legal and government paperwork, the company will be referred to by its number rather than its trade name.
Q: What documents are required to incorporate?
If you incorporate through us you only need to fill in INCORPORATION FORM.
We will guide you through the entire process and guarantee that your experience of incorporating with us will be easy and straightforward.
We will prepare and submit all the relevant documents on your behalf and inform you on the progress of your application.
Q: How much does incorporation cost?
Pay just $50 and the regular government fee of $355 and get your Ontario corporation incorporated and ready for business in 0.5 to 3 business hours .
Our company offers 2 incorporation packages, which are suitable for different group of clients and business activities.
Ontario Incorporation Packages
Certificate of Incorporation
Articles of Incorporation
Ontario Government Fee ($300 included)
Electronic filing the incorporation documents with the appropriate government department ($55 included)
Form 1 Initial Return
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Minute Book with a high quality leatherette cover, resolutions, ledgers, By-Law and Share Certificates, initial applications to open Government accounts (HST, Payroll, Import/Export)
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NUANS® Name Reservation Searches for the following jurisdictions: Federal, Ontario, Alberta, New Brunswick, Nova Scotia and Prince Edward Island.
$60.00 + HST
Basic Package includes incorporation of an Ontario corporation with all registration documents required for opening a corporate bank account and starting business. The package does not include corporate documents for internal use, such as organizational resolutions, By-Law and share certificates. Minute Book may be ordered at any time in the future, when you actually need them.
Enhanced Package includes Organaized Minute Book with a high quality leatherette cover, resolutions, all required registration documents and internal corporate documents including By-Law, resolutions issuing shares, electing corporate directors, appointing officers, confirming By-Law, Shares Certificates, Form 1 and all required applications to open Government accounts (HST, Payroll, Import/Export).
Q: What is a minute book?
Definition - A minute book is used to store all important corporate documents such as the articles of incorporation, the minutes of shareholders and directors meetings, stock certificates, tax filings, by-laws and other legal documents.
Benefits - For ease of management, efficiency and security, it is vital that these important corporate documents are kept in a single location, so that it can be easily consulted when the need arises.
Q: Why do I need a minute book?
It is essential to keep a history of all important decisions that are made in the company and to demonstrate that the company is acting as a corporation. For example, if you want to sell your company in the future, the buyer's lawyer will normally ask to see a copy of the minute book. Also, if there is a dispute about a company matter, the minutes can act as an official record of events. Your accountant will require your minute book to prepare your financial statements.
The Canada Business Corporations Act (CBCA) does requires that certain corporate records be lodged at the company's registered office or elsewhere in Canada as laid down in the by-laws. The shareholders and creditors of the company may view these records on request. These records are the:
• articles, by-laws and a copy of any unanimous shareholder agreements
• minutes of meetings and resolutions of shareholders
• copies of Form 6 - Notice of Directors or Notice of Change of Directors that have been filed
• share register showing the names and addresses of all shareholders and details of shares held
Many individuals choose to incorporate their businesses to enjoy many advantages (for example, limited liability) but often choose not to (or are not aware of the need to) keep their corporate minute book current.
“Maintaining” Minute Books is the process of recording in your corporate minute book at least annually (or in some cases more frequently) the following events:
• appointment of the directors and officers for the ensuing year;
• appointment of the accountants for the ensuing year;
• approval of the financial statements for the prior year;
• recording all shareholder loans made to/paid by the corporation for the prior year;
• recording all declared dividends (either taxable or capital dividends) for the prior year;
• recording all management bonuses paid by the corporation during the prior year; and
• recording all share transfers, changes in fiscal year end or other key circumstances which did not get recorded at the appropriate time during the prior year.
There are at least three (3) good reasons to maintain your company's minute
Firstly, it’s the law. The governing Canadian corporate statutes do impose legal obligations to maintain minute books in the manner described above. Although rare, statutory penalties may be assessed for failure to attend to these matters.
Secondly, various third parties may want or need to examine your corporate minute books from time to time including your accountants, bankers or Canada Customs and Revenue Agency (“CCRA”) or other federal/provincial taxation authorities.
Thirdly, if you ever sell your business, the purchaser may want legal opinions relating to various corporate matters so having up-to-date minute books will make the entire selling process easier (and likely less expensive).
Here are two examples of how properly maintained minute books can save you money, time and headaches:
EXAMPLE 1: You advance a $20,000 loan of your after-tax dollars to your corporation to fund various start-up expenses. Three (3) years later, the company is profitable and you take $20,000 out of the business to fully repay your personal shareholder loan. As the repayment was merely a return of your original loan capital and not salary, bonus or other income, you did not declare this amount on your personal income tax return for that year. In the following year, CCRA is conducting an audit of your corporation’s tax affairs and discovers that a $20,000 payment was made to you in the prior year and that you did not record this $20,000 as income in your personal tax return. You explain to the CCRA auditor that this was merely a loan repayment and not income but you cannot provide CCRA with any written evidence of this in the minute book (e.g., no promissory note, no board resolutions – nothing). Since you have no written evidence that the $20,000 was properly characterized as a loan repayment, CCRA takes the position that it was income and re-assesses you for personal income taxes on this $20,000 leading to a large tax bill which you did not plan for. To make matters worse, the corporation may not be able to deduct this $20,000 as an expense (which would have been the case had this $20,000 been paid to you as a reasonable bonus or salary amount). All of this may have been avoided with proper advance planning and minute book documentation.
EXAMPLE B: You received $20,000 from the corporation as a dividend of current net income. As you know, the rate of taxation on dividends is lower than the rate on ordinary salary or bonus income. However, again, if there is no evidence in the minute book that this $20,000 was received by you specifically "as a dividend", CCRA may challenge any dividend characterization and take the position that the $20,000 was merely salary or bonus and taxable as ordinary income NOT dividends.
As you can see, minute books should be maintained and the fixed annual cost is quite minimal in light of the benefits discussed above.
Q: How much does your minute book cost?
Our fee is $75 (with the purchase of an incorporation) for a minute book with a high quality leatherette cover or $95 on its own. Please note that taxes and shipping are extra.