Incorporating in Canada is a great way to achieve certain benefits and advantages for your business However in order to successfully complete this process there are certain steps that must be followed. If you do not follow the proper steps and meet all requirements for the process, the mistakes may be costly for you and your business. Use the following tips to ensure you go through the proper avenues to successfully incorporate your business.
Tip: Select your businesses name
When you begin the incorporation process you are likely to already have a name for your business. However, you need to take the time to ensure that the name you wish to use is available for incorporation use. This holds true if you have not yet selected a name for your business, as well. When selecting a name you need to choose something you can live with for a long period of time. The Canada Network offers useful resources for the naming process.
Tip: Apply for your business number
In order to successfully incorporate your business you need to apply for a business number. This is a nine digit number that will never change. Additionally, the number will serve as a method of identification for your newly formed corporation. However, if your business is based out of Quebec, you need to obtain a NEQ, which is only required in this area.
Tip: Is federal or provincial incorporation right for you?
Incorporating in Canada requires you to decide if you will incorporate on the federal level or the province level. For smaller businesses, who are located in a central location, provincial incorporation will likely suit your needs. However, you should understand that incorporating federally will allow you to operate business anywhere in Canada. Simply incorporating on the provincial level will limit you to only conducting business in the provinces where you have become incorporated. Additionally, federal incorporation comes with certain tax benefits, when the province incorporation does not provide these benefits. For example, you can have your tax money that is paid in during the year refunded by the Canadian government at the end of the year.
Keep in mind if you opt to simply become incorporated in the province where your actual business resides you must register with every province or territory you wish to enter to conduct business. Being non-compliant with these requirements can result in hefty fines and penalties for both you and your corporation. Keep in mind that Quebec has their own set of standards and requirements to conduct business or become incorporated. They are much more stringent than some of the other provinces in Canada.
When you begin the incorporation process, it may be a good idea to seek legal representation. The advice of a professional who has dealt with incorporation issues before may be extremely beneficial to your process. They can provide you with advice, guidance and help to ensure that you meet all the requirements and standards that are expected to become a licensed and legal incorporation in Canada.