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Your Next Business Move: Incorporating

January 31, 2011 - Tags: Managing

Istock 000002431100xsmallFinding the right type of incorporation for your business depends on your particular situation and needs. You may have a sole proprietorship or partnership now, but in the future you may wish to expand your operation, or need more information on why you should choose incorporation.

First, you will need to decide if you want your registered office to be located locally within one province or territory or whether you want the flexibility of being located anywhere in Canada. You may only be interested in keeping your business within your province or you may want to expand on a more global scale.

Some of the benefits of incorporation are:

  • Separate identity – separate legal status from those involved in the business
  • Limited liability – shareholders not responsible for debts, obligations and liability
  • Lower corporate tax rates – business is taxed separately from owners
  • Greater access to capital – financial institutions often see incorporated businesses as less risky
  • Continuous existence – even upon death of owners transfer can be made to shareholder heirs
  • Name protection – either within the province or territory or across Canada

Another factor that may help you decide is the cost to incorporate. Incorporation fees are dependent on the type of incorporation you choose or the location. You may also be required to file reports on an annual basis, depending on the type of incorporation you choose.

To learn more, check out our forms of business organization section.

Comments

Hi,
i am in the process of developing a hand tool for the canadian market,potential custommers big building centres, home stores etc.

I am planning to get the tool manufactured by a local company and my company would be resposible for sales and distribution with a minimum of employeees.

At the moment my status is sole proprietorship, located in BC. What would be the best business structure for me?

Thank you,
Josef

By Josef on February 1, 2011

How much minimum capital do I require to form a corporation?

By Nelson on February 2, 2011

It’s been a while since i applied for incorporation, actully since march 2006, but my question is what is covered as the scope of business activity under my incorporation?

i just dont remember and am not sure how to find this out.

please send me a response.

Sincerely,

Louise

By marie-louise on February 5, 2011

Hello Nelson,

There is no minimum capital required to incorporate your business. However, you will be responsible for paying the costs associated with setting up the corporation, and for any professional service fees you incur, such as legal counsel or accounting services.

You can learn more about incorporation by visiting Corporations Canada’s Guide to Federal Incorporation or by contacting Corporations Canada at 1-800-328-6189 (TTY 1-866-694-8389).

You may also want to visit our section on Forms of business incorporation.

Best of luck incorporating your business!

By Canada Business on February 7, 2011

Hi Josef,

You can visit our Forms of business organization section to learn more about the pros and cons of sole proprietorships, partnerships, corporations, and cooperatives. Keep in mind that each form of business organization has unique regulatory requirements, tax obligations, and levels of liability.

Best of luck moving forward with your business!

By Canada Business on March 3, 2011

I’ve aleadry registered my business as sole proprietor. How do I change it to be federally incorporated? The NUANS report shows my existing registered business name. Thank you, Corrinna

By Corrinna on May 14, 2011

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