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Canada is a great country to do business. Its over one million small businesses (less than 100 employees) comprise 98% of all Canadian businesses (http://www.ic.gc.ca/eic/site/sbrp-rppe.nsf/vwapj/KSBS-PSRPE_Jan2010_eng.pdf/$FILE/KSBS-PSRPE_Jan2010_eng.pdf)
Starting a new business is not an easy task, and it requires knowledge and the right resources. This article is intended to serve as an Incorporation checklist for those who wish to take advantage of doing business through incorporating a company, benefits of which are numerous, as we have discussed earlier in our article “Benefits of Incorporating your Business”
STEP 1: Incorporate
Incorporation is the process of registering your new company’s articles of incorporation with the Ministry of Government Services. This can be done in person at the MGS offices, or online by using ESC Corporate Services’ eService Platform for easy online filings. Online incorporations are immediate, and filed Articles of Incorporation and Certificate of Incorporation will be issued to you in seconds in PDF form. Visit our Ontario Incorporations page for more information.
STEP 2: Adopt Bylaws
Corporate Bylaws are used to describe a company’s internal rules governing the management of the corporation. Directors’ and Officers’ duties and obligations towards running the corporation are covered by Corporate Bylaws. ESC Corporate Services offers full sets of Ontario and Federal Bylaws which, when ordered, will be delivered to your door next morning.
STEP 3: Create a Minute Book
Purchase a minute book to organize corporate documents. A minute book is a binder containing the documents and records that the law requires every corporation to keep. Minute books often include the following documents, amongst others:
- Articles of Incorporation
- Corporate Bylaws
- Minutes of Organizational Meetings
- Minutes of Shareholder and Director meetings
- Shareholder Agreements
- Copies of any and all forms filed with the government on behalf of the corporation
- Ledgers of directors, officers, shareholders and share transfers.
Creating and accurately maintaining a minute book of corporate documents is very important. Severe penalties can be associated with failure to properly keep corporate records, which in some cases may entail losing a company’s corporate status and the benefits that come with it, including limited liability for shareholders.
ESC Offers a wide range of convenient minute book binders with or without carriage slipcases in both sizes: legal and letter. Visit our Online Store to explore your options.
STEP 4: Obtain a Business License
Obtaining a business license is a vital step in order for your business to actually provide services to its customers. Most kinds of service providers need to be licensed prior to actually facing the customers. Contact the appropriate government office to find out if your line of business requires licensing. If your business is in a city, town, village, or district, contact the Municipal Business License Office in order to obtain a business license. Otherwise, you should contact the nearest Regional District Office.
STEP 5: Get a Business Number
Once the Ministry of Government Services files your Articles of Incorporation, your corporate information gets automatically sent to the Federal government. Federal government, once it is in receipt of your corporate incorporation information, immediately creates and sends to you by mail your new business number for your new corporation. When this information is received by you at your corporation’s address, you can open the following account(s) with Revenue Canada:
- GST account
- Payroll Deductions account
- Corporate Income Tax account
- Import/Export account
You can complete the application for a Revenue Canada account by using this form: Form RC1- Request For a Business Number (PDF)
STEP 6: Register with WSIB
If your business will or already has hired at least one employee, you should register with the Workplace Safety and Insurance Board. Call WSIB for more information and to register: 416-344-1000 in Toronto or 1-800-387-0750 toll free from outside Toronto.
STEP 7: Prepare a Shareholders Agreement
This step is optional. A Shareholder Agreement is a document that governs how a corporation will be managed, how it will resolve any disputes, what will happen if one or more shareholders die, and how the corporation will prevent shareholders from competing with the corporation itself.
STEP 8: Organizational Meetings
There are two types of Organizational Meetings: Directors’ Organizational Meeting and Shareholders Organizational Meeting.
Directors’ Organizational Meeting
Director(s) are required to hold their first organizational meeting and keep directors’ organizational minutes in order to:
- Approve the corporate bylaws
- Approve location of registered office
- Approve the corporate seal (if any)
- Approving the form of share certificate(s)
- Issue shares from corporation’s stock
- Appoint or Waive the Appointment of Accountants (optional)
- Appoint corporate Officers
- Create corporate bank account with the bank of choice
Hold Shareholders’ Organizational Meeting
Shareholder(s) of a corporation are required to hold their first organizational meeting and keep their organizational minutes in order to:
- Approve corporate bylaws
- Appoint or Waive the Appointment of Auditors
- Appoint or confirm corporation’s Directors
- Approve acts of the incorporators or directors
If you wish to carry out business in another province, contact ESC Corporate Services for more information on how to extra-provincially register in other provinces.