Incorporation Registration
To Incorporate or Not to Incorporate
The decision to establish either a sole proprietorship or a partnership is driven, to some extent, by the particular circumstances of the owner(s). This is not necessarily the case, however, with incorporation, which brings your business to an entirely different level. For the advantages you gain by incorporating, you might lose something you valued in the other business models. Here again, the informed decision is likely to be the best decision.
Is Your Business Best Served by Incorporation?
There are many websites with information about incorporating, including those of the federal and provincial governments, but they will suggest that you consult a lawyer for clarification and specific legal advice. The Government of Canada’s website, for example, warns, “Corporations Canada staff does not provide legal advice. Staff will only advise clients with regards to whether or not a filing will be accepted”.
In order to decide if incorporating is a good fit for you personally and whether or not it will best serve your business, as well as to ensure that your venture has every possible opportunity to succeed, follow the government’s recommendation and obtain the advice of a lawyer. Choose one with a strong background in business and corporate law: a preliminary consultation with Howard Nightingale can help you decide whether or not you and your business will be best served by incorporation.
What Would Be Discussed at an Initial Consultation?
Howard Nightingale tailors the discussion to the client’s needs. For example, someone considering a first entry into an incorporated business will likely want to start with basic considerations such as:
- Incorporation eligibility
- Whether to incorporate federally or provincially
- A review of the advantages and disadvantages of incorporation
- Determining whether sole proprietorship or partnership might be a better fit
- Explaining the process of incorporation
At this point the client should be better equipped to determine whether to incorporate or to begin with one of the other business models with a view to incorporation if and when the business warrants it.
An example of this decision making process concerns the tax considerations of incorporating:
If clients expect losses during the start-up phase, these can be applied against their personal income, giving them a tax benefit. In this case, clients might not wish to incorporate until the business is more profitable. However, when the company’s earnings are more substantial, including after-salary and expense profits, that might be the right time to incorporate in order to gain the advantage of the lower corporate tax rate. When you know the applicable laws and regulations, you then need to strategize so as to use them to your best advantage.
Registering Your Corporation
For clients who choose the corporate business model, Howard Nightingale will provide all services required to successfully incorporate your business and ensure it begins on solid ground, including:
- Incorporating in Ontario, or if needed, incorporate federally and register the business in Ontario
- Select and register a corporate name. This can be the assigned number (i.e. 1000987654 Ontario Inc.) which is an easy and inexpensive method, or choosing a name that suits your company and that can attract clientele, but which requires more time and effort to register, using the government’s NUAN system to search, validate and finally, to register the name.
Prepare and arrange for the execution and filing of the articles of incorporation. These determine the structure of your business, including:
- The number of directors
- Setting the type and number of shares to be issued
- Restrictions on share transfers
- Prepare share certificates
- Restrictions on the type of business that the corporation can operate
- Complete security registers and registers of officers, directors and shareholders – Prepare all Notices, the minute book and the corporate seal
- Consult with corporate accountant to ensure we use the correct share structure
- During the registration process, ensure that required accounts such as HST, Payroll and WSIB are requested
Provide for an agreement of dissolution. For a discussion of its importance, please review our blog, “The Ying and Yang of Choosing the Right Business Model; Part 3 – Incorporation.”
At all times, Howard Nightingale not only advises and consults, but listens to your concerns and needs because, ultimately, it is your business.
Frequently Asked Questions
Online “DIY” services often provide generic documents that don’t account for your specific tax needs or future growth. A lawyer ensures your Minute Book is properly set up, your share structure is optimized for tax savings, and your bylaws actually protect you in a dispute.
Since 2023, corporations must maintain a register of individuals who own or control at least 25% of the shares. This is part of a government effort to improve transparency and prevent financial crimes, and it is a mandatory part of your annual corporate maintenance.
The share structure defines who owns the company and what rights they have (voting vs. non-voting). Even if you are the only owner, we recommend a flexible structure that allows you to bring in partners or issue dividends to family members in a tax-efficient way later on.
Yes. If you don’t need a specific brand name right away (e.g., 12345678 Ontario Inc.), you can incorporate as a numbered company. This is faster because you don’t need a NUANS search. You can always register a “Doing Business As” (DBA) name later.
This is the foundational document of your business. It sets out the corporation’s name, the province of the registered office, the classes of shares, and any restrictions on the type of business the corporation can carry out.
As of 2026, the combined federal and provincial small business tax rate in Ontario is approximately 12.2% on the first $500,000 of active business income. This is significantly lower than personal income tax rates, which can climb above 50%, allowing you to keep more profit in the business for growth.
A NUANS (Newly Upgraded Automated Name Search) report is a mandatory search that compares your proposed business name against existing trademarks and corporations across Canada. It ensures your name isn’t “confusingly similar” to another business, which helps prevent future trademark lawsuits.
No. Ontario removed the requirement for directors to be Canadian residents in 2021. This makes it much easier for international entrepreneurs to set up and manage a business locally in Toronto and across the province.
If you plan to operate strictly in Ontario, provincial incorporation is often simpler. If you plan to expand across Canada or want the highest level of name protection, Federal incorporation is better. However, Federal corporations operating in Ontario must still register provincially as an “extra-provincial” entity.
Incorporating creates a separate legal entity from yourself. This means the corporation can own property, sign contracts, and even be sued, while your personal assets (like your home and savings) remain protected from the corporation’s liabilities.
Your information will always remain private and confidential.