The Cost to Incorporate in Ontario: The Basics of Starting a Business
Starting a business can be exciting, but not without its challenges. One of the most important steps in starting your own business is incorporation which entails creating a legal entity that will act as the owner of your company. You’ll need to comply with legal requirements and pay applicable fees for this process. Incorporation is an easy process, but it does take time and money. To help you understand the process from start to finish, we’ve created a step-by-step guide on the cost to incorporate in Ontario.
The Basics of Incorporation
Forming a legal entity like a business is one of the most important steps you can take in starting your own business. Not only does incorporation act as your legal identity, it also allows you to take advantage of tax savings and benefits like automatic protection from creditors and employees. It’s also a good idea to have your business structure in order before you start taking on any work. However, when you start a business, you’ll need to comply with provincial and federal requirements. First, you’ll need to register your company with the government. If you have a physical office or are paying employees, you’ll need to register the business with the province in which you operate. You can register your company online or in person.
What is the cost to incorporate in Ontario?
The first thing you’ll need to consider is whether you’ll be incorporating with a Canadian corporation (CC) or a domestic corporation (DC). A CC provides tax benefits to the owner while a DC doesn’t offer any special tax treatment. Companies that are incorporated with CC status are required to pay corporate income tax on all earnings. This means that owners will pay approximately 40% corporate tax on any profits, regardless of how they earned those profits. You can only incorporate with a CC if you have a full time job or a source of regular income. You’ll also need to be incorporated in Ontario if your company has more than $100,000 in annual revenue. You can only incorporate with a CC if you have a full time job or a source of regular income.
The time it takes to incorporate
The time it takes to incorporate a company in Ontario depends on the type of business you’re starting. The most common service that Canadian incorporation agencies provide are a limited company or a corporation. By converting a business into a limited company, you’ll need to file and complete an application and pay the annual fee of $550 for every incorporated member. After filing the application, the ministry of finance will analyze the application for compliance and charge you an additional fee of $36 if you’re found non-compliant. If you’re going to incorporate as a corporation, the process is much quicker. You need only to file an application and pay the $1,150 application fee for each incorporated member.
Why should I incorporate my business?
While incorporation isn’t necessary if you plan to work from home, it is a necessary step in starting a business that’s made it easier for entrepreneurs to operate in Canada. Most entrepreneurs have questions and concerns about incorporating their company, and they feel that obtaining a small business loan is a more reliable way to get funds for their business. If you’re unsure whether it’s better to take out a small business loan or incorporate your company, the benefits of incorporating are almost always greater than the benefits of obtaining a small business loan. Here are just some of the advantages: An entity is easier to pay taxes on: When a company is incorporated, it becomes a legal entity. It can receive a number of tax credits.
Conclusion
Having a business can be a great thing, but you’ll need to invest time and money to get it off the ground. After reading this blog post, you should have a better idea about the cost to incorporate in Ontario.