Incorporation is a kind of corporate ownership that establishes an independent legal entity from the proprietors or stockholders. It’s also a significant factor to consider for businesswomen who wish to start or grow their businesses.
However, research on the condition of women’s entrepreneurship in Canada found that women are more likely to work alone and less likely to incorporate than men. Therefore, these conditions often force female entrepreneurs to put their financial security at stake.
In addition, women-owned businesses are in danger of missing out on crucial funding, government incentives, tax benefits, and other small company discounts if they do not incorporate their businesses.
Why do you need to incorporate?
As your business starts or expands, incorporation might be the best business structure. Incorporation is advantageous for business owners since owners have limited liability including the firm’s debts, liabilities when there is no personal guarantee, once incorporated. When you incorporate a business in Ontario, you basically establish a legal entity.
Because a corporation is considered a legal entity distinct from its owners, it bears all liabilities. As a result, it safeguards the owners’ assets. This might be an appealing alternative for female entrepreneurs.
Moreover, your company has access to financing and subsidies reserved for incorporated businesses by incorporating. Keep in mind, though, these government grants and loans may have a substantially greater value.
How to incorporate a business?
Incorporating a business is thought to be a lengthy and time-consuming procedure, but with the right company, it doesn’t have to be. Here are the steps in incorporating a business in Ontario:
1) Choose A Name
The first stage in the incorporation process is choosing a business name. Your company may have a business name in the form of a word or words or you can incorporate as a numbered corporation. A numerical name is the most straightforward approach to name your business since the government will provide the number. However, this does not provide any uniqueness to the business identity and is commonly used for real estate holdings, etc. where the name of the business is not necessary.
Unless you want your business to be known by a number, you must get an original Newly Upgraded Automated Name Search (NUANS) report completed before incorporating your business name. NUANS is a computerized business name search system. Using a database of established corporate groups and registrations, a NUANS report verifies a suggested name or trademark against existing ones. In addition, it generates a list of names that have been deemed the most similar.
Alternatively, if you wish to register a business, you can do so by completing the business name registration Ontario. You’ll probably want to establish a website for your business. This necessitates the acquisition of a domain name. Therefore, you’ll want to verify the availability of domains. Additionally, you might want to consider trademarks, logos, and similar items and get sufficient ownership of them. Essentially, you want to assure their security before committing to them.
2. Accomplish the paperwork
After deciding on a name, the next step is to accomplish the necessary paperwork. Canadian businesses can choose to incorporate federally or provincially. Before choosing a jurisdiction, make sure you consider what your plans are for the business. If you intend to do business outside your territory or province, opting for federal incorporation is a wise decision. Otherwise, incorporating provincially might be a good choice, since it’s a faster, cheaper way and will need fewer requirements and administrative procedures.
The Ontario Business Corporations Act (OBCA) governs incorporation in Ontario. Hence, it involves the filing of the Articles of Incorporation. The Articles of Incorporation must contain the corporation’s name or legal ending for a numbered corporation and the names of its directors.
The additional requirements to incorporate in Ontario whether for a named or numbered company include
- Corporate Address
- Directors Address and Citizenship (it is not necessary to be Canadian to incorporate in Ontario
- Business Industry and appropriate Naics Code for business activity
- Share structure where templates are available for one or two classes of shares or custom structure can be provided
- Minimum and Maximum number of directors
3. Submit The Document And Pay The Fee
Once you’ve completed your paperwork, you’ll need to submit them. The filing fee in Ontario is between $300 and $360. You can pay these fees online, via email, or mail.
If you’re registering as a named business or a numbered one, the Ontario government will typically complete your paperwork within the same day. Your business will then be assigned a corporate number.
You’ll also receive a certificate of incorporation. At that time, your business becomes legally recognized as a corporation.
One of the best ways to address the challenges faced by female entrepreneurs is to encourage incorporation. If you’ve decided to incorporate your company, you’re on the correct path. The straightforward incorporation procedure discussed in this blog will benefit female entrepreneurs considering this next stage in their business journey.