Guide to Incorporation
Posted by Larry Boychuk on 28 July 2014 04:10 PM
Your Guide to Incorporation
As an entrepreneur in Canada, you may be eager to incorporate your new business based on the advice of your lawyer, accountant, or even a fellow entrepreneur. Why? Simple - there are often many benefits of incorporating versus registering a Trade Name or Sole Proprietorship (Solopreneur). In the simplest terms, an Incorporation is a legal entity that generates revenues and files taxes. It provides a basic shield of protection to you, the businessperson, and the revenues of the Corporation will most likely be taxed at a lower amount than a solopreneur.
This document acts as your starting guide to incorporating your business, and the benefits of doing so through Arvic Search Services. Trade Name or Sole Proprietorship registrations are also described to help you make the best business decision.
Steps to Incorporating
In most jurisdictions, incorporating is a simple, two-step process:
1) Fill out the appropriate Incorporation Form online.
2) Complete the pre-registration confirmation stage that will come from the Arvic Staff.
Decisions, Decisions, Decisions
Before you even begin the online forms, you will need to make four key decisions.
1) Decide what type of Corporation you will be setting up; Provincial, Federal, Extra-Provincial, or Professional. For detailed information on each of these, please refer to page 2 of this document.
2) Will you have a Named or Numbered Corporation? This is a personal decision more than anything.
3) After completing your NUANS® pre-screen, decide if your name is strong enough to incorporate. For detailed info on this, see the Corporate Names section on page 3.
4) Decide which Arvic Incorporation Package and Corporate products you would like.
Required Information for Completing Online Incorporation Forms
Before you go to the incorporation forms on the Arvic website, you will need the following information on hand:
1) Addresses of the Corporation
2) Directors: Full names, addresses and identification number (such as Driver’s license Number) of EACH Director and their Officer Appointment position in the Company (i.e. President, Secretary, Treasurer, etc.).
3) Shareholder names and addresses: if we are to complete your Corporate Resolutions and issue your Shares as part of our Full Incorporation or Resolution Add On.
Articles of Incorporation: Are They Necessary?
One of the greatest benefits of using our Corporate Paralegal service is having access to our Lawyer and Accountant "Approved" Articles of Incorporation. Our complex set of shares will be able to continue to meet the needs of your business as it grows. Additionally, if you have specific share structure needs, we are able to accommodate this as well.
By using our Articles of Incorporation, you will save yourself the time and hassle of drafting your own articles, including the costs needed to amend those articles with the Registrar in a year or two when they are no longer relevant to your most current business structure.
Your Next Steps
The rest of the guide will help you make the decisions and gather the information needed to fill out your Incorporation forms.
And don’t forget… if you don’t like online forms, you can always give us a call. We are here to make your incorporation as easy and stress-free as possible!
There are two different levels of incorporation and your next step will be to decide which best suits your Corporate needs.
1) Provincial Incorporation
Most entrepreneurs choose a Provincial Incorporation. You select the Province in which you will do business, and Arvic incorporates you there. Nice and easy!
You are a Lawyer, Accountant or Physician starting your own practice. To do this, you need to have a Professional Corporation approved by your Profession’s Governing body. As this varies by profession, Arvic can guide you to the appropriate body.
If you will be a consultant or contractor that will now work on a per-contract basis with corporations, this is the best package for you.
2) Federal Incorporation
A Federal Corporation provides corporate name protection across Canada. However, a Federal Corporation cannot exist just on its own. It is meant to have an Extra-Provincial registration attached to it.
For example, if you have are going to be operating your Federal Corporation in Alberta, you would then need to file an Alberta Extra-Provincial Registration along with your Federal Corporation.
*Many Ontario corporations opt to incorporate federally so that they can take advantage of the free Extra-Provincial filing into Ontario.
If creating a separate Legal Entity through Incorporation isn’t in your best interest, then registering your business name as a Trade name or Sole Proprietorship in your Province or Territory is the step you will need to take.
Trade Name/Sole Proprietor
This registration is also known as a “Doing business as” or “Operating as” type of registration. A term that is also becoming popular is Solopreneur. Operating a Trade Name is less expensive and is a great starting point for your new business venture. Be aware though, Trade Names have no name protection.
This registration is used when you already have a Provincial, Federal, or Foreign Incorporation and you wish to register into a new Canadian jurisdiction.
Corporate Names come in many numbered or named varieties.
Numbered Corporations are traditionally faster to incorporate, and you can complete a name change later once you find the right corporate name that represents your company. When registering a Numbered Corporation, your number will be auto-generated (i.e. 78452158 Alberta Ltd.). This number becomes your corporate name.
A Named Corporation will need a NUANS® (Newly Upgraded Automated Name Search) or Name Reservation Report completed before the incorporation process starts. This Name Reservation Report will reserve your proposed name for 90 days to give you that time to Incorporate.
You can opt to have Arvic complete your NUANS®/Name Reservation Report at the same time you fill out your Incorporation forms, or you can complete the NUANS®/Name Reservation Report first.
We offer three free NUANS® Pre-Searches per NUANS® report ordered, allowing you to check your proposed corporate name availability before you purchase the official reservation report. The pre-searches can save you time and money, therefore, we suggest you use them and use them wisely. Read the NUANS®/Name Reservation Guide for more info!
Registered Office Address
This is the primary business address. It must be accessible to public during normal business hours and CANNOT be a PO Box. It needs to be a street address or a Legal Land description.
If you only have a PO Box, are a home-based business and do not want your home address accessible to the public, or if you move frequently, or do not have an address that is accessible to public on a regular basis, we suggest using the Arvic Registered Office Address service. For a yearly fee, the Arvic address will be listed as your Registered Office Address for us to receive your mail on your behalf. We will forward the Corporation’s mail to the mailing address you've provided us, file your Annual Return, and complete your Resolutions after your Corporation’s Anniversary Date on your behalf.
Provide a records address if this will be different than the Registered Office Address (i.e. a PO Box or home address).
Provide a mailing address if this will be different than the Registered Office Address (i.e. a PO Box or home address).
A Director is a person that manages the affairs of a Corporation and will also have an Officer Appointment, such as President, Vice President, Treasurer, and Secretary. All Directors and their information (address and identification numbers) must be included on your Incorporation forms.
A Shareholder is a person who owns shares in a Corporation. It is not a requirement to start the Shareholders of a Corporation at the time the Corporation is created with the Registrar. However, if Arvic will be completing Resolutions with your Minute Book, we will need the Shareholder information.
We will also need to know how many shares the Corporation will be issuing, (i.e. 100 shares) and what percentage each Shareholder will receive (i.e. 50%).
Articles of Incorporation
As Arvic is a firm of Corporate Paralegals, we have a set of Articles of Incorporation that are tailor-made for our clients and are very flexible. These articles are both lawyer and accountant “Approved”, however, if your lawyer or accountant has provided you with Articles, please feel free to supply them to us via email (preferably in .txt format) and we can use them when completing your incorporation.
Now that you know what all is involved with the Incorporation Process, please use our online Incorporation Order forms , or call for any questions left unanswered!