Oliver Xing
Chartered Accountant
203-255 Duncan Mill Rd.
Toronto, ON Canada M3B 3H9
Tel:416-510-2991  Fax:416-510-0851

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Tax & Accounting Services  Incorporation  Taxation  Tax Tips  Business Startup  News




1. Legal Entity


2. Corporate Name


3. NUANS Name Search


4. Articles of Incorporation


5. Minute Book


6. Permits & Licenses


7. Bank Account


8. Start Your Business


Business Startup

Starting a business can be a very challenging experience, from deciding on
whether to incorporate or not, who owns what to the array of license, taxation
and laws that must be learned.

Oliver Xing, Chartered Accountant provides complete services for both the
physical company formation as well as advice on what to do with your company once it is formed (tax, licensing, employment conditions etc.).  For more information on the tax and accounting services Oliver Xing, Chartered Accountant can provide for your business, please refer to Tax and Accounting Services.

The following are some basic steps in incorporating and starting your new

Step 1.   Choose the Legal Entity 

There are several ways to start a business, Choosing the most appropriate legal entity, Sole Proprietorship, Partnership or Corporations, for your new business is a very important step in starting your new business.  Each structure has advantages and disadvantages. Before you decide which business form is best, you should consider such aspects as personal liability, business name protection, tax advantages and registration or filing costs. 

Incorporation offers your business a number of advantages including business name protection, transferability of business ownership, limited liability and possible tax advantages. A corporation can be incorporated federally or provincially. The main differences are listed as follows:

Federal Incorporation

Provincial Incorporation

The corporate name is
protected across Canada.
Corporate name is only
protected in the province or
territory of incorporation.
Yearly Filings required with
Filing Fee
Filings only required for change
of information - no filing fee
Can operate across the
Can only operate within the
province of incorporation. Must
register extra-provincially if
operating in other Provinces.

For more information on incorporating a Federal or Ontario Corporation offered by  Oliver Xing, Chartered Accountant, please refer to Federal Incorporation or Ontario Incorporation.

Step 2.   Choose a Corporate Name 

Once the legal entity is decided, the next step is to choose a proposed
corporate name for incorporation which must be acceptable to the government corporation registration office. 

Corporate names can either be created by the incorporator, or they can be the corporate number assigned to the corporation by the incorporating jurisdiction (i.e. 123456 Ontario Inc.). A numbered corporation may be used where the incorporator will operate the business under another business name registered to the corporation (i.e. 123456 Ontario Inc. doing business as Jenny Cosmetics).

The following are some general guidelines when choosing proposed corporate names:

The proposed corporate name has to comply with the applicable law in
the jurisdiction.  Corporate names must generally not be the same or similar to that of any other existing business name or trademark.

Corporate names must end with a legal element consisting of Corporation, Incorporated or Limited, or the corresponding short forms Corp., Inc. or Ltd. 

If you intend to use any word such as College, University, or Institute, you
need get permission from, in Ontario, the Ministry of Education and Training.

Certain words are prohibited to use. They are the marks or names of Royal family and Government organizations, such as R.C.M.P.

Step 3.   NUANS Name Search 

A federal or provincial name search is required to decide the availability of the proposed corporate name by using the NUANS (Newly Upgraded Automated Name Search) system. A five-page NUANS report must be submitted for incorporation with the government unless you are incorporating a numbered company in which case a NUANS report is not required. For federal incorporation, a "Canada-biased" report is required. For an Ontario incorporation, an Ontario report must be obtained. 

For more information on ordering NUANS Name Search Report offered by Oliver Xing, Chartered Accountant, please refer to NUANS Name Search

Step 4.   Register Articles of Incorporation 

Business corporations must file articles of incorporation with appropriate
government agency.

The articles of incorporation should include the following basic information:

location of the registered office

number and classes of shares authorized to issue 

any restrictions on share transfers

number of directors to be appointed

any restrictions on the types of activities or business the corporation may conduct

The Articles of Incorporation and supporting documents must be signed in
duplicate by at least one incorporator who is competent, at least 18 years of
age and not bankrupt. Incorporators may, but do not have to be directors or
shareholders of the company after it is incorporated. 

The Articles of Incorporation and supporting documents, including a NUANS
report and filing fee must be filed with the appropriate government agency
before the corporation is created.

For federal corporations, the Corporations Directorate requires the following
documents to be filed:

2 copies of Articles of Incorporation (Form 1) 

Notice of Registered Office (Form 3) 

Notice of Directors (Form 6) 

Federally-biased NUANS report 

Filing fee (currently $500 payable to Receiver General for Canada) 

For Ontario corporations, the Companies Branch of the Ministry of Consumer and Commercial Relations requires the following documents to be filed:

2 copies of Articles of Incorporation (Form 1) 

NUANS report 

Consent of the Director (if a director named in the Articles of
Incorporation is not an incorporator) (Form 2) 

Filing Fee (Currently $330 payable to Minister of Finance) 

For more information on incorporating a Federal or Ontario Corporation offered by  Oliver Xing, Chartered Accountant, please refer to Federal Incorporation or Ontario Incorporation.

Step 5.   Purchase Minute Book & Corporate Seal 

All corporations are required by law to keep certain corporate records including, but not limited to:

a copy of the Articles of Incorporation 

all corporate by-laws 

minutes of shareholder meetings 

shareholder resolutions 

minutes of directors' meetings 

resolutions of directors 

directors register 

securities register 

share transfer register 

a copy of any forms filed with the government 

a copy of any unanimous shareholder agreement 

All these documents are usually kept in a binder or case known as a corporate minute book. It is advisable to have a professional minute book prepared and updated each year to reflect the ongoing business of the corporation.

A corporate seal is used to emboss the corporation's name on legal
documents to verify their validity.

For more information on Minute Book or Corporate Seal offered by Oliver Xing, Chartered Accountant, please refer to Minute Book or Corporate Seal.

Step 6.   Obtain Other Permits & Licenses 

After you have set up your corporation, you must turn your attention to other
taxation and legal requirements to operate your business, which includes, but not limited to the following:

1.   Register for a Business Number
The Business Number is a single number for businesses to deal with the federal government.  It encompasses one or more of the following accounts:

Corporate Income Tax (RC)


Payroll Deductions (RP)

Import/Export (RM)

2.   Register for a provincial sales tax (PST) account (if applicable) 
The PST is a tax based on the retail price of most goods, and is also known as the Retail Sales Tax.  Businesses that sell taxable goods or provide a taxable service are responsible for collecting and remitting the tax. Businesses required to collect the PST must obtain a Vendors Permit through the Ontario Ministry of Finance. 

3.  Register for provincial Employer Health Tax & Worker's Compensation
The Ontario Ministry of Health administers a comprehensive government plan of health insurance for Ontario residents.  Unless exempted, all employers with a permanent establishment in Ontario must register for the EHT. Employers with a payroll of less than $400,000 are exempt from the EHT.   Employers operating a business in Ontario, and have payrolls in excess of $400,000, are required to pay the EHT either monthly or quarterly based on total calendar year gross payroll.

Most industries in Ontario are covered by the Workplace Safety & Insurance Act. Employers must pay into the insurance fund of the Workplace Safety & Insurance Board (WSIB) through assessments on their payrolls.  Employers are required to contact the board within 10 days of hiring their first worker.

4.  Obtain any federal, provincial and/or municipal licenses 
Many types of businesses require licensing from the federal, provincial and/or municipal government.  These requirements could include an operating permit, special permissions to operate in your chosen location or specific qualifications for you and/or your employees. 

Choosing the right advisor is one of the most important decisions any business will ever make.  We believe we can help you make the right decisions.
  Contact Oliver Xing, Chartered Accountant to inquire about our services for your tax and accounting considerations of starting a new business, or click here for description of the tax & accounting services provided by Oliver Xing Chartered Accountant.

Step 7.  Set Up Bank Account 

In order to set up a corporate bank account, you will need to supply the bank
with a copy of your Articles of Incorporation and any articles of amendment. All authorized signing officers of the corporation must sign on the account at the bank before they are permitted to sign cheques or access the corporate
account.  You should keep all the bank statements and returned cheques for your business.

Step 8.  Start Your Business! 

Now that all of the many taxation and legal requirements are satisfied, you can concentrate on operating and growing your new business!

While this list is intended to describe the basic steps required to create a
corporation, you should be aware that it is not exhaustive, and that certain steps may be performed simultaneously. It is always advisable to consult a
professional for any legal, accounting, tax or other professional advice.