Incorporating your Ontario business is one of the most consequential decisions you can make as an entrepreneur. Done correctly, the process creates a solid legal and tax foundation for your business. Done carelessly — using an online service without professional review — the articles of incorporation and share structure may not serve your needs and can be expensive to fix later. This guide walks through the entire process.
Step 1: Decide Between Ontario and Federal Incorporation
Your first decision is whether to incorporate under the Ontario Business Corporations Act (OBCA) or the Canada Business Corporations Act (CBCA). Most Ontario businesses that operate only in Ontario should incorporate provincially.
- Ontario (OBCA): simpler if you only operate in Ontario, lower ongoing filing requirements
- Federal (CBCA): required if you need name protection across Canada, or plan to operate in multiple provinces
- Federal corporations must also register extra-provincially in each province they operate in
- Cost difference: OBCA ~$360 online; CBCA ~$200 online (but extra-provincial registration adds cost)
For most Ontario service businesses, provincial incorporation is the right choice. Federal incorporation makes sense for businesses with national ambitions, specific name protection needs, or non-resident owners.
Step 2: Conduct a NUANS Name Search (If Using a Named Corporation)
If you want your corporation to have a specific name (e.g., "Smith Consulting Inc."), you must conduct a NUANS (Newly Upgraded Automated Name Search) to confirm the name is available and not confusingly similar to existing corporations or trademarks.
- NUANS report cost: approximately $13.80 through third-party providers
- Valid for 90 days — you must file your articles within that window
- Name must include a legal element: "Inc.", "Ltd.", "Corp.", or "Limited"
- Alternative: use a numbered corporation (e.g., 1234567 Ontario Inc.) — no NUANS needed
Numbered corporations are just as legally valid as named ones. Many small business owners operate with a numbered corporation and simply register a separate business name (trade name) for marketing purposes.
Step 3: File Articles of Incorporation
The Articles of Incorporation is the founding document that creates your corporation. It is filed with the Ontario Ministry of Public and Business Service Delivery (formerly MGCS). For Ontario, you can file online through the Ontario Business Registry.
- Filing fee: $300 online through Ontario Business Registry
- Key items in articles: corporate name, registered office address, directors, share structure
- Share structure: the most important and most commonly mishandled element
- Processing time: typically same-day to 1 business day online
Share structure warning: A simple "1 class, unlimited common shares" structure is fine for a single owner with no plans for income splitting, share sales, or investors. But if you want to pay dividends to a spouse, bring on a partner, or plan for a future sale, you need a more sophisticated share structure from the start. Fixing it later is expensive.
Step 4: Initial Organization — Minutes, By-Laws, and Share Issuance
Filing the articles creates the shell of a corporation, but it is not yet operational. The "initial organization" sets up the corporation's internal governance and issues shares to the founders.
This is typically handled by a lawyer or CPA and involves preparing a set of organizational documents including the by-laws, first directors' resolution, banking resolution, and share subscription agreements.
- Adopt by-laws (rules governing how the corporation operates)
- Appoint officers (President, Secretary, Treasurer)
- Issue shares to founder(s) — allot and subscribe
- Set up corporate bank account
- Organize the minute book
Share pricing matters: Shares should typically be issued at a nominal price (e.g., $1 for 100 shares) at incorporation. The value of the corporation comes from retained earnings over time. Issuing shares at a high price at inception can create unexpected tax consequences when adding shareholders later.
Step 5: Register with the CRA
After incorporation, your corporation must register with the Canada Revenue Agency to obtain its Business Number and applicable program accounts. This is done through the CRA Business Registration Online portal.
- Business Number (BN): automatically assigned upon registration
- Corporate tax account (T2): register immediately
- HST/GST account: register if you expect revenues over $30,000 in four consecutive quarters
- Payroll account: register before your first payroll
- Import/export account: if applicable
Key Takeaways
Incorporation done right is a half-day administrative process that creates a solid legal and tax foundation for your business. The critical decisions — share structure, jurisdiction, and initial organization — are worth getting professional advice on. The cost of a CPA or lawyer reviewing your incorporation structure is small compared to the cost of correcting mistakes later.
Incorporate the Right Way from the Start
Adapt Business Solutions provides professional incorporation services for Ontario businesses — including share structure planning, minute book setup, and CRA registration. Get a fixed-fee quote.
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