Incorporation Services

Incorporating your business in Canada

A corporation is a separate entity with its own legal personality. Corporation law (at times referred to as company law), is the law enforcement body that governs the formation, governance, and dissolution of corporations. The corporation is the one of the most dominant form of business organization in Canada.

In simpler words, incorporation is the legal process whereby a newly formed business entity is legally created in order to protect the owners of a business from legal liability.

Features of a corporation:

  • Once a business is incorporated, it has separate legal personality in the sense that it is a legal person separate and distinct from its shareholders, directors and officers
  • Further, a corporation has perpetual existence in that it continues to exist until it is liquidated or dissolved. The death of a shareholder, even if he or she is the only shareholder, does not affect the existence of the corporation. Corporations therefore are a relatively stable form of business organization
  • Shareholders who invest in a corporation enjoy limited liability in that they are not liable for the debts or other obligations incurred by the corporation
  • The structure of a corporation consists of shareholders, directors and officers

Incorporation in Canada and its link to taxes:

Once a business is incorporated, the company is most likely subject to lower corporate income tax rates. Generally, the tax rates for corporations are more favorable as compared with the individual tax rate.

Interestingly, once a business is incorporated, it opens many avenues for saving taxes. For instance, the option of income splitting between family members in corporations helps lower the tax burden resulting in tax savings, amongst other options.

Choosing between Federal v. Provincial Incorporation

As a business owner, you have a choice where you can incorporate your business at the federal level with Corporations Canada or incorporate in a specific province or territory. Each one has set of advantages and disadvantages.

For instance, a federally incorporated business has benefits including, the business has a right to carry on business activities anywhere in Canada, wider recognition, heightened name protection and can operate online without the need of an intermediary.

On the other hand, depending on the circumstances a business owner might choose to incorporate his/her business provincially to exercise advantages such as: lower cost of incorporation, province specific deductions, ease of business selection.

It is the best to discuss these aspects with an expert to understand the best route for your business. At Toronto Tax Boutique, based on your circumstances and your objective, our business and tax experts suggest you the best choice for your business.

What are Professional Corporations?

A professional corporation is like a regular corporation; however, a professional corporation is restricted to provide only some professional services. This is regulated by a governing body such as the Law Society of Upper Canada for Lawyers. As per the rules, some of the professions allowed to form corporations are as follows:
  • Accountants
  • Chiropractors
  • Dentists
  • Doctors
  • Lawyers
  • Pharmacists among others

Why hire an expert for incorporation?

Although there are a lot of benefits associated to forming a corporation, it can get really complicated to setup and might pose some serious consequences in the long-term for the business. The incorporation is critical because it acts like a foundation of your business and a stronger foundation helps the business to scale easily and hence, generate more profits. Thus, we strongly recommend for business owners to seek professional advice when doing so.

Why us?

Experts at Toronto Tax Boutique are experienced in incorporation laws and taxes. For the past years, we have been handling a number of clients across various industries and have simplified the incorporation process for them. We can help you take the next step into growing within your profession.

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To get your business incorporated with our experts, contact us today to get started.

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