Congratulations! You’ve formed an Ontario Corporation. If you’re like other business owners we’ve talked to, you might be wondering, “Now what?” We understand—there’s a lot to think about. Below is a list of ten things you should think about after forming an *Ontario Corporation.
*Although this article focuses on Ontario corporations, a lot of the information can be carried over to corporations from other provinces as well—but some laws/requirements may vary. None of this information is intended to replace the advice of a professional, and this article is intended for informational purposes only.
Ensure your Corporation has been Formally Organized and Remains Compliant Going Forward
After incorporation, every company is required to take steps to formally organize itself. This includes passing By-Laws, appointing directors, etc. You can read more about what is required in our “All About Corporate Minute Books” article.
Going forward, the corporation will be required to file an Annual Return with the Ontario Business Registry, as well as notify them throughout the year if certain changes are made (such as a change to the company’s registered head office address). You can read more about Annual Maintenance here. Understanding what your corporate responsibilities are can feel overwhelming. If this is something you need help with, contact us here.
Open a Company Bank Account
Once a company is formed, you will likely want to start the process of opening a bank account for that company. You will need your company’s CRA Business Number to do so. In Ontario, this number gets mailed by the CRA to the corporation’s registered office address (typically within 1–4 weeks of the incorporation date).
The bank will also want to see other corporate documents, so it’s important to find out what they need and be prepared. Bringing along the following documents to your meeting with the bank is often enough (but every bank is different):
- Certificate and Articles of Incorporation
- CRA Business Number
- Securities Register
- Directors Register
- ID to show that you are authorized to open the bank account.
Ensure the Shareholders have Transferred Money to the Corporation for their Shares
Shares are not validly issued until payment has been received in full by the Corporation. It is important that the appropriate funds are deposited in the Corporation’s bank account to formalize the transaction. Even if you are the sole shareholder, and it is your corporation, you still need to formalize the transaction and deposit the appropriate amount into the Corporation’s new bank account.
For Example: John Doe is the sole shareholder of his new corporation, Doe Brewing Inc. He purchased 10,000 Common shares for $0.01 per share. John Doe needs to pay the corporation $100.00 in order to formalize this transaction.
Hire an Accountant – Set a Fiscal Year End – Register for Tax Accounts with the CRA
Hiring an accountant is not required, but they offer invaluable support to corporations and ensure that you remain compliant with the CRA. When you first incorporate, they can assist with setting a fiscal year-end and registering for the appropriate tax accounts that your business may need (such as goods and service tax (GST/HST/PST), payroll tax, import/export tax, employer health tax, etc.). Accountants should be able to guide you in this process and help your corporation start off on the right foot.
Obtain Insurance for the Company
There are different types of insurance coverage that you will want to consider putting in place.
One common type of insurance is Director and Officer Liability Insurance (AKA D&O coverage). A Director and/or Officer of a corporation can incur some personal liabilities by virtue of holding that office; therefore, it may be a good idea to consider purchasing director and officer liability insurance to cover some of the associated risks, in addition to implementing best practices to avoid incurring such liability.
Other common types of insurance include commercial general liability coverage, property coverage, and cyber protection coverage.
If Shareholders are Loaning Money to the Corporation
If any shareholder(s) provide loans to fund the Corporation’s initial operations, then it is good practice to document such loans properly. This is often done in the form of a Loan Agreement or Promissory Note.
Consider a Shareholders’ Agreement
If there are multiple shareholders, entering into a Unanimous Shareholder Agreement between the Corporation and each shareholder may be something to consider. The Unanimous Shareholder Agreement can be used to address potential issues in the life of the corporation—such as what happens with a non-performing shareholder and what happens when a shareholder wants to exit the corporation—that are not addressed or not adequately addressed in other documents governing the Corporation.
Understand the Rules Around Your Corporation’s Name
Your new corporation name is now protected across Ontario as a corporation name. It has no protections in any other province or country, and it has no registered trademark protections, either. You will need to take additional steps if you wish to secure broader protection of your Corporation’s name (such as trademarking).
Your corporation may not carry on business or identify itself to the public by a name other than its corporate name unless such business name is first registered with the government ministry in the appropriate province (so long as it’s available).
For Example: If your corporation name is “Frankie’s Floral Services Inc.” but you want to promote your business as “Frankie’s Florals”, then you will first need to register “Frankie’s Florals” as a registered business name for the Corporation. You’ll then be able to use that name for all promoting and marketing purposes, etc., but you will still need to include your full corporation name on things like invoices, contracts, and any other legal documents.
Business Licence(s)
Consider whether your new Company needs to obtain any business licenses. You can learn more about required permits and licenses at the BizPal site.
Other helpful resources include:
Register with the WSIB
You may be required to register with the WSIB (Workplace Safety and Insurance Board). This is typically required if you plan to have employees and/or work in construction. Visit the WSIB Ontario site for more information.
We hope this article gave you some helpful information on some items you’ll want to consider shortly after incorporating an Ontario corporation. If you have questions or need help with incorporation, contact us here.
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