The Seven Key Steps Towards Incorporation

Step 1 – Decide on whether to incorporate Federally or Provincially

Will your operations take place only in Ontario, across the country or internationally?

Step 2 – Decide on your company’s name

Every company needs a name. If you want a unique name, we will conduct a name search to ensure that someone else hasn’t registered your proposed name. If you don’t want a unique name, your company can be registered and known as a numbered company (e.g. 100001 Canada Ltd. or Ontario 101202 Ltd.).

Your name must include one of the following: Limited, Ltd., Incorporation, Inc., Corporation or Corp.

You may also consider registering a trademark for your company name at this point.

Step 3 – Decide on who your directors will be

We will need the name, address and citizenship of each of your anticipated directors. For both Federal and Ontario corporations at least 25% of directors must be resident Canadians, but if you have less than four directors one of them has to be a resident Canadian.

Step 4 – Meet with your accountant

At this point we strongly suggest meeting with an accountant to discuss the following issues:

1)      Shareholdings – You should discuss the tax and practical implications of who the shareholders will be, what types of shares will be issued (common, preferred, voting, non-voting, convertible etc.), how many shares will be issued and what price the shares will be issued for.

2)      Year-end Date – What date makes sense in the life cycle of your business and the availability of your accountant?

3)      Financial Distributions – How are the various stakeholders in the proposed business (you, your business partner, your significant other) going to be compensated by the business (salaries? Dividends? Options?)

We are happy to introduce you to an accountant with experience relevant to your business.

Step 5 – Confirm the following with us

Now that you have met with your accountant, we should be able to easily identify the following stakeholders in your company:

1)      The Shareholders – Their names, addresses and the number and type of shares they are to be issued (at this stage you will also want to consider whether a Unanimous Shareholder Agreement is required

2)      The Officers – Who the President and Secretary will be, and any other anticipated or required officers

We also request the following information:

1)      Signing Authority – Who will have the authority to execute documents on behalf of the corporation? Will there be situations when multiple signatories are required (usually when transactions exceed a certain financial threshold)?

2)      Registered Head Office Address – A residential address is fine

3)      Accountant / Auditor – Name and address of the company’s accountant/auditor

And advise that you consider:

1)      Pre-incorporation Intellectual Property – Prepare an inventory of all the IP owned by the corporation’s stakeholders. These assets need to be properly assigned to the corporation.

Step 6 – Incorporating and organizing the company

At this step we are now ready to incorporate your company. We will conduct the appropriate name searches, register the company with the appropriate governing authority, and prepare a comprehensive minute book that contains all the required corporate documents (by-laws, resolutions, certificates, registers).

Once the minute book is ready, we will schedule a meeting with you where we can walk you through our minute book, and have you execute all of the required documents.

Step 7 – Start your business

Now that your corporation has been organized correctly you can feel free to move forward with common considerations including:

1)      Registering for a Canada Business Number

2)      Registering for a GST/HST Number

3)      Setting up a bank account

We are always happy to discuss any of the steps enumerated above, and answer any questions you may have about the incorporation process.