Incorporation options in Canada – What is right for you?Jay Legue
“There are many options for incorporation in Canada, what is the right one for you?“
Incorporating in Canada
As a new business owner with a limited budget, I used Google as my friendly neighborhood information source to get a grasp of how to navigate the waters of incorporation most easily and cost-effectively possible. There are many incorporation options available in Canada: Federal or Provincial, Named or Numbered, Paper or Online, Self-managed, or using a lawyer. I will use a series of posts to discuss some of the options available and show how I incorporated my business. I will discuss why I chose the way I did when starting this journey.
Incorporating in Ontario
Searching led me first to the Ontario government incorporation site:
While very full of useful information, this site does not provide a way to incorporate online directly in Ontario. Instead, the Ontario web site refers you to the following incorporation options:
- Use a sanctioned online registration provider
- Complete a paper application and submit it by mail or in-person
- Use a lawyer
Sanctioned Online Registration Provider
Use one of three (3) Service Providers registered and authorized by the Ontario government for online filing is an option. It makes things simple as they have many template packages and other add-ons that can get your business started fast. In Ontario, incorporation costs $300 and fees charged by the Service Providers for their service start at $300, and go up from there. Depending on the additional services they provide and that you choose to use this can become a much larger bill. This is not the least expensive way to go and would cost $610 or more after completing the required Nuans search for a named corporation registration.
While it is possible to complete the paperwork and submit it in person at offices in Toronto or select ServiceOntario locations. Manual paperwork and waiting in line seemed to me to be a good way to lose at least half a day. If by chance, you have forgotten something needed, multiple trips to the office would be in my future; not my idea of a good time. Choosing this path, you will only pay the $300 registration fee but you need to have completed a Nuans search in advance when registering a named corporation. This was not the way for me.
There is also the possibility to mail in a completed application with Nuans report, more on Nauns later, information for a named corporation. Turnaround by mail is typically 2 weeks or more which, if you are impatient like I am, is not really an option. It will only cost you the $300 registration fee and the $22 for the Nuans search which can be ordered online through one of the 3 Service Providers.
Use a Lawyer
You also have the option of working with a lawyer to incorporate; that option, however, will cost you $1500 or more. It is easier to have someone else do it for you, but you pay for that service!
Corporate registration in Ontario costs a minimum of $322 and could cost much more with additional services from the provincially selected service providers added. I wanted something better.
Canadian Federal Incorporation
I continued my search and found the Canadian Federal Incorporation web site, Corporations Canada:
I was happy to find it possible to incorporate online using a government service that also completes provincial registration for Ontario as a single process. It is possible to register in Nova Scotia, Saskatchewan, and/or Newfoundland and Labrador as part of the online process. I did not need these additional jurisdictions but you might. The additional jurisdictions available are a bonus if you are looking to conduct business in any of them. As Ontario is where I am doing business in Canada, this was looking like a no-brainer.
Fees for incorporating federally are $200, which as I am cost-conscious at the moment, is a nice saving from the Ontario fee. Completing a Federal Nuans search I found was both easier and less expensive at $13.80. Total costs for self-serve Federal incorporation came to $213.80. That is a savings of $108.20. I used that cash to pay for my domain name and web hosting.
Having read the information on the Corporations Canada site I was ready to start the process of Federal Incorporation. Now I had to make my first decision, Named Corporation or Numbered Company?
There is no legal difference between named and numbered corporations. Your reason for incorporating should help you make your decision. If you are just incorporating for accounting purposes a numbered corporation is for you. Are you going to operate under the corporate name? then a named corporation is the way to go. I chose to create a Named Corporation as I wanted to operate under the name I chose. If you plan on operating under a name other than your corporate name it must be registered separately in Ontario. Registering a name for a numbered corporation in Ontario is an extra cost; $60 for 5 years. I planned on using the corporation name when doing business and thus chose to do a named registration.
Looking for a Name
Google and LinkedIn searches before starting to use the Nuans Search interface help identify if a name is already taken; it is never fun to start the registration process and find your idea is taken. A domain name search never hurts; it is never too early to start thinking about marketing!
Here are a couple of additional sites that can help you find out if your intended company name is taken:
When registering a named corporation you MUST complete what is called a Nuans Search. A Nuans Search ensures your intended name, or one similar to it, is not in use already.
Nuans searches are completed online in just a few minutes. Submit and pay for your search and you’ll receive your Federal Name Reservation Report and Reservation Number by email in minutes. You need the report number when completing your online incorporation. Nuans Search results are only valid for 90 days. Get to work right away on your application or risk doing another Nuans search. Receipt of the Nuans report does not mean that your proposed company name is approved. It just shows you if another company is using your specific name or one similar to it. You will know for sure if the name you have selected is approved for use after processing your incorporation application is complete. This typically takes up to 2 weeks.
To complete a federal Nuans search go here:
For a walk-through of the process to get a Federal Nuans report look at my post – Nuans Search – What’s in a name?
If you are ready to complete your Federal Incorporation look for my upcoming post – Incorporating Federally in Canada.
Looking back to when I completed the incorporation of DAMGeeks, I can’t say that I would change things. While I did have to do the work myself, none of the forms and processes were overly complex. To me, saving and understanding more by doing it myself because of a limited budget outweighed the challenges of the process. So when it comes to evaluating these options for incorporation in Canada 18 months later, I still think I chose right for me. I hope this helps you on your journey!
About the author:
Jay Legue is a DAM enthusiast, consultant, and educator. He has more than 20 years of experience with Digital Asset Management and MarTech technologies. Jay is an approachable and innovative leader who has sustained success in delivering value for clients in their challenging environments. Jay’s extensive experience in process analysis and optimization catalyzes beneficial change implementing, evolving, and maintaining DAM solutions.