Entrepreneurship & Small Business

DIY Provincial (ON) or Federal Business Incorporation 1-2-3 & Save your money

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  • Aug 15th, 2018 10:05 pm
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Newbie
Apr 24, 2015
5 posts
Toronto, ON
Poppwl wrote:
Mar 13th, 2018 11:12 pm
I don't even know why all these people want to incorporate. If you are not making a profit, it's additional cost for no reason. There is no tax benefits.

You can also reserve a bunch of useless names with NUANS that no one will want to buy from you.
Limited liability, and ofcourse there are tax benefits. But incorporation is obviously not for everyone.
Deal Addict
User avatar
Jul 10, 2006
2756 posts
83 upvotes
Poppwl wrote:
Mar 13th, 2018 11:12 pm
I don't even know why all these people want to incorporate. If you are not making a profit, it's additional cost for no reason. There is no tax benefits.

You can also reserve a bunch of useless names with NUANS that no one will want to buy from you.
I need it for my commercial properties and the liabilities associated with them.
"Truth is High, Higher Still is Truthful Living" Guru Nanak
[OP]
Deal Guru
Aug 2, 2010
12537 posts
3071 upvotes
Here 'n There
ashs wrote:
Jul 9th, 2018 1:25 pm
I need it for my commercial properties and the liabilities associated with them.
I have owned a number of commercial properties and never held them in a corporation it's just a lot more paperwork, hassle and cost. Liability insurance covers liabilities. What is it about your liabilities that are so special that your only option is to incorporate? Also, if you are going to do that you better hold each property in a separate corporation because otherwise the assets are pooled and exposed as a whole. That increases the cost, hassle and admin dramatically.
Deal Addict
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Aug 15, 2015
1105 posts
147 upvotes
Markham, ON
ashs wrote:
Jul 9th, 2018 1:25 pm
I need it for my commercial properties and the liabilities associated with them.
I guess it makes selling your "commercial" properties easier. People are buying your property and not the service you provide.
Deal Addict
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Jul 10, 2006
2756 posts
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eonibm wrote:
Jul 9th, 2018 3:53 pm
I have owned a number of commercial properties and never held them in a corporation it's just a lot more paperwork, hassle and cost. Liability insurance covers liabilities. What is it about your liabilities that are so special that your only option is to incorporate? Also, if you are going to do that you better hold each property in a separate corporation because otherwise the assets are pooled and exposed as a whole. That increases the cost, hassle and admin dramatically.
Fair enough but a big suit could take our house and I didn't want that. Not to mention the great tax rate of 15% for the first 500k. Having additional revenue on my personal. Tax was bumping us up too high.
"Truth is High, Higher Still is Truthful Living" Guru Nanak
[OP]
Deal Guru
Aug 2, 2010
12537 posts
3071 upvotes
Here 'n There
Poppwl wrote:
Jul 9th, 2018 7:00 pm
I guess it makes selling your "commercial" properties easier. People are buying your property and not the service you provide.
Huh? It doesn't make it easier at all. Even if you own it outside a corp you can still sell the property just as easily.
[OP]
Deal Guru
Aug 2, 2010
12537 posts
3071 upvotes
Here 'n There
ashs wrote:
Jul 9th, 2018 10:20 pm
Fair enough but a big suit could take our house and I didn't want that. Not to mention the great tax rate of 15% for the first 500k. Having additional revenue on my personal. Tax was bumping us up too high.
Yeah but you were talking about commercial properties, not your house. Also, if your house, ie principal residence, is in a corp then you lose the tax free capital gain on selling it. Also, because of the concept of integration the taxes are the same whether you receive the rental income inside or outside the corp. You would have to keep it inside the corp for 10-15 years or so and achieve a positive return on that income after tax to enjoy any tax savings. Few people every do that, not to mention the extra cost of admin, accounting and tax returns really chips away at any savings achieved.

Methinks you are a bit too paranoid in this respect.
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Jul 10, 2006
2756 posts
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eonibm wrote:
Jul 10th, 2018 7:43 pm
Yeah but you were talking about commercial properties, not your house. Also, if your house, ie principal residence, is in a corp then you lose the tax free capital gain on selling it. Also, because of the concept of integration the taxes are the same whether you receive the rental income inside or outside the corp. You would have to keep it inside the corp for 10-15 years or so and achieve a positive return on that income after tax to enjoy any tax savings. Few people every do that, not to mention the extra cost of admin, accounting and tax returns really chips away at any savings achieved.

Methinks you are a bit too paranoid in this respect.
Well right now one residential 4plex brings me an additional 20k profit yearly to my personal income which pushes me and the wife's income higher. We recently purchased a commercial/residential triplex under our new corporation. This will also bring in profits but now will be taxed at the corporate rate which is what we wanted, our future purchases will now be used by the funds saved with the corporation not for dividends, we have our regular day jobs and salaries. I am new at this and learning as I'm going.
"Truth is High, Higher Still is Truthful Living" Guru Nanak
Deal Addict
User avatar
Jun 24, 2015
1533 posts
236 upvotes
Woodbridge, ON
Poppwl wrote:
Mar 13th, 2018 11:12 pm
I don't even know why all these people want to incorporate. If you are not making a profit, it's additional cost for no reason. There is no tax benefits.

You can also reserve a bunch of useless names with NUANS that no one will want to buy from you.
If you noticed a lot of companies hiring do not want to hire direct employees, the most commonly asked question is "are you incorporated" or "will you be able to incorporate" they want to save on fees and taxes and payroll so they want you to incorporate and hire you as a contractor/vendor so they simply pay your corporation instead of hiring you on the payroll,

Now, for someone who incorporates merely to get a job at a company, has no sales, no inventory, no advertising, no equiptment ,no office, nothing, what is required for tax filing at the end of the year?
Hi
Deal Addict
Mar 16, 2015
1361 posts
187 upvotes
Winnipeg
GoodFellaz wrote:
Jul 27th, 2018 2:35 pm
If you noticed a lot of companies hiring do not want to hire direct employees, the most commonly asked question is "are you incorporated" or "will you be able to incorporate" they want to save on fees and taxes and payroll so they want you to incorporate and hire you as a contractor/vendor so they simply pay your corporation instead of hiring you on the payroll,

Now, for someone who incorporates merely to get a job at a company, has no sales, no inventory, no advertising, no equiptment ,no office, nothing, what is required for tax filing at the end of the year?
He will definitely have sales for minimum...may be no inventory or advertising but sales yes. He will create invoices and bill to the company on B2B basis and collect gst/hst on sales. There will be 2 returns he will need to file at the end of year...one is corporate income tax return another gst/hst return. He also has to file T4 information return. These 3 things he will file to cra. If he is federally incorporated , he also need to file an information return to corporation s canada. Some provinces like Manitoba asks to file a return to them too..Ontario does not...
Newbie
Oct 28, 2016
51 posts
118 upvotes
Guys need your help. I was going through OP post and the lin k he provided under the Federal registration got me confused. When you follow the link https://www.ic.gc.ca/app/scr/cc/Corpora ... rp-wz.html for registration, the second last tab says extra provincial registration. For Ontario there is no extra fee. So you only pay $200 and Ontario registration is included.
Is it better way to incorporate or go for Ontario only incorporation? Inputs will be highly appreciated.
Deal Addict
Mar 16, 2015
1361 posts
187 upvotes
Winnipeg
Hyper9 wrote:
Jul 29th, 2018 10:16 pm
Guys need your help. I was going through OP post and the lin k he provided under the Federal registration got me confused. When you follow the link https://www.ic.gc.ca/app/scr/cc/Corpora ... rp-wz.html for registration, the second last tab says extra provincial registration. For Ontario there is no extra fee. So you only pay $200 and Ontario registration is included.
Is it better way to incorporate or go for Ontario only incorporation? Inputs will be highly appreciated.
Up to you.
I had incorporated federally but it gives no extra privilage other than name protection( screw that if you are numbered corp).
When you do business in any province ,they treat any federal corpieation and corporation from amy other prob nce same. Even if you are federal, they want you to register in each province . So why incorpirate federal than....

But I'm n case you incorporate federally , just click the check box that you want to register in Ontario. Then you don't need to register in Ontario separately.
Newbie
May 26, 2018
5 posts
GTA
eonibm wrote:
Jul 10th, 2015 10:02 pm
I've done this a number of times, most recently for a new Ontario company I just incorporated. I thought I'd share how easy peasy it is. You don't need lawyers or online filing services etc. Save your money. You can do either Provincial or Federal Incorporation. You should google 'provincial vs federal incorporation' to decide which is best for you.

Provincial Incorporation - Ontario:

1. Ordered an Ontario Nuans name search report at http://www.corporationcentre.ca/docen/pns/home.asp for $25+HST. Was delivered to my email within 1/2 hr. Printed 2 copies. Note that if you just want a numbered company you do not need this report and you will just be assigned the next number they are handing out. Many use this (as I have) for holding companies that just hold investment assets rather than are active companies operating businesses doing trade.

2. Printed and filled out 2 copies of the Ontario Incorporation Form 1 from http://www.forms.ssb.gov.on.ca/mbs/ssb/ ... 07116E.pdf. Entered myself as sole director & incorporator, 'no restrictions' on share xfer, 'unlimited common shares' and 'none' for all the other questions.

3. Cycled down to the 375 University Ave. 2nd Floor and submitted my duplicate forms & NUANS and $360 by credit card. They hand you one stamped copy back along with an 'Initial Return by an Ontario Corporation, Form 1' which is a simple form that you need to fill out with basically the same info you just submitted and mail or drop off within 60 days to 393 (not 375!) University Ave, Suite 200. I'll cycle down to drop it off and save the stamp in true RFD spirit and get some exercise while I'm at it.

Total Cost = $360 (Gov't filing fee) + $28.25 (NUANS name search) + $1.13 (binder) = $389.38 and transportation was free. No Annual reporting requirement fee.

If you want to get fancy (but you don't need to) on the share structure, restrictions on xfer, etc then just google or change it later by resolution.

Seals are no longer legally required so I don't order them, nor is an 'official' fancy looking minute book. I just use a $1 dollar store binder and ordinary paper. Nor do you need a lawyer or paralegal to do the minute book. Samples of minutes can be found online which you can modify to suit your company. Next you just issue the shares to whomever and fund the company either via loan or share purchase or just use your own money or credit card and get reimbursed via petty cash report to the company. Then go open a business bank account and google to see who's the cheapest and meets your needs. Save money and don't get a company credit card but just use your personal one and let the company reimburse you (too much business use might result in the CC company requiring you to use a business CC, but unless you are buying huge amounts of inventory on it or other huge obviously business related charges you will have no problem).

The whole process took 90 minutes (including going to Dollarama!).

Federal Incorporation - Canada:

Many aspects are similar to Ontario incorporation. However, this can all be done online.

1. Go to https://www.ic.gc.ca/app/scr/cc/Corpora ... rp-wz.html and just answer the questions.

2. Note that you only need a NUANS report if you want a named company instead of a numbered company. If you just want a numbered company you do not need this report and you will just be assigned the next number they are handing out. Many use this (as I have) for holding companies that just hold investment assets rather than are active companies operating businesses doing trade. Note that if you order a NUANS report for Ontario or Federal they must be used for that incorporation. You cannot use an Ontario NUANS report for Federal incorporation and vice-versa.

3. Enter your payment method and then wait for your incorporation documents to arrive via email.

Total Cost = $200 (Gov't filing fee) + $28.25 (NUANS name search) + $1.13 (binder) = $228.38 $20 Annual fee for Annual reporting requirement if done online.

Note: There is no requirement to report shares issued/transferred/bought/sold or shareholder information to either authority as erronously reported around the InterWebs. In fact there is no requirement even to decide any of that at the time of incorporation but you better do it shortly after incorporation if you have multiple shareholders as everyone wants to know what they are getting. If it's just you there is no rush but you have to have it done by the time you prepare your first financial statement and certainly before you file your first corporation tax return. You need not contribute anything to the company and the share can just have a nominal value of $0.01. Personally I just loan $ to my co and have it paid back. You can do that with multiple shareholders too.
Hi,

Thanks a lot for this writeup as i firmly believe in DIY. I also incorporated my ON numbered corp few days ago.
Can i request you to please extend this writeup in your simple way to provide some details about below:

1) CRA formalities regarding BN and other registration / Any deadline or schedule dates to complete it etc

2) Initial formalities like meetings or returns ( form nos etc) to be filed with due dates from incorporation date

3) Regular Quarterly or scheduled returns under Biz Act and CRA

4) Business Name importance and registration etc

5) Any free/open source ERP or software to maintain business recordings.

Anything else you or anybody else can share with the experience.

Thanks.
Newbie
Apr 13, 2010
41 posts
19 upvotes
Mississauga
eonibm wrote:
Jul 10th, 2018 7:43 pm
Yeah but you were talking about commercial properties, not your house. Also, if your house, ie principal residence, is in a corp then you lose the tax free capital gain on selling it. Also, because of the concept of integration the taxes are the same whether you receive the rental income inside or outside the corp. You would have to keep it inside the corp for 10-15 years or so and achieve a positive return on that income after tax to enjoy any tax savings. Few people every do that, not to mention the extra cost of admin, accounting and tax returns really chips away at any savings achieved.

Methinks you are a bit too paranoid in this respect.
@eonibm could you elaborate on what you mean by this concept of integration? I pretty much have the same plans @ashs to set up a corporation for my short term rental business. As far as I understand, rental income without a corporation would count as an addition to your personal income, whereas rental income with a corporation would just be taxed at 15% corporate rate.

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