The procedure of registering a corporation in Ontariogenerally follows the same requirements that are applicable at a national level. However, investors have to be aware that certain registration procedures may be specific only to Ontario, as certain regulations can apply solely at a regional level.
For instance, the latest modifications of the Company Law have eliminated the residency requirements for the directors of companies in Ontario, but in all other Canadian provinces, this regulation does not apply. Given that there can appear small differences that can have an important impact on the investors, we invite to address your inquiries to our team of consultants in company registration in Canada.
What is the process of registering a corporation in Ontario?
In order to open a company in Ontario, Canada, that will operate as a corporation, investors will need to complete numerous steps. They will have to prepare specific documents that have to be submitted with the local institutions. The filing of the documents can be done through three main methods.
First, the company’s statutory documents and other required papers can be submitted via the online portal of the services providers accredited by the Ministry of Government and Consumer Services. Another option is to file the document in person, at the Service Ontario office (the one that is in the proximity where the company will have its registered address). Investors also have the possibility of submitting the documents by mail.
Our team of consultants in company registration in Canadawill present in the following list some of the basic aspects that have to be completed when opening a corporation in Ontario; all of the following are compulsory requirements, but the incorporation procedure is not limited to the aspects presented below, as they represent only a part of the entire process of opening a company in Canada:
- the legal basis when registering a corporation in Ontario is given by the Business Corporation Act;
- the investors will have to select a business name that respects the requirements stipulated by the Business Corporation Act;
- the company name must contain the legal entity of the company, besides its name, and here, investors can select the word Corporation or the abbreviation Corp.;
- the company’s name can be in English, in French, or in a combined version of the two languages;
- the company will be assigned with a company number, which will be maintained throughout the lifetime of the company;
- investors must select the type of corporation they will register – a corporation for business purposes, or one for non-profit purposes, according to Service Ontario.
What types of corporations can one register in Ontario?
If you want to open a corporation in Ontario, you must know that the Canadian law recognizes several types of corporations. Each type provides specific characteristics although all corporations have mainly the same traits, and they can also be different when refer to the tax regulations applicable to them. Each type can benefit from specific tax advantages and deductions.
At the moment, the law in Canada recognizes the following types of corporations: the Canadian controlled private corporation, the other private corporation, the public corporation, the corporation controlled by a public corporation, and other corporation. The Ontario corporation registration provides the right to change the corporation type under which a business is developed, but please mind that this procedure will have certain tax implications.
In the following section, our team of specialists in company registration in Canada will present the main characteristics that define each type of corporation. For instance, the Canadian controlled private corporation is defined as a legal entity with the following set of characteristics:
- it is a corporation that was a resident in Canada or incorporated in Canada after 18 June 1971;
- it is not controlled by non-resident entities (it refers to both direct control and indirect control);
- it is not controlled by other public corporations (directly or indirectly);
- it is not controlled by another Canadian corporation that lists its shares on foreign stock markets;
- its shares are not listed on a designated stock exchange and the company is not controlled by any combination of the entities presented in this list.
Investors considering the Ontario corporation registration for an entity that is incorporated as an other private corporation must know that this business form is defined by the following: it is a tax resident of Canada and it is not registered as a public entity, it is not controlled by any public corporation, it is not controlled by any federal Crown corporation, nor it is controlled by any combinations of the corporations presented here.
Although for the two types of corporations presented above, the entities have to respect all the required criteria, for the public corporation, the requirements are different. Thus, those who want to open a corporation in Ontario as a public corporation will qualify for the rules of a public corporation in the case in which the entity will respect either requirements presented below.
Thus, a public corporation is deemed to be a public corporation if a class of its shares are listed on the Canadian stock market or if it complies with the rules of the Income Tax Regulations, on matters related to the shareholders, the ownership of shares and others.
If you need in-depth details on the types of corporations presented here, our team of consultants in company formation in Canada can help you; our team can offer more details on other types of corporations presented in this section, and they can also help you in the process of Ontario corporation registration.
We invite you to watch a short video presenting the process on how to register a corporation in Ontario:
What are the fees associated with registering a corporation in Ontario?
The process of opening a company in Canada will always imply the payment of various fees with the local institutions; fees can also be requested for company formation services in Canada, for notary services and other services that investors will need for the registration of the company. The fees will vary from a province to another, but differences can appear based on the selected legal entity. When we refer to registering a corporation in Ontario, investors can expect the following fees:
- submitting the company’s articles of association via internet will cost $300;
- a fee of $360 is charged when filing the documents by mail or in person;
- the registration of a non-for-profit corporation is bound by the payment of a fee of $155 for the standard registration services, which can be processed in a period of 35 business days;
- the non-for-profit corporation can benefit from expedite registration services, which can be completed in 7 working days, after the payment of a fee of $255;
- provided that you want to dissolve the corporation that you have set up in Ontario, the fee charged for the procedure is of $25, for voluntary dissolution.
What are the advantages of a corporation in Ontario?
Each company type available in Canada presents a set of advantages, concerning liability, capital, tax obligations, simpler accounting procedures, reporting and others. In the case of a corporation, it is important to know that the legal entity is considered a different structure from the investors.
This means that the company and the investors are two separate entities, and that the investors will have limited liability for the debts and other liabilities of the company. Those who will open a corporation in Ontario can also enjoy the right to transfer their ownership to another party. Another advantage refers to tax matters, as the corporation can be entitled to various tax advantages, which will differ based on the type of corporation one has registered in this region.
What are the disadvantages of the Ontario corporation registration?
Owning a corporation in Ontario can also have certain aspects that can be seen as disadvantages, but such disadvantages can apply to other company types as well. For instance, the corporation is required to complete a set of corporate records and submit annual financial documents. Although this rule applies to most company types, certain entities can benefit from simpler reporting requirements.
The costs associated with the Ontario corporation registration can also be higher compared to the incorporation of other company types. If you need a more detailed presentation on the advantages and disadvantages of the corporation in Ontario, our team of specialists is ready to assist you.
What should the articles of association contain in Ontario?
The articles of association represent the founding document of a corporation in Ontario, regardless of its type. This document sets out the structure of the company, information on the shareholders, the rights and the obligations of the parties, the object of activity and numerous others.
The articles of association can be signed as a pre-determined version of the document, which means that the document will contain the basic legal provisions required for this founding paper, or they can be modified in accordance with the wishes of the investors, but in the limit of the law. They must contain the number of shareholders, the shareholding structure, information on directors and others; for more information and legal representation, please contact our team of consultants in company registration in Canada.