Incorporating by leaving the self-employed stage is a process that leads to the creation of joint-stock companies. The sole proprietorship at the beginning then becomes a legal person with rights and duties. It has several advantages both legally and economically. Therefore, any sole proprietorship must incorporate as a legal person. But, how to proceed to incorporate? Find here the steps to take to successfully incorporate your business.
Opt for a type of incorporation
To start your incorporation as a self-employed worker, you have the option of doing so either at the federal or provincial level. This choice is made according to the business projects. If you plan to expand your business outside of your province, under these conditions, incorporation at the federal level is the preferred option. Otherwise, the one at the provincial level could very well suit you. For your information, the federal incorporation gives you a protected business name on the national territory.
It gives you the opportunity to do business anywhere in the country and set up your head office there. However, 25% of directors must be permanent residents of Canada. As far as territorial incorporation is concerned, it is cheaper, faster and does not require enough administrative procedures. However, an extra-provincial licence may be required to operate outside the province where the business was incorporated.
Confirm the legal form
The majority of private sole proprietorships incorporate joint-stock companies upon incorporation. It is still a good idea to check if another legal form is not more suitable for your profile. Like other legal statutes, we have:
- The general partnership (SENC);
- The limited partnership (SEC);
- The joint venture;
Similarly, for certain activities, moving to the status of non-profit legal person, association, or cooperative is more advantageous.
Proceed to name registration
The easiest and fastest way to register your business name is to opt for a numbered company. To obtain it, apply to your provincial or federal agency. They are able to provide you with a NEQ (business number in Quebec). It consists of a unique number, the name of the state, and the abbreviation “inc.” On the other hand, to build notoriety, you can think about having a real name, easy to share and remember. It must also be composed of a legal notice (“inc.”, the most frequent or “Itée”).
In addition, it is important to have an element describing the category of products or services provided. It is also allowed to certain professions such as lawyers, optometrists, dentists to insert a professional mention. In all cases, the name must comply with the standards and rules in force applicable to company names.
Build the documentation
The documentation to be provided when incorporating a business varies depending on the authorities. In general, you may be asked to fill in information such as the name and number of shareholders and directors. You will also have to give:
- the address of the registered office;
- the sector of activity;
- the company’s charter;
- the start date of the fiscal year.
In addition, there are the forms of shares, the rights associated with them and the procedures for the liquidation or dissolution of the company.
Make the payment and receive the certificate of incorporation
The costs of incorporating vary depending on the location. They amount to a few hundred dollars in the majority of cases. Be aware that if you are doing a federal incorporation, you may be charged an additional provincial or territorial fee. Once the fee has been paid, your application is processed and you can receive your permits and certificates of incorporation from your business. After which then carry out a check to ensure that all your information is valid or make updates if necessary.
By opting for a sole proprietorship when you started in business, you can always incorporate yourself by following these steps. To get it right, we recommend that you consult an expert in the field. Whether you are a lawyer, notary, entrepreneur, accountant or any other trade, contact IncorporationEntreprise.ca inc. Our corporate incorporation service is for you. From the beginning to the receipt of your certificates, we take care of everything. Do not hesitate to contact us to benefit from a fast and quality service.