Incorporating a business in Ontario, Canada is a major milestone for entrepreneurs looking to protect personal assets, reduce taxes, and build a scalable operation. Whether you are a freelancer, consultant, or growing startup, understanding the Ontario incorporation process is critical to long-term success.

This step-by-step guide explains how to incorporate a business in Ontario, the key decisions involved, and common mistakes to avoid—so you can start your business on the right footing.

Why Incorporate Your Business in Ontario?

Incorporation offers several advantages for Ontario business owners:

• Limited personal liability
• Potential tax savings through the Small Business Deduction
• Improved credibility with banks and clients
• Easier access to financing and grants
• Flexible income-splitting and tax planning opportunities

In Ontario, corporations are governed by federal (CBCA) or provincial (OBCA) legislation.

Step-by-Step Guide to Incorporating a Business in Ontario

Step 1: Choose Federal vs. Ontario Incorporation

Ontario (Provincial) Incorporation

• Business name protected only in Ontario
• Lower compliance complexity for local businesses

Federal Incorporation

• Name protection across Canada
• Additional provincial registration still required in Ontario

📌 Tip:

Most small businesses operating solely in Ontario choose provincial incorporation.

Step 2: Select a Business Name or Go Numbered

You can choose:

• Named Corporation (requires NUANS name search), or
• Numbered Corporation (e.g., 1234567 Ontario Inc.)

Named corporations offer branding benefits, while numbered corporations are faster and cheaper to set up.

Step 3: Complete a NUANS Name Search (If Applicable)

• Mandatory for named corporations
• Confirms your business name is unique in Ontario
• Valid for 90 days

Step 4: File Articles of Incorporation (Form 1)

You must file:

• Articles of Incorporation
• Registered office address (Ontario required)
• Directors’ information
• Share structure

This can be done:

• Online through Ontario Business Registry, or
• With the help of a CPA or legal professional

Step 5: Create Corporate Records (Minute Book)

Ontario corporations must maintain:

• Articles of Incorporation
• Shareholder and director registers
• Share certificates
• Corporate resolutions

Failure to maintain records can cause issues during CRA audits or financing applications.

Step 6: Register for CRA Accounts

Once incorporated, register for:

• Corporate income tax (T2)
• HST (if applicable)
• Payroll account (if hiring employees)

Step 7: Open a Business Bank Account

Ontario banks require:

• Articles of Incorporation
• Business number (BN)
• Corporate resolutions

A separate bank account is essential to maintain limited liability protection.

Ontario Corporate Tax Considerations

• Ontario small business corporate tax rate is significantly lower than personal tax rates
• Corporate income tax filing deadline: 6 months after fiscal year-end
• Taxes payable are often due 2–3 months after year-end

Proper tax planning from day one can result in substantial long-term savings.

Common Mistakes When Incorporating in Ontario

• Choosing the wrong share structure
• Failing to register for HST on time
• Poor bookkeeping after incorporation
• Missing corporate tax deadlines
• Not maintaining corporate records

Working with a CPA early helps avoid costly corrections later.

Frequently Asked Questions (FAQs)

How much does it cost to incorporate a business in Ontario?

Government filing fees typically range from $300–$360, excluding professional fees.

Do I need a lawyer or CPA to incorporate in Ontario?

Not legally required, but highly recommended to ensure proper tax planning, share structure, and compliance.

How long does it take to incorporate in Ontario?

Online filings can be completed within 1–2 business days.

Is incorporation mandatory for Ontario businesses?

No. Many businesses start as sole proprietorships, but incorporation becomes beneficial as income and risk increase.

Do Ontario corporations need to file annual returns?

Yes. Ontario corporations must file:

• Annual corporate tax return (T2)
• Annual information return

Can a freelancer or contractor incorporate in Ontario?

Yes. Many freelancers and independent contractors in Ontario incorporate for tax deferral and liability protection.