The decision depends on multiple factors including liability risk, income level, growth plans, and willingness to manage corporate compliance. Incorporation provides limited liability protection, tax planning opportunities, and business credibility, but costs more to establish and maintain with ongoing filing and compliance requirements. Sole proprietorship is simpler and less expensive but provides no liability protection and fewer tax planning options. If your business involves significant liability risk like physical services that could cause injury, professional services where errors could cause client losses, or products that could cause harm, incorporation’s liability protection is valuable. If your business income exceeds the highest personal tax brackets, corporate tax rates may provide tax savings making incorporation worthwhile. If you plan to grow the business, seek external investment, or eventually sell the business, corporate structure provides flexibility that sole proprietorship doesn’t. For very small service businesses with minimal liability risk and income below thresholds making corporate tax advantageous, sole proprietorship may be appropriate initially with incorporation reconsidered as the business grows.

A minute book is the official record book of a corporation containing all required corporate documents including articles of incorporation, bylaws, shareholder lists, director lists, share certificates and transfer records, minutes of all meetings, and written resolutions passed by shareholders and directors. Every corporation is legally required to maintain a minute book and keep it available at the registered office. The minute book proves corporate decisions were properly authorized, documents the history of share ownership and transfers, demonstrates compliance with corporate governance requirements, and provides records needed for loans, sales, audits, or disputes. Lenders and investors routinely require minute book review as part of due diligence before providing financing or making investments. Without a properly maintained minute book, corporations may be unable to complete important transactions, shareholders may dispute who owns shares and in what amounts, and corporate limited liability protection may be compromised if the corporation can’t demonstrate it was operated properly as a separate entity. Annual minute book updates maintain current records at minimal cost compared to reconstructing years of missing documentation when records are needed urgently for a transaction or compliance requirement.

The total cost to incorporate includes government fees, professional fees, and optional services depending on complexity and level of assistance needed. Ontario incorporation government fees are approximately three hundred dollars for basic online filing. Federal incorporation fees are approximately two hundred dollars for online filing. Professional fees for incorporation services including name search, preparation of articles and organization documents, initial minute book setup, and filing assistance typically range from seven hundred to fifteen hundred dollars depending on complexity and level of service. Additional costs may include NUANS name search reports required for federal incorporation, corporate seals and minute book supplies, business number registration, and initial registered office services if you don’t have a business address. Total all-in costs for basic Ontario incorporation with professional assistance typically range from one thousand to two thousand dollars. Federal incorporation costs are similar. Ongoing annual costs include annual return filing fees, accounting fees for corporate tax returns, minute book maintenance, and registered office fees if applicable. The upfront and ongoing costs of incorporation should be weighed against the liability protection and tax benefits incorporation provides to determine whether incorporation is worthwhile for your specific business situation.

Failing to file corporate annual returns results in escalating consequences starting with late filing penalties and potentially ending with involuntary dissolution of your corporation. Ontario corporations that don’t file annual returns within sixty days of the due date are charged late fees. If returns remain unfiled for extended periods, the corporation is marked as not in good standing which prevents certain corporate actions and can block business transactions requiring proof of good standing. After two years of non-filing, Ontario can dissolve the corporation involuntarily, terminating its legal existence and eliminating the corporate structure’s liability protection. Federal corporations face similar consequences with potential dissolution for prolonged non-filing. Involuntary dissolution doesn’t eliminate corporate debts or obligations, but complicates resolving those matters and can expose former shareholders and directors to increased personal liability. Even after dissolution, revival is possible by filing overdue returns and paying accumulated penalties, but revival is expensive and time-consuming. The cost and consequences of non-filing far exceed the relatively minimal cost of timely annual return filing, making it essential to track filing deadlines and complete required filings when due each year.

Paralegals can provide many business services including business name registration, federal and Ontario incorporation, minute book maintenance, annual return filings, and various corporate compliance services. The Law Society of Ontario authorizes paralegals to provide these services as they don’t constitute restricted legal services requiring lawyer involvement. For straightforward business structures, routine corporate maintenance, and standard incorporation matters, paralegal services provide professional assistance at lower cost than law firms typically charge for the same work. However, complex corporate matters including shareholder agreements with detailed terms, significant corporate reorganizations or restructuring, merger and acquisition transactions, securities law compliance for companies raising capital, and situations involving substantial legal issues or disputes should involve lawyer expertise. Most small and medium businesses find paralegal services entirely adequate for routine business registration, incorporation, annual maintenance, and standard corporate compliance needs with referrals to lawyers when complex legal issues arise requiring specialized expertise beyond paralegal scope. The decision depends on complexity of your specific situation and what level of expertise your business needs require.

Yes, corporations can use a residential address as the registered office address in Ontario and federally, though there are practical considerations to weigh. The registered office address is public information accessible through corporate registry searches, meaning anyone can look up your corporation and see the registered office address. If you value privacy and don’t want your home address publicly available, using a professional registered office service or commercial business address is preferable. The registered office must have someone available during normal business hours to receive official documents and notices, and the minute book must be kept at the registered office or another designated location. If you operate your business from home and are comfortable with the address being public, using your home address is legally acceptable and costs nothing unlike professional registered office services that charge annual fees. Many small business owners use home addresses initially and switch to commercial addresses as the business grows. If you use a home address, ensure your municipality allows home-based businesses in your zoning district and obtain any required home occupation permits before operating your business from a residential location.

Business licensing requirements vary dramatically based on what type of business you operate, where you operate it, and what services or products you provide. Most municipalities in Ontario require a general business license for businesses operating within municipal boundaries, with requirements, fees, and processes varying between municipalities. Some municipalities require specific licenses for certain business types like restaurants, retail stores, or home-based businesses. Provincial licenses are required for specific professions and trades including contractors, real estate agents, travel agents, private investigators, and various other regulated activities. Federal licenses are required for businesses in federally regulated industries like food processing, importing and exporting, transportation, and certain other sectors. Specific permits beyond general business licenses may be required for food service operations, alcohol sales, outdoor signs, special events, and activities regulated for health, safety, or environmental reasons. Professional regulatory bodies license members of regulated professions including lawyers, paralegals, doctors, engineers, architects, accountants, and many other professions. The best approach is researching requirements specific to your business type and location by contacting your municipal licensing department, relevant professional regulatory bodies, and checking provincial and federal government websites for industry-specific requirements before starting operations. Operating without required licenses can result in fines, closure orders, and inability to enforce contracts.

Share transfers in private corporations require following procedures set out in the corporation’s bylaws, articles, and any shareholder agreements. Basic steps include the selling shareholder completing a share transfer form transferring their shares to the purchasing shareholder, consideration being paid from purchaser to seller as agreed, the corporation’s directors approving the transfer if bylaws require director approval, the share certificate being surrendered by the selling shareholder, a new share certificate being issued to the purchasing shareholder, the transfer being recorded in the corporate minute book including updating the share register and ledger, and resolutions being passed documenting the transfer and any related matters. Many private corporations have transfer restrictions in their articles or shareholder agreements requiring shares to be offered to existing shareholders before being sold to outsiders, requiring director or shareholder approval for transfers, or imposing other conditions on share transfers. Tax implications of share transfers should be considered as transfers may trigger capital gains taxes, deemed dividends, or other tax consequences depending on the structure and whether transfers are at fair market value or for nominal consideration. Professional assistance with share transfers ensures all required procedures are followed, proper documentation is prepared, minute book records are updated correctly, and tax implications are identified before completing transfers.

Many small corporations have incomplete or poorly maintained minute books from years of neglecting required documentation. This creates problems when minute book review is required for loans, business sales, audits, or disputes. Minute book reconstruction involves researching corporate history through government filings, tax returns, bank records, and any existing partial documentation to piece together what happened, then preparing resolutions retroactively documenting corporate decisions and changes that occurred but were never properly recorded. While retroactive documentation isn’t ideal compared to maintaining current records, it’s legally acceptable to reconstruct minute books bringing them up to date. The process involves reviewing articles of incorporation and any amendments filed, researching registered office and director changes through government records, reconstructing share issuance and transfer history based on available information, preparing resolutions documenting routine annual requirements for missed years, documenting material corporate decisions based on tax returns and financial records, and organizing all documentation in proper minute book format with indices and tabs. Reconstruction cost depends on how many years are missing and how complex corporate history is, but addressing missing records when identified is essential before they’re urgently needed for a transaction. After reconstruction brings records current, establishing annual maintenance prevents future gaps.

Corporation dissolution should be considered when business operations have permanently ceased and you have no plans to restart or sell the business, when the corporation is inactive and maintaining it costs more than any benefit it provides, when restructuring makes more sense to move operations to a different corporate entity, or when the corporation served a specific purpose that has been completed. Before dissolving, ensure all corporate debts and obligations are satisfied or arrangements made to satisfy them, all tax returns are filed and taxes paid including final tax returns for the dissolution year, all employee obligations including final pay and source deduction remittances are completed, the corporation is removed from any contracts, leases, or agreements it’s party to, any assets are distributed to shareholders or transferred elsewhere as appropriate, and all required government filings and notices are completed. The dissolution process involves passing shareholder resolutions authorizing dissolution, filing articles of dissolution with the incorporating jurisdiction, filing final tax returns indicating dissolution, closing bank accounts and business numbers, and completing any industry-specific deregistration. After dissolution, the corporation ceases to exist as a legal entity. Some jurisdictions allow revival of dissolved corporations if needed later, but revival is complicated and expensive compared to properly maintaining an active corporation. If uncertain whether to dissolve, speak with professional advisors about whether maintaining the inactive corporation makes sense for your situation or whether dissolution is appropriate.