It takes courage to not only take the risk but also to incorporate your company in Canada. Congratulations! But now what’s next? There are many critical actions you must take to maintain your organization on the right side of the law while still keeping up with the digital world. It is critical to do the measures indicated below immediately after incorporation, as well as those required for continuous maintenance, as these are the foundation of any business’s proper operation.
5 Things to do After Incorporating a Business in Canada
Once you’ve incorporated your business in Canada, there are a few crucial actions you need to take:
Establish a Business Bank Account
The first step is to open a business bank account. When a limited liability corporation is officially formed, it separates from the business owner. As a result, the robo-advisor operates independently of your own account. If you skip this stage, you will miss out on all of the benefits of starting your business the right way.
Obtain Your Business Number from Canada Revenue Agency
The Business Number is used to identify income tax payers and create accounts with the CRA. In most circumstances, the CRA will produce the company number automatically after the registration process is complete. The duration for assigning business numbers to Ontario provincial companies ranges from one to four working days.
Share Purchase by Shareholders
After setting up the business bank account, each shareholder must purchase their shares by depositing money into this account. Ordinarily, for a new corporation, shareholders pay a nominal amount as listed in the minute book documents.
Registration for GST/HST Number
Lastly, you need to decide whether to register your business for a GST/HST number. If you expect your business to generate more than $30,000 in annual gross revenue, registration is mandatory. However, even if you don’t anticipate hitting this threshold immediately, early registration can be beneficial. By doing so, you can accumulate tax credits for business expenses, potentially resulting in a tax refund.
Plan your Business Expenses
With the establishment of your business account post-incorporation, you can make cheques payable to your corporation. Funds generated after incorporation can be deposited directly into your corporate bank account. Payments for business expenses should be made through the corporate bank account, and business expenses paid by cash should be tracked and reimbursed by the corporation. The corporation should reimburse business vehicles and home office expenses.
Ongoing Corporate Responsibilities
Incorporation comes with several ongoing responsibilities. To enjoy the legal and tax benefits of incorporation, you must keep your corporation compliant and up-to-date. Here are the key maintenance tasks:
Minute Book and Share Records
You are legally required to maintain your company documents in an organized manner. This can be done through a traditional paper binder or a secure electronic minute book.
Regular Company Updates
Whenever there are changes to your company’s details (such as adding a new director or changing the business address), you need to file the necessary forms with the government and prepare corporate resolutions to officially approve these changes.
Annual Return and Resolutions
Every year, your company needs to file an annual return with the government and pay the associated fees. Additionally, you need to prepare annual shareholder and director resolutions. These are mandatory requirements to keep your business compliant. If you fail to file the annual return, your company could be dissolved.
Conclusion
Incorporating a business in Canada is a huge step forward, but the effort does not stop there. It is critical to understand the post-incorporation steps and continuing maintenance chores required to keep your company compliant and maintain its existence as a separate legal entity. If you are unclear about any of these actions, it is always advisable to get legal guidance.
OnDemand International’s experts will help you in every aspect of post-incorporation in Canada. So, what are you waiting for? Contact them today!