Business Incorporation in Ontario for Small Business Owners
Guidance on when and how to incorporate your Ontario/Canadian business for tax efficiency.
Thinking about incorporating a business in Ontario? Greg Cowan CPA helps you choose the right structure, coordinate with your lawyer, and build a tax‑efficient incorporated business from day one
What does it mean to incorporate a business?
To incorporate a business means creating a separate legal corporation with its own name, ownership (shares), and tax filings, instead of operating as a sole proprietorship or partnership. When you have an incorporated business, you can often access limited liability protection, new tax planning options, and a clearer path for future growth or sale
Why the way you incorporate matters
Incorporated business vs. sole proprietorship
Moving from a sole proprietorship to an incorporated business changes how you pay tax, how you pay yourself, and how risk is handled. The wrong timing or structure can increase costs without delivering real benefits.
Tax planning built into your structure
Decisions about share structure, who owns which shares, and how profits will be paid out (salary vs. dividends) affect income splitting, access to the lifetime capital gains exemption, and future estate planning.
Avoiding costly do‑overs
Online forms make it easy to “incorporate your business in Ontario”, but fixing a poor structure later (for example, adding family shareholders or a holding company) can be complicated and expensive. Starting with a tax‑optimized structure reduces the need for costly reorganizations
Business incorporation services
Sole proprietors and consultants who want to incorporate a business in Ontario or elsewhere in Canada.
Existing businesses asking “how do I incorporate my business?” and wanting guidance on timing, structure, and tax impact.
Includes
Planning meeting to compare incorporation vs. sole proprietorship for your profits, risk profile and long‑term goals.
Design of your corporate structure and shareholdings (share classes, family involvement and future flexibility).
Written guidance and coordination with your lawyer so the articles of incorporation and minute book are drafted and reviewed with tax and succession in mind, including any necessary CRA elections such as T2057 and GST44.
Post‑incorporation follow‑up on CRA registrations, bookkeeping setup, first‑year filing deadlines, and a focused discussion of your remuneration (salary vs. dividends), income splitting and key transition items (insurance, banking, suppliers/customers, wills, leases and agreements).
FAQs
How do I incorporate a business in Ontario?
You can file incorporation documents yourself online or through a lawyer, but working with a CPA first helps you choose the right structure and avoid changes later. Greg designs the structure and then coordinates with your lawyer to complete the legal steps.
When is it worth incorporating my business?
Incorporation usually makes sense once your business earns more than you need personally, or when legal risk and long‑term plans (bringing in partners, selling the business) start to matter more. Greg walks through the numbers so you can decide with confidence.
How much does it cost to incorporate a business in Ontario?
There are government filing fees plus any legal and professional fees for setting up your structure correctly. Greg helps you understand the total cost up front so you can compare it with the potential tax savings and risk protection over time.
What are the tax benefits of incorporating my business?
Incorporation can allow your profits to be taxed at lower corporate tax rates, give you flexibility to leave money in the company, and create opportunities for income splitting and lifetime capital gains exemption planning. Greg reviews your income pattern and goals to see which of these benefits actually apply in your situation.
Should I stay a sole proprietor or switch to a corporation?
Staying a sole proprietor is often simpler at the beginning, but a corporation can make more sense once profits grow, risk increases, or you plan to bring in family members or future buyers. Greg compares both options with your real numbers so you can decide when and how to make the change.