Company Incorporation in Ontario

Quick Online Incorporation of Your Business at the Best Price. Incorporate your Company in Ontario and in Canada.

Other corporate services in Ontario

  • Annual Returns
  • Articles of Dissolution
  • Articles of Amendment
  • Notices of Change
  • Articles of Amalgamation
  • Registration of Extraprovincial corporation

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Incorporation in 1 to 2 business days

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Services offered throughout Central Canada (Ontario and Quebec)


What is a business corporation?

A corporation is legally distinct from its shareholders and directors. It is formed by filing articles of incorporation with the appropriate government authority, which then issues a certificate of incorporation. The business corporation acts in its own name, including when entering into contracts, and pays its own taxes.

Unlike not-for-profit corporations, business corporations are generally intended to operate a business and make a profit, or earn income from investments.

Profits are paid out to shareholders in the form of dividends. The power to declare dividends is exercised at the discretion of the directors. Therefore, unless there is a “unanimous shareholder agreement”, there is no obligation to force the directors to pay dividends.

Small businesses are very often operated through a business corporation. As a result, most business corporations have a limited number of directors and shareholders. One person may be both sole director and sole shareholder.

Why incorporate my business?

There are a number of advantages to running a business via a corporation, although these may not apply to everyone. Since the corporation is a separate legal entity, the liability of its shareholders and directors is limited in the event of a lawsuit. In addition, the corporate tax rate, which is substantially lower than that of individuals, may allow tax deferral by deciding when dividends are paid.

There are exceptions, however. Despite the general principle that shareholders' liability is limited to the amount paid on their shares, there are times when a shareholder will be personally liable. In such cases, the corporate veil may be lifted, and the shareholder may be held civilly liable. Similarly, if the shareholder has made himself personally liable in a contract (such as a loan agreement), then he will incur personal liability.

Regarding the tax rate, the lowest tax rate of 12.2% (in Ontario, in 2024) is not applicable for all types of income. This rate applies to active business income earned by Canadian-controlled private corporations (CCPCs) as defined in the Income Tax Act. On the other hand, for any active business income exceeding $500,000, a higher tax rate will apply (26.5% in Ontario, in 2024).

In the case of passive income (e.g. dividends or interest), the tax rate is higher and generally does not allow for tax deferral. It is advisable to consult a tax specialist if you have any questions about corporate taxation.

What is the difference between an Ontario and a Federal corporation?

In Canada, it's possible to incorporate both provincially and federally. Over time, provincial and federal incorporation laws have been largely harmonized. As a result, Ontario and federal corporations are very similar in terms of their incorporating legislation, although there are some technical differences. The vast majority of companies (especially the smaller ones) incorporate provincially. However, it may make sense to incorporate federally if the intention is to move the registered office to another Canadian province in the future, which is not possible under Ontario incorporation.

Among the technical differences between the provincial (Ontario) and federal levels is the possibility for Ontario companies to have several identical classes of shares. It is not clear whether this is permitted for federal corporations; many believe that several identical classes are in fact one and the same class. Having several identical classes is useful for tax purposes, for example to avoid paid-up capital being diluted equally among all shares of the same class. Paid-up capital is the amount that shareholders can recover tax-free. In addition, having several identical classes means that dividends can be paid out on a discretionary basis between several classes.

Another difference is that Ontario law allows a written resolution in lieu of a shareholders' meeting not to be signed by all shareholders entitled to vote, if it is signed by shareholders holding a majority of the shares. At the federal level, for a written resolution to replace a meeting, it must be signed by all shareholders entitled to vote. Ontario's legislation provides greater flexibility in this regard.

In addition, in Ontario it is possible to have shares without a certificate, unlike federal companies. Uncertificated shares allow the shares not to be represented by a document in paper form. However, at the federal level, it is permitted for shares not to be represented by a certificate if a non-transferable written acknowledgment of their right to obtain such a security certificate is delivered to the holders.

What is a shareholder?

A shareholder is a person who owns shares in a corporation. Thus, the shareholder has no direct rights in the company's assets, but the shares he or she holds in the company confer rights. Fundamental rights include the right to vote at shareholder meetings, to receive dividends and to receive the remaining assets in the event of the corporation's dissolution or liquidation.

Where the corporation's articles provide for a single class of shares, the holders of these shares have equal rights. Only when there is more than one class is it possible to treat shareholders unequally.

For example, holders of “preferred” shares generally have a limited right to dividends. This dividend will either be calculated as a percentage, or the amount of the dividend will be fixed in advance in the articles of incorporation. The same applies to the amount payable in the event of dissolution or liquidation of the corporation; holders of common shares are entitled to receive the remaining assets (without limit), while holders of preferred shares will receive an amount fixed in advance in the articles.

It is also possible to provide that certain shares have voting rights and others do not. Shares may have multiple voting rights (e.g. 2 or more votes per share).

It can also be provided that certain classes of shares are redeemable, at the option of the corporation and/or the holder of the shares, and/or when a specific event occurs (for example death or bankruptcy).

What is contained in the Articles of Incorporation?

The articles of incorporation include the name of the corporation, which may have two versions: one English and one French. They also specify the number of directors of the corporation, which may be a fixed number, or a minimum and maximum number, allowing shareholders to set the number between these limits. The description of the different classes of shares (if there is more than one) is also set out in the articles. It may also contain provisions restricting the transfer of shares or other securities.

The articles may be amended from time to time, with the consent of the shareholders (except in certain cases where the consent of the directors is sufficient). The authorization of the shareholders to amend the articles is done by special resolution. A special resolution is a resolution adopted by at least two-thirds of the votes. An amendment of the articles will be required, in particular, to create or eliminate classes of shares, or to convert shares of a class into shares of another class.

Amendment of the Articles requires that Articles of Amendment be filed with the appropriate governmental authority. The law requires that the articles of amendment must be kept with the other books and records of the corporation.

For small companies, it is very important that the articles contain restrictions on the transfer of shares and other securities. Securities legislation provides that the transfer of securities must be restricted by the articles or by an agreement in order for the corporation to qualify as a private issuer. Failing to qualify as a private issuer, any corporation must produce a prospectus when it distributes its securities, which is very costly and complex. In general, it is sufficient that the transfer of securities be subject to the consent of the board of directors. This means that a shareholder will only be able to transfer their shares if the directors approve the transfer.

Is a law firm?
Although we are trained as lawyers, and licensed to practice law in Canada, this Ontario incorporation service is not a legal service. We prepare documents according to customer instructions, and offer a variety of standard organizational templates. For any questions of a legal or tax nature, customers are encouraged to consult a lawyer or tax specialist before using our services to incorporate their company.
What are the advantages to having more than one class of shares?

Having several classes of shares with different rights provides greater flexibility. For example, sometimes the founder of a company wishes to issue shares to a new investor without conferring the right to vote at shareholder meetings. This also makes it possible to issue "preferred" shares.

Holders of “preferred” shares generally have a limited right to dividends. This dividend will either be calculated as a percentage, or the amount of the dividend will be fixed in advance in the articles of association. The same applies to the amount payable in the event of dissolution or liquidation of the corporation; holders of common shares are entitled to receive the remaining assets (without limit), while holders of preferred shares will receive an amount fixed in advance in the articles.

It is also possible to provide that certain shares have voting rights and others do not. Shares may have multiple voting rights (e.g. 2 or more votes per share).

It can also be provided that certain classes of shares are redeemable, at the option of the corporation and/or the holder of the shares, and/or when a specific event occurs (for example death or bankruptcy).

How is the name search made?
Name searches are performed by ordering a NUANS report. The NUANS Report will list all identical or similar names used in the province, or nationwide for federal corporations.
What is the difference between a director and an officer?

A director is a member of the Board of Directors. Individually, he or she has no powers unless the Board specifically grants them. Directors make decisions by voting at Board meetings. Decisions are generally taken by majority vote, subject to any unanimous shareholder agreement. Officers are persons appointed by the Board of Directors to specific positions: President, Vice-President, Treasurer, Secretary. They may have detailed functions, and implement decisions taken by the Board of Directors.

As with shareholders, directors can make decisions by written resolution signed by all directors entitled to vote. Most of the time, for smaller companies, directors make decisions by written resolution instead of holding actual meetings.

The number of directors that a corporation must have is provided for in the articles, or the articles provide for a minimum number and a maximum number of directors. The shareholders will in this case have the power to set the number within these limits; sometimes the power to set the number of directors is delegated to the directors themselves.

How to register for GST/HST numbers?
GST/HST registration is done through the Canada Revenue Agency. Registration can be done by telephone or online. A number of details are required, including the directors' social insurance numbers. We offer tax registration services for all corporations we incorporate.
What is a minute book and why is it important?
The "minute book" is a set of documents required by law for all corporations. These documents need not all be in the same binder. The minute book contains directors' and shareholders' resolutions, and various registers required by law, including the securities register showing the number of shares held by each shareholder. Following incorporation, resolutions must be passed, notably to issue shares, adopt by-laws, appoint officers and elect directors. These organizational resolutions form part of the minute book.
How are shares issued or transferred?

A resolution of the board of directors is required to authorize the issuance of shares. This resolution must specify to whom the shares will be issued, the number and class of shares that will be issued to him, as well as the consideration that the subscriber must pay in exchange. Ontario and federal law require shares to be fully paid for before being issued (unlike other jurisdictions, including Quebec and Nova Scotia). Following authorization for the issue of shares, a share certificate is delivered to the subscriber and the transaction is recorded in the corporate records.

Shares can be issued in exchange for money, property or services rendered. When shares are issued in consideration for property or services rendered, the directors must set a monetary value for these property or services. They will be personally liable if the fair value is less than the amount they should have received in money.

It is therefore prohibited, with certain specific exceptions, to issue shares in exchange for a promise to pay or a note. If such a situation occurs, the shares would be considered to be issued without having been paid for and the issue may be canceled.

In Ontario and federally, shares have no par value. The par value is a minimum amount for which shares can be issued. Since the par value does not generally represent the true value of shares, this concept has been abolished in most Canadian provinces and at the federal level. However, it is still possible to have shares with par value in certain provinces: Quebec, British Columbia and Nova Scotia. In practice, even in these provinces we rarely see shares at par value.

As for the transfer of shares, this must first be authorized by the directors (depending on the provisions of the articles). To validly transfer shares, the certificate representing the shares must be endorsed and delivered to the purchaser. If the shares are uncertificated (Ontario only), the transferee must give transfer instructions to the corporation.

Can an Ontario corporation conduct business in another province?
Yes. However, in general the corporation must register in the provinces where it operates a business or has an establishment. Similarly, a corporation incorporated federally or in another province must register in Ontario in order to be authorized to carry on a business there.
Why corporations should have by-laws?
The by-laws provide for different internal management rules for the corporation. These by-laws include rules relating to the quorum of shareholders' meetings, the functions of the officers, and the authority to sign documents on behalf of the company, among other things. The by-laws are adopted by the board of directors, and subsequently the shareholders can confirm, modify or reject them.
How to dissolve a corporation?

Under the corporate laws (Canada and Ontario), a special resolution is normally required in order to authorize the dissolution of the corporation. The Canada Business Corporations Act, a special resolution of each class of shares is required, even if they are not otherwise entitled to vote.

After the directors of the corporation discharge its liabilities and distribute its property between the shareholders, Articles of dissolution must be filed, and a certificate of dissolution will subsequently be issued.

A corporation may also be dissolved after a "formal" winding up or liquidation of the corporation, which also requires a special resolution from shareholders. In such case, the shareholders must appoint a liquidator. Most of the times, small businesses decide to dissolve the corporation without appointing a liquidator, which means that the board of directors is responsible to discharge liabilities and distribute the remaining property of the corporation.

How to add a new shareholder?

There are usually two way to add a new shareholder in a corporation. The first way is to issue new shares to such new shareholder. The subscriber of shares will need to pay for his or her shares the price agreed with the corporation (e.g. $1 per share). When new shares are issued, the existing shareholders may be diluted. For example, if a shareholder owns 100 common shares representing all the outstanding shares of the corporation, and 100 new common shares are issued to a new shareholder, the first shareholder will own 50% less of the shares of the corporation.

Another way to add a shareholder is for an existing shareholder to sell or otherwise transfer shares that he owns to another person. Contrary to the issue of shares, a share transfer does not imply an injection of capital in the corporation; the purchase price (if any) is paid to the seller and not to the corporation. It is important to note that most of the time, in small corporation a share transfer is subject to the approval of the board of directors, in accordance with the articles of the corporation.

What is a unanimous shareholder agreement?

A unanimous shareholder agreement is an agreement between all the shareholders (and other persons, if any) of the corporation where the powers of the directors are in whole or in part restricted. Such restriction may be, for example, that some powers of the directors be subject to the shareholders approval. Another type of restriction is where some powers of the directors are withdrawn, to be exercised directly between the shareholders.

It is important to note that when there is a unanimous shareholder agreement, any new shareholder of the corporation becomes automatically a party to such agreement.

Can LLCs be formed in Ontario?
No. LLC (Limited Liability Corporations), which are often used in the United States to operate a business, don't exist in Canada. LLC is an hybrid between partnerships and corporations, because even though it is legally structured as a partnership, a LLC has a separate legal personality, unlike Canadian partnerships. Legal personality allows to limit the liability of the owners or shareholders.

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About Us was founded by Jimmy Oppedisano, J.D., and is a division of Pronto Corporate Services Inc. Pronto Corporate Services offers corporate services in Central Canada (Quebec and Ontario), such as incorporations, corporate updates, amalgamations and corporate reorganizations. Jimmy Oppedisano is trained in North American Common Law and Canadian taxation, and his clients include small and medium-sized businesses, law firms, accounting firms and institutional clients. is not a law firm, and Pronto Corporate Services Inc. does not provide any legal services in Ontario.