Why You Shouldn’t Leave Incorporating Your Business To Chance
Your business is your livelihood. Even though you might have started it or inherited it, incorporating it isn’t a one-off, easy task. At Verhaeghe Law Office in Edmonton, AB, we find that many small business owners assume they don’t need a lawyer to help them with so many different do-it-yourself guides out there. That can’t be further from the truth. Why? Because incorporation documents are not a one-time activity, and they lay out the structure and purpose of your company going forward.
Why Incorporate Your Business?
To understand the complexities of incorporating your business, you first should know the reasons business owners do it.
- Personal Asset Protection - Business owners’ private property (e.g., house, car, etc.) are protected from business debts and claims.
- Tax Flexibility & Incorporation Tax Benefits - Incorporating allows businesses to deduct medical insurance, travel expenses, and other daily business expenses.
- Brand Protection - Incorporating safeguards your brand, which is an often overlooked benefit.
- Perpetual Existence - This simply means that the business continues despite any change in membership or the exit of the business owner or member.
- Deductible Expenses - Premiums that you pay on behalf of your company for medical insurance are 100% deductible when incorporated.
As you can see, there are many benefits from a monetary standpoint and mitigating personal liability perspective. Your business becomes its own entity while you continue to reap the rewards of your hard work. That’s even more reason to ensure that you find somebody with the expertise to handle incorporating your business. It can set you and your business up in the best possible position now and into the future.
Steps To Incorporating Your Business
According to the Innovation, Science and Economic Development Canada website, there are five steps to incorporating your business.
- Naming Your Corporation
- Completing Articles of Incorporation
- Establishing The Initial Registered Office Address And First Board Of Directors
- Filing Forms & Paying Fees
- Processing Your Application
While the ISED lays out the steps, our team can help ensure that the specific needs of your corporation are met. Canada, as a whole, applies very rigorous standards when granting names, as they need to be distinctive enough that people will not associate them with another organization or business.
Next comes completing and signing your articles of incorporation, which establishes the structure of your corporation. Any amendments or changes to this document incur a $200 fee.
Then, you must establish an office address where your corporate records and official documents will be served on the corporation. Since this address is corporate information, it is required to be made public. After this is established, you must file the appropriate forms for the type of corporation you’re establishing and pay the relevant fee.
Finally, your application will be processed, but it must include these three items to be considered complete:
- Includes all necessary documents
- Forms are complete and signed
- Fee is included
Provincial and Territorial Registration
As you can see, the steps to incorporating your business are quite the process. Even after you’ve completed them, you also need to register with the Province and Territory within which you do business. Typically, provinces and territories require newly incorporated businesses to register within a few weeks.
It’s important to seek the help of our team of lawyers to ensure your business is incorporated to suit your needs. The steps to achieve incorporation can be difficult depending on your business, and you owe it to yourself and the future of your company to make sure that you’re set up correctly. For more information about how we can help you, give us a call at 587-410-2500 . We have a team of corporate and commercial lawyers ready to assist you in this exciting new venture for your business.