When To Incorporate Your Side Hustle

Tags: #Business Planning #Corporation #New Business Owners #Side Hustle

Welcome to the last post in our Side Hustle Series. After following the advice from our previous articles, you’ve likely set up a profitable side hustle that is starting to take off. Congrats! As things continue to go well, you might wonder what makes sense as a next step. Our answer? Incorporation.

In this post, we’ll go over how to incorporate a business, including when is the best time to do so. Let’s dive in.

Confident entrepreneur reviewing notes about incorporating his side hustle in a modern office building.

Why Start a Side Hustle in Canada? (Side Hustle Series)
How to Register a Business While Working Full-Time (Side Hustle Series)
Choosing the Right Business Structure for Your Side Hustle (Side Hustle Series)
Tax Basics for Side Hustlers in Canada (Side Hustle Series)
Invoicing & Getting Paid (Side Hustle Series)
Bookkeeping for Beginners (Side Hustle Series)

What Does it Mean to Incorporate a Business?

In plain terms, incorporating a business means changing your business structure from a Sole Proprietorship or General Partnership to an incorporated entity. This is often done to create a separate legal entity (the corporation) under which you will run your business.

In Canada, you can incorporate your business at a federal or provincial level.

What is the Difference Between Corporation and Incorporation in Ontario?

It’s common to mix up corporation and incorporation. Think of incorporation as the “how” of forming a business, and corporation is the “what”, also known as the result.

What’s the Difference Between Registering and Incorporating a Business in Ontario?

A registered business is tied directly to an individual or individuals. Incorporation means the business is tied to a corporation, making it a separate entity from the business owner.

Businesswoman on phone. Ready to set up your corporation the right way? Incorporate now!

Why You Should Incorporate Your Business

Incorporated businesses have several benefits that come along with the designation. If you plan to expand on a national or global scale, this is a crucial first step. Here are some main perks you can enjoy as an incorporated business:

Safeguard your business name in your desired jurisdiction (federally or provincially).
Personal liability protection from potential debts and liabilities associated with your business.
Tax advantages, because corporations are taxed at a lower rate than Sole Proprietorships or General Partnerships.
The flexibility to adapt the corporation itself as your business evolves.

How to Incorporate a Business in Ontario

Incorporating a business in Ontario follows a process that involves filing legal documents called Articles of Incorporation. These include:

Registered office address
Directors full names and addresses
Share structure (one or two classes of shares, or custom share structure)
Selected legal ending for the corporation name

Incorporating is an exciting time, but also a stressful one. At Ontario Business Central, we have your back. We’ll walk you through everything you need to know and file the incorporation order for you.

How Much Does it Cost to Incorporate a Business in Ontario?

Basic Ontario incorporation with Ontario Business Central, which includes a BN number and a NUANS report (which is mandatory in Ontario, whether it’s done by us or a third party), is $109.99. Optional add-ons include:

Preliminary corporate name search for $15.40
Tradename registration for $66.00 (subject to a $60 government fee)
Payroll registration for $21.99
HST registration for $54.99
Corporate Supplies Package for $161.99
Set fees (Draft Articles, Preparation of Documents, Electronic Filing Fee, Handling, and Government Registration Fee) for $457.35

Signs It’s Time to Incorporate Your Side Hustle

You have an annual revenue of over $30,000.
You want to limit personal liability.
You’re hiring people or planning to grow.
You want to keep personal and business finances separate.
You’re working with clients who prefer or require dealing with a corporation.

Step-by-Step: How to Incorporate in Ontario with Ontario Business Central

Choose your Business Name.
Fill out the Ontario Incorporation Form online.
Select corporate add-ons: Minute Book, seal, shares ledger.
Receive your documents.
You’re done!

Ready to Take the Leap?

Incorporation is a big step, yet it opens many doors for growth and protection. You don’t have to figure it out alone; Ontario Business Central is here to help every step of the way. Contact us today and revisit our side hustle series to take the next step on your journey with confidence.

inquiries@ontariobusinesscentral.ca
Toll-Free: 1-800-280-1913
Local: 1-416-599-9009
Fax: 1-866-294-4363
Office Hours: 9:00am – 5:00pm
Monday – Friday E.S.T.

Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.