Professional Learning Centre

Advantages of Incorporating:

  • Ability to Raise Capital: A corporation may be able to obtain its own investments or credit.
  • Adding Operating Name/s: If you wish to operate more than one business, you can add additional business names under your existing corporation.
  • Director Flexibility: Since the corporation has its own identity, it is not affected if directors, officers, or shareholders of the corporation change as long as the minimum director/s remains. This is also beneficial for estate planning as the corporation continues to exist after the shareholders die.
  • Incorporation Never Expires: Once you have completed the incorporation, there is no requirement to re-register or renew the incorporation. The incorporation is continual throughout time, as long as you wish for it to be active.
  • Name Protection for Business Name: The name that you choose for your corporation becomes protected upon completion of the Articles of Incorporation within the jurisdiction of incorporation. If someone, after you have incorporated, decides to use the same name, the name will be refused. If someone registers or incorporates a similar name, you may be able to proceed with a name change to the infringing business name.
  • Potential Tax Advantages: There may be tax advantages to incorporation. A corporation in most cases has lower tax levels than any individual tax bracket.

Disadvantages of Incorporating:

  • Compliance: Most governing bodies have yearly mandatory requirements to ensure the Professional Incorporation remains in compliance. Typically, a Certificate of Status or Corporate Profile Report is required. Ontario Business Central offers these two products under Searching Existing Businesses. There may also be other requirements.
  • Costs: The initial costs for a corporation are higher than other options available for businesses, which is approximately $700.00.
  • Paperwork: Having a corporation means more paperwork in most cases. Not only are you required to maintain personal records for yourself as a shareholder, you are also required to maintain the records for the corporation.
  • Tax Filing: Since a corporation has its own identity, it also has to file its own tax returns. The individual shareholder must file his/her personal tax return along with a secondary tax return for the corporation.

Choosing a Corporate Name

A Professional Ontario Incorporation is different from any other incorporation in Ontario when selecting a business name. Most Professional Incorporations include reference to the individual or individuals’ personal name. This practice is not an absolute but it is most commonly used to establish the business name. Often, the governing body reviews the business name for approval prior to the incorporation being completed. You may want to confirm with your governing body if this is a requirement before proceeding. To assist you in gaining quick access, we have included a listing of most professions with their governing body website under Professional Colleges and Governing Body Links.

Examples of a professional corporate name are as follows:

  • John Smith Medical Professional Corporation
  • Smith Dentistry Professional Corporation
  • Smith & Jones Chiropractic Clinic Professional Corporation
  • John A. Smith Law Professional Corporation
  • Smith Société Professionnelle

Legal Element: The only two legal endings available to a Professional Incorporation are:

  • Professional Corporation or Société Professionnelle

Establishing an Ontario Professional Corporation

Regulated professionals who wish to incorporate their practices should consult their governing body for conditions of incorporation specific to their profession.

Members of the following professions would be eligible to operate a professional corporation:

  • Chartered accountants under the Chartered Accountants Act, certified general accountants under the Certified General Accountants Association of Ontario Act, and lawyers under the Law Society Act (responsibility of the Ministry of the Attorney General).
  • Audiologists, chiropodists including podiatrists, chiropractors, dental hygienists, dental surgeons, dental technologists, denturists, dieticians, massage therapists, medical laboratory technologists, medical radiation technologists, midwives, nurses, occupational therapists, opticians, optometrists, pharmacists, physicians and surgeons, physiotherapists, psychologists, speech language pathologists, and respiratory therapists under the Regulated Health Professions Act (responsibility of the Ministry of Health and Long-Term Care).
  • Social workers and social service workers under the Social Work and Social Service Work Act (responsibility of the Ministry of Community and Social Services).
  • Veterinarians under the Veterinarians Act (responsibility of the Ministry of Agriculture, Food and Rural Affairs).

Looking for More Information Regarding How to Complete your Ontario Professional Incorporation? Contact your Governing Body.

To assist you in locating information, we have provided the specific link regarding incorporation from each governing body website. Please refer to the following list:

Professional Colleges and Governing Body Links

History of Ontario Professional Incorporation

In the 2000 Ontario Budget, the Ontario government announced its intention to allow regulated professionals to incorporate their practices.

Professional Incorporation would provide many of the same tax and non-tax advantages enjoyed by other incorporated self-employed individuals. However, professional liability will not be limited through incorporation and shareholders of professional corporations are restricted to members of the same profession.

How Long Does it Take to Complete an Ontario Professional Incorporation?

The incorporation can easily be completed on a same day basis We believe it is important to ensure your incorporation is in compliance with your governing body prior to completing the incorporation.

What is a NUANS Report?

A NUANS Report is a mandatory 7 page report required when incorporated within most jurisdictions in Canada. It is very important that you order the NUANS report specific to the jurisdiction where incorporating. With an Ontario Professional Incorporation, an Ontario NUANS report is required. The report provides a listing of small businesses, corporations, and trademarks that are similar to the name you wish to incorporate.

A pre-search is commonly completed. This is a search of the proposed business name to see if it is available prior to ordering the 7 page NUANS report. If a name is not available, additional names may be provided.

The pre-search and NUANS report are preselected for you within our incorporation packages.

The NUANS report is provided to the Provincial examiner with Government Services for review and acceptance along with the incorporation documents.

What is the Initial Notice?

The Initial Notice is a single mandatory filing that is due within 60 days after the completion of the incorporation. This document filing verifies the details of the Professional Incorporation along with the provided officer positions for the individuals within the corporation. Most commonly held positions include president, secretary, and treasurer but there are many more positions available. This is an optional item within our incorporation packages, but it is highly recommended. If the Initial Notice is not filed, the Province will cancel the corporation for non-compliance.

What is Required to Complete an Ontario Professional Incorporation?

A regulated professional is required to form an Ontario Professional Corporation. If the business involves a partnership between two or more individuals within the same profession, this is also acceptable.

Information Required for Incorporation:

  • head office address
  • legal names of directors (please provide as listed on photo ID, such as Driver’s Licence)
  • address/es for directors
  • share structure (examples may be available through your governing body)

Within the Articles of Incorporation, Share Structure includes:

Article 5 Set out restrictions, if any, on the business the corporation may carry on or on the powers that the corporation may exercise. If none, state so.
Article 6 Set out the classes and any maximum number of shares that the corporation is authorized to issue. This item should be completed (e.g., unlimited common shares).
Article 7 Set out the rights, privileges, restrictions and conditions (if any) attached to each class of shares and directors authority with respect to any class of shares that may be issued in series.
Article 8 Set out restrictions on issue, transfer or ownership of shares (if any).
Article 9 Set out other provisions (if any).

What is a Tradename?

A tradename is a Master Business Licence (small business) operating under an incorporated company. This may be an option for you if you wish to operate a secondary business name.

Examples:
Smith Dentistry Professional Corporation carrying on business as Smiley White
John A. Smith Medicine Professional Corporation carrying on business as Apple A Day Clinic

Important Things to Know About Tradenames:

  • they do not have name protection for the business name as your corporate name does
  • the registration is attached to your corporation and therefore attached to the same bank account, Revenue Canada, and other tax accounts
  • keeps administration to a minimum with the business operating under the same accounts as your corporation
  • there is no maximum number of tradenames you can register under your corporation
  • limited liability protection as owned by your corporation

Tradenames can be added within your incorporation package with us.

How do I Apply for HST, WSIB, and Payroll?

These accounts can be set up for free by going directly to the government contacts and websites. We provide you with each of these contacts along with many more to assist you as you begin your business.

HST

HST (harmonized sales tax), formerly GST and PST, is mandatory only if your corporation grosses $30,000.00 or more within the same fiscal year. Until this income is met, HST is optional as is the set up of an HST account. As an example, the current tax rate is 13% within the Province of Ontario. When you operate a business and have an HST account, the HST you pay out for business expenses is subtracted from the HST you take in from clients and customers. Each quarter, a tax filing is required to Revenue Canada providing the difference between the two.

Sometimes, it may be beneficial to wait to set up an HST account to offer clients and customers a no tax incentive for your business. Other times, where you have a large number of expenses to set up your business, it may be beneficial to set up an HST account right away.

WSIB

WSIB (workplace safety and insurance board) has been established by the Province of Ontario to protect employees (workers) in the event of injury while on the job. There is also the opportunity for business owners to consider optional insurance available through this program. It is best to contact WSIB directly, providing your specific business practices to see whether or not your employees are required to be covered by the WSIB program, not only to protect your employees but to protect yourself in the event of an injury.

Payroll

Payroll is to be set up whenever you begin employing individuals within your business.

Who Can be a Director of an Ontario Professional Incorporation?

Most Professional Incorporations are restricted to directors who hold the regulated licensing within each profession. Most do not allow spouses, family members, or non-professional investors. Your governing body may assist to provide the specific parameters allowable. If you have filed for bankruptcy previously, it is recommended to contact the trustee who handled the bankruptcy to determine if incorporation is an option within your circumstance.

Why use Ontario Business Central Inc.?

Ontario Business Central Inc. has been assisting individuals to establish incorporations since 1992. We will ensure that you are completely satisfied with the set up of the Professional Incorporation prior to submitting to the Province of Ontario.

We pride ourselves on working with clients to establish their incorporations in a professional manner with dedication to you and your business. The incorporation application is very user friendly. If you need support, we are available Monday through Friday 9:00 am to 5:00 pm to answer any questions.

We offer the following services to assist you in completion of your incorporation:

  • preparation of the Articles of Incorporation in draft (according to your instructions)
  • prescreening the business name for availability
  • obtaining the NUANS Report (7 page printout required by the Province)
  • completion of the Professional Articles of Incorporation (available to you via email)

It is recommended that your governing body be provided a copy of the “draft” incorporation prior to submission with the Province of Ontario to ensure the documents meet all specific requirements.