The costs of incorporation and operating a corporation in Canada

[@MarkMark-xz4ff]

Thanks for taking the time to make these informative videos. At 6:23 what is “tax reporting”? Is that an extra cost to file taxes? If I use quick books and do my own accounting do I still pay this “reporting” cost?

[@kaushikjjj]

+1 I have the same question

[@Dangerzone1203]

I have the same question too

[@YasAbdolmaleki]

Excellent videos! Your content is brief but comprehensive as always. Your videos are helping a lot of people.

[@businessincanada-doitright1822]

Thank you for your warm response.

[@SonicSinema]

As a newly incorporated business, what is a good general rule of thumb when it comes to % of revenue to set aside for year end tax?

[@fredericouimet4851]

Great video! Do the corporate tax returns always cost as much as 1000$ - 3000$? Let's say that all that my company does is to sell some products online, (no employees,

[@kaushikjjj]

+1

[@Gul_Jee]

Excellent.... very informative video as always. Please keep up the phenomenal job.

[@businessincanada-doitright1822]

Thanks. Having 3 more being processed.

[@judithsarazin6102]

At minimum do we not have to also pay monthly recurring charges like business email, business bank account, cell phone etc. I understand that any hardware we purchase to run our business or furniture to setup an office, we must accrue those charges yearly.

[@businessincanada-doitright1822]

Well, that is correct. But as my general Channel says, I mostly concentrate on legal and administrative costs, not the cost of operations. You can also add the cost of purchasing of materials, inventory, employment and much more. It just that this wasn't the purpose of the video, but only to describe the legal and maintenance costs for the corporation. And yes you're correct, every expense that the business incurres should be properly recorded and calculated for the tax purposes in the future, even if the business at the moment does not make money.

[@judithsarazin6102]

@@businessincanada-doitright1822 Good good - sorry, I asked this question at the start of my journey.

[@businessincanada-doitright1822]

No problem, overall this is a valid question, especially at the beginning of the journey. Good luck with your business!

[@DStripeM]

Very helpful. And everything was precise and very well spoken. Thank you for this video. It will help me alot to rebuild the Economie of Canada.

[@bukkahub5985]

This is very informative Eugene. If you are operating an online business, does it mean you may have to get an accountant immediately if you envisage multiple transactions per day on your website? Thank you

[@noekeever2644]

It's arguably better to wait until your sales get up to speed. You should just keep records of the transactions. I would personally wait until I had at least 4-5 transactions per day or 100 monthly transactions. There are tons of freelancers in every city that can do your bookkeeping as long as you provide the records. Then, when you need to file your taxes you can talk to an accountant to get informed about legal ways to reduce the amount payable to CRA.

[@businessincanada-doitright1822]

Echioma, I agree with the answer of Noe below, but would add one additional consideration - while operating your business online, you might have an online bookkeeping system taking care of most of your revenues and expenses (either proprietary like QuickBooks ), or provided by your e-commerce platform. This will even further reduce the need for a bookkeeper as long as you can manage these records on your own.

[@waveume4217]

This was extremely helpful. I wanted these information for my school project. You are awesome. Thank you.

[@KevinKowalchuk]

Is the business number the same as a GST number?

[@businessincanada-doitright1822]

Kevin, yes and no... Business number that you receive upon incorporating is not a GST number, BUT, it consists of 9 digits, RC and 001, so - 123456789 RC 0001. In order to apply for a GST/HST registration, you have to contact CRA or do it online. They will issue you the number, but it will be the same combination of 123456789 then RT 0001. So the numbers are the same, the program indicators are different.

[@coreyseale5476]

Excellent video, very informative and easy to understand. Thank you very much.

[@paulgandhi9350]

Do you know the process for dissolving an incorporation...?

[@thehowtos4genzmillennials745]

Hi Did you happen to get your answer? I am also looking to know.

[@MaximKrol]

A very informative video! Thank you!

[@vivianhu6998]

Very informative and your video has benefited a lot of people. One question on the cost: if I set up one corporation initially then several years late decide to add a holding company above it, how much would it cost to roll it under a holding company, assuming the initial company is just a passive real estate investment Corp. Thank you very much!

[@businessincanada-doitright1822]

Vivan, the creation of a holding structure by itself, without tax planning, may cost anywhere between $1,500 and $3,000. I would say the ballpark of $2,000 is a reasonable price. But, as they say, the devil is in the details - once you get into the tax planning and financial strategy for both entities, it might become trickier and get to $5,000 and even more. All is subject to the complexity of the deal. Now, although you did not ask about it, there is a difference between 'passive' RE company that only holds assets and RE company that also rents out the assets to tenants. In thhe second case, I would suggest to create the holding structure from the very outset.

[@nerd2hero313]

Thanks for the informative information. If I decided to incorporate and shelve the company for a couple of years just to hold the name. Is the only thing I need to pay is the cost of maintenance ?

[@businessincanada-doitright1822]

Nerd2Hero, this is basically correct - once incorporates, you have to file annual tax returns, in your case it would be $0 returns. Should not be too complicated and expensive.

[@nerd2hero313]

@@businessincanada-doitright1822 Wow, thanks for the quick reply. I have been watching most of your videos (very inspiring). Is it smart to also create a Holding company and shelve it also? I have many questions and would like to be educated on these matters. I live in Vancouver B.C. do you have any contacts I can sit down with and pick their mind?

[@Samuelmiele]

Do I have to register my business federally and then in Ontario? Can I just register in Ontario as I don't plan on doing any business federally?

[@SpanishCorriente]

Great information, Thanks! 👍🏼

[@desireahlascelles8349]

Corporations Canada only 200$. 12$ a year to keep it active.

[@noekeever2644]

Useful information. Question: If I incorporate a small company with me as the only owner & Director and one office. Can I just use the templates for the articles of incorporation, registered offices and board of directors provided by the Government, and save the fees for: -By-law articles -Registries of shareholders and offices -Resolutions, etc. ? I would think when my company grows and if I decide to bring shareholders on board, I would amend the registries, and then it would make sense to pay $1000-$1500 to have them made properly by a Lawyer. Please let me know if this makes sense. Thanks!

[@princessmarro]

I have the same Question, do you recommend to just pay the $200 for fed incorp and use the templates, and then go to a lawyer afterwards once my company sees growth?

[@businessincanada-doitright1822]

Noe, overall that is correct. That being said, you should keep in mind that the only document you actually get upon registration is your Articles of Incorporation. So when bringing new partners, applying for financing and investments, you will have to create all the missing documents, and sometimes in an urgent manner (within a day or two). In this situation, the costs could be higher than what you expect.

[@SovereignHumanBeingX]

I need help along these lines as well. What kind of templates would suffice in the first steps? If anyone could link to some reading.

[@qamarcpa]

Amazing videos and great stuff,, to the point, and very useful. I have watched almost all of your videos and loved all :)

[@kck5021]

Very informative! Thank you! I do have a question if I may - I want to incorporate a federal basic corporation but I am going to be established based out of either New Brunswick or Nova Scotia. Thankfully, the extra provincial cost will cover for both these provinces thanks to an agreement between these two provinces. My question is that I plan to provide services to people who are living in PEI and Newfoundland & Labrador additional to NB and NS, however, I will still only always be operating out of my office in NB or NS only. Do I need to still register for extra provincial incorporation in PEI and NFLD, even if I’m not establishing business there other than providing services to clients there?

[@businessincanada-doitright1822]

Ariane, the way I understand the provisions of extra-provincial registration, is that you have to register in the provinces where you have some sort of actual business operations - office, distribution, employees and agents and more. In your case, I think we can reasonably and safely determine that since you are located in NB and operate from NB, you do not have to register in PEI and NL. Please keep in mind that this kind of registration will make your tax reporting more complicated and costly - another reason to avoid it.

[@aarondamian9307]

Hello, very informative! I have a question for my sister who lives in Canada ( Ontario). She established a seller account on Amazon as a seller (just created an account) . Now what kind of documents she would have to obtain to carry on business on Amazon. Does she need to incorporate a federal basic corporation etc...?

[@businessincanada-doitright1822]

Aaron, overall, to operate a small business, she does not HAVE to incorporate, but she might WANT to. With amazon and cross border sales, I think that Federal incorporation makes a better sense, especially if she is in Ontario (then it''s the cheapest way to incorporate). She also should keep in mind that upon reaching 30K of SALES, she should register for the HST (and might even want to do so earlier, see my video about it as well). good luck.

[@truthseeker712]

Thank you very much, sir!! Appreciate the info you provide us!

[@marcfreeeman]

Thanks for the good content

[@yashjotkairon1421]

The video was very informative thankyou. I have multiple questions to ask, 1) The procedure for setting up an import export company is just like any other company? and what is the difference if a foreigner is setting up the company? Also do I need to register under all the provinces as the sales of the product are going to be throughout the country or just the province in which i will be situated?

[@canelita4596]

Hi there! thanks for the great video. I have a question. If you are incorporated and you are the only director and shareholder, do you still have to fill the laws and register part you mentioned?

[@codyyoung6068]

Awesome content. Thank you.

[@thehowtos4genzmillennials745]

What is the process in dissolving an incorporation and what are the costs? Also are there any type of consequences after dissolving?

[@businessincanada-doitright1822]

Geovanni, the process of dissolution includes 3 major steps: 1. internal resolutions to dissolve the corporation 2. application for the CRA for consent to dissolve (this is where all the problems start :-) ) 3. submission of the dissolution application to the registrar. There are no particular consequences for dissolving the corporation, but you should keep in mind that once the request for consent is being submitted with the CRA, the chance for audit significantly increases... :-)

[@ericmohotoo8326]

Hello, great video. I appreciate all the information you provide us. I had a question. How do you register a name under a corporation that is numbered.

[@businessincanada-doitright1822]

Eric, there is a process for registering a name for the numbered corporation, or any other corporation (if you plan to operate under the name other than the registered one). The process is a bit different from one province to another, but it's a relatively simple one. In Ontario it's called Mater Business License (MBL), use the link below to start the process. The fees are 60 dollars. Good luck... www.ibsa.serviceontario.ca/ibsa/servlet/com.visionmax.servlet.CommandServlet?command=screenflownoscript&screenid=26&_ga=2.11896246.328412158.1599054817-121291508.1599054817

[@ericmohotoo8326]

Hello, Thank you for your help. Keep up the good work.

[@vivianhu6998]

very helpful! I took notes!

[@marlonpretto5497]

Do you run a business? I’m trying to get some real life mentors, I want to own an energy company one day.

[@MikeSauss]

There's an option to do basic incorporation and custom incorporation. I don't have a set name for it yet, if I choose basic and they give me a generic name, would I be able to change it afterwards?

[@businessincanada-doitright1822]

Kai, they will not assign you "a generic name", they will issue a numbered corporation. There are two options to deal with it later on: 1. to rename a corporation and give it the name you want - it will cost the same as to incorporate a new corporation. 2. to register a business name under your numbered corporation. this will cost a fraction of the incorporation costs...

[@MikeSauss]

@@businessincanada-doitright1822 Thank you so much for answering more than I asked!! Very helpful information!. I was also wondering about #2, and if I was able to have multiple companies in this building formation, and you just answered it :)

[@brennonatchison5050]

Thank you for the video very informative. Do you know if I would have to be a fully licensed plumber in Ontario to start a plumbing business? I do side work after hours from my plumbing job as an apprentice and want to legalize my business. Thank you for your videos. They clear up a lot of questions I have about business

[@businessincanada-doitright1822]

Brennon, I would not know for sure, but I think that plumbers are a regulated trade in Ontario, which means you need to be licensed or certified in order to legally offer your services. You have to investigate it with Ontario govt to see what are the conditions for it.

[@Entertainment_Chilli]

Can you suggest me which business can be more profitable in Canada ? I want to start my own Cosmetic company.... Will it be beneficial ? & Thanks for your great generosity 💯👍,,, Your support helps me to take further decision 💯👍

[@dr.samirshaikh3363]

Very informative video. Thank you so much. I had a question. Who does incorporation lawyer or accountant?

[@businessincanada-doitright1822]

Dr. Samir, you can also do it yourself if you know what to do. In my personal experience, lawyers will create a better set of documents, they will usually include all the necessary resolutions and registries and by-laws, but would cost significantly more (unjustifiably so) than any other option. Of all the corporations that were opened by accountants, I rarely see properly registered corporations with all the documents prepared as required by the law. Alternatively, you can retain our company - CBES to register your corporation. We will prepare all the required resolutions and registries at a better price. Overall, if you will end up paying for your corporation more than $1,500 - $1,700 fees including - you have overpaid...

[@dr.samirshaikh3363]

@@businessincanada-doitright1822 how much your corporation charge?? I am on work permit and i know i need one Canadian director. My question is does director needs to be my partner or does he needs to hold some portion in my company?? Thank you

[@businessincanada-doitright1822]

@@dr.samirshaikh3363 Hi, no a director is not required to be your partner, and can be without any shares issued to him/her. Depending on the complexity of the incorporation, my company charges 1000 - 1300 for incorporation for Canadian residents. It is usually more expensive for overseas incorporators... please send me an email to [e-mail] and we can discuss the price and other conditions.

[@dr.samirshaikh3363]

@@businessincanada-doitright1822 thank you so much. Will be in touch with you

[@dr.samirshaikh3363]

@@businessincanada-doitright1822 by any chance do you know how much in general does it cost for phase 1 &2 environmental report?

[@mindylamont]

Hi! Really loving your content! I just wish I had looked at it sooner :-). I just incorporated in Alberta and then did a federal incorporation. It looks like I should have created the fed corp and then registered an extraprovincial corp in Alberta. What's the best option for fixing this?

[@businessincanada-doitright1822]

HI Mindy. I am afraid that there is no solution to this situation. In case you've registered 2 separate corporations, the only way to get rid of one of them is to close it (dissolve - I am actually filming a video for this particular topic). BUT! On the other hand, if you already have 2 corporations registered, you might want to consider operating one as you've planned (the Federal one priceeding with the extra-provincial corporation), and keeping the second one for the future development - either to separate a future project into a separate corporation (once it proves itself feasible), or to use it in the future as your holding company (you can see my video about it on the channel). Should your business succeed (which I wholeheartedly wish you), you will anyway need a holding company. You can discuss with your corporate accountant and agree that you will give him/her you main business, if she/he will include the costs of $0 tax return for the second company in the total cost. This way, when you will need it - you will have a mature corporation with existing history. So it's up to you to decide which route is best for you. Anyway - good luck with your business.

[@mindylamont]

@@businessincanada-doitright1822 Thanks for your reply! I am keeping it as a hold co as you suggest :-). It sure was interesting learning at the end of the day!

[@bigroutes9712]

Thank you for the details, I really don't see a huge difference in the way we set the companies or businesses here in India to the way it works in Canada. I am looking forward to set up my business which is into "travel, tourism and logistics" both in Canada and USA. Obviously, Toronto Canada Ontario is where I would like to start off with in Canada. I would like to get some doubts clarified...kindly share your contact details so that I can write an email to you and see how we can take this matter forward.

[@businessincanada-doitright1822]

Hi Big Routes. [e-mail] is the email. 647-569-2377 is the phone number. talk to you soon.

[@anantadhyankendra4912]

I'm from India and want to incorporate in canada.....what would be the procedure? We want to open an account on eBay and Amazon for cross border business, we are also doing same business from India

[@christisgodd]

Someone should budget ten thousand annually

[@businessincanada-doitright1822]

Well, this is a very common misconception and the purpose of this video - if comparing operations of a business through corporation or through sole proprietorship, the difference will be negligible (on a business scale of comparison). Thinking that you need tens of thousands of dollars to operate a corporation drives many entrepreneurs to stay with SP rather than incorporate, which results in huge personal losses and damages in many situations.