Creating a Canadian incorporation to hold a property involves several steps. You can hire a lawyer, accountant or do-it-yourself to create an incorporation in Canada to hold a property.
Regardless who is doing the actual registration of the corporation, here’s an overview of the process:
- Choose a name for your corporation or use a number company: If you want to pick a name for your corporation, it must be unique and cannot be the same as or similar to the name of an existing corporation. You can search for existing corporation names on the Corporations Canada website. If you opt in to use a numbered company, then it will be automatically generated for you.
- Choose the jurisdiction of incorporation: You can incorporate your corporation in the province or territory where you will be operating the property. Each province and territory has its own set of regulations for incorporation, so it’s important to research and choose the one that best suits your needs. For example, if you live in Ontario, you can choose Ontario as your jurisdiction for the corporation. Optionally, you can also create a Federal Incorporation. The difference between an Ontario incorporation vs a Federal incorporated is that a Federal corporation is publicly searchable which allows anyone to see the name of the directors and officers of the corporation.
- Choose the directors and officers: You will need to appoint at least one director and one officer for your corporation. Directors are responsible for overseeing the management of the corporation, while officers are responsible for the day-to-day operations.
- Prepare and file the Articles of Incorporation: The Articles of Incorporation are the legal documents that create your corporation. They include information such as the name and type of corporation, the number of shares, and the directors and officers. You will need to file the Articles of Incorporation with the appropriate government agency. If you are using the do-it-yourself website to create a corporation, it typically has a default article of incorporation. If you are creating a simple corporation with yourself as the sole owner and director, the default article of incorporation could be sufficient.
- Obtain a Business Number and register for taxes: Once your corporation is incorporated, you will need to obtain a Business Number and register for taxes with the Canada Revenue Agency (CRA). This includes registering for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) and the Payroll Deductions Program (if you have employees). HST is optional if your annual revenue is under $30K.
- Open a corporate bank account: You will need to open a separate bank account for your corporation to keep your personal finances separate from your business finances.
It’s important to consult with a lawyer or accountant to ensure that you follow all the necessary steps and comply with all the legal and tax requirements when incorporating a company to hold a property.