What is a Holding Company?
A Holding Company, also known as a parent company, is a type of corporation that exists primarily to own and control other companies, known as subsidiaries. The primary purpose of a holding company is to manage a group of subsidiary businesses either through direct ownership or through controlling interest in their shares.
What are the benefits of incorporating a Holding Company?
Holding companies can provide a layer of protection between the assets of the operating companies (subsidiaries) and external liabilities. This structure can help limit the liability exposure of the holding company to the assets it owns. Holding assets within a holding company safeguards them from creditors, especially if something happens to the operating company.
In certain situations, corporations enjoy lower tax rates than individuals. Holding investments in a corporation can lead to tax savings. Holding companies allow flexibility in income timing, enabling tax deferral.
Who can start a Holding Company in Ontario?
- One more individuals above the age of 18;
- Needs to have a physical address in Ontario. If you don’t have a local provincial address, we provide registered address and mail scanning service.
- No residency requirement.
What are the incorporation steps?
Step 1. Name your corporation.
Choose if you want a numbered or a named corporation:
- A numbered name is the simplest way to name your corporation because the government assigns the number (for example, 12345678 Ontario Inc.).
- Your company can be named and have a unique name that sets you apart from your competition.
- Please include the legal suffix like Inc./Ltd./Corp. at the end of your name.
- An Ontario NUANS Reservation Report is required to register a Named Corporation. You can obtain a NUANS Report here.
Step 2. Select your articles of incorporation:
This step establishes the structure of your corporation. Choose the right share structure:
- Basic: with unlimited common shares with no specific share class.
- Standard: common shares with class A voting and class B non-voting.
- Custom: this share structure allows to categorize shares into many types such as common, preferred, voting, non-voting etc.
Step 3. Establish the office address.
- Registered office address must be a physical address in Ontario.
- Mailing address can be a P.O. BOX.
- You are allowed to have a legal land description address too but must have a P.O. Box connected to it.
- If you don’t have a local provincial address, we provide registered address and mail scanning service.
Step 4. Decide who will be a director, shareholder, officer and Incorporator.
Director – is the head of the corporation. You can add up to 10 directors.
Shareholder – owns the corporation and receives profit from the business as dividends and shares.
Officer – is anybody including an employee, no decision making power.
Incorporator – is the person under whose authority the corporation is created. Is not changeable.
Mandatory items to run a business.
- Minute book: consists of bylaws, share structure, minutes & other legal sections. Without it, a corporation is not complete.
- Initial Return: It’s a mandatory filing with Service Ontario for each new corporation. It has to be filed within 60 days of Incorporation. It confirms the details of the corporation. It is not a tax filing with CRA.
- Business Number: It is a unique identification of your business with the Canada Revenue Agency. It is required to register accounts like GST/HST, Payroll, Import/Export accounts.
- Corporate Tax ID: It is like a SIN number for a corporation.
- HST Registration, Harmonized Sales Tax: If you are selling goods and collecting HST you must have an HST account. every time a business incurs an expense – be it rent or paying for goods – it pays HST, if you set up the account, you can claim it back.
- Payroll Account: If you have employees, including yourself, you must set up a payroll account.
- Import/Export: If your goods or raw materials cross the Canadian border, you are required to clear customs using the Import/Export account.
- WSIB Account: It’s the Workplace Safety and Insurance Board registration. If your corporation has employees (except directors and shareholders) you must register for WSIB.
- Annual Return: A corporation must file its Annual Return with the Government every year to keep it active. You may add Annual Return to your package to avoid the risk of forgetting it. We will take care of it!
You can find out more information about annual return here:
How do we process the order?
- We start by verifying the payment and reviewing the order to ensure an error-free application.
- For named companies, we conduct name searches, make reservations, and obtain name approval.
- Next, we prepare the application and articles of incorporation.
- Before registering the corporation, we send a draft for a final check.
- Once approved, we register the corporation according to the chosen queue and promptly email all registration documents to the customer.
- Finally, we complete any additional services included in the package, such as initial returns and CRA accounts.
Timeline
The standard incorporation time for a Holding Company is one business day. However, for an additional fee, we can expedite the process and complete it within just two business hours. Please be aware that the turnaround time is until 3 p.m. EST. The processing queue includes Incorporation and Emailing the Certificate, Articles and Electronic Minute Book (if included). The remaining processes in this package like Business Number, CRA programs accounts set up, WSIB registration, etc. are initiated after incorporation processes.
What will you receive?
After the registration is completed we will send you a Certificate and Articles of Incorporation and an Electronic Minute Book (if included) by an email.
Why choose us?
- Our online form offers the option to select, customize, and build your bundle according to your preferences.
- Simply complete the straightforward form on our website, and we’ll handle the rest.
- With a wealth of experience in business incorporation, we pride ourselves on guiding entrepreneurs through the process with expertise and precision.
- Online Business Registry is an official intermediary for Ontario Province and a registered member of Corporations Canada.
- Our online form offers the option to select, customize, and build your bundle according to your preferences.
- Simply complete the straightforward form on our website, and we’ll handle the rest.
- With a wealth of experience in business incorporation, we pride ourselves on guiding entrepreneurs through the process with expertise and precision.
