What is an Ontario Professional Corporation?
An Ontario Professional Corporation (OPC) is a type of business entity that allows certain regulated professionals in Ontario, Canada to incorporate their practice while maintaining limited liability protection. OPCs are governed by specific rules and regulations under the Ontario Business Corporations Act (OBCA) and relevant professional regulatory bodies.
Who can Incorporate?
An Ontario Professional Corporation is designed for individuals who hold professional licenses or certifications in certain regulated fields, such as medicine (physicians), law (lawyers), accounting (chartered accountants), dentistry (dentists), engineering (professional engineers), Social Worker, Nurses, Opticians of Ontario, Massage Therapists and other regulated professions.
What are the benefits of Ontario Corporation?
- One of the primary benefits of forming an Ontario Professional Corporation is limited liability protection. The professional’s personal assets are generally protected from business-related liabilities, debts, and legal claims arising from professional services rendered by the corporation.
- You can easily make changes in your corporation: change the name, change corporation structure, etc.
- Ontario corporations may benefit from certain tax advantages, including the ability to access the small business deduction rate on active business income, which is lower than the general corporate tax rate.
- The corporation can continue to exist even if shareholders change or pass away.
- Corporations may find it easier to raise capital and attract investment compared to sole proprietorships or partnerships. Investors and lenders may be more willing to invest in a corporation due to its limited liability structure and potential for growth.
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 “Professional Corporation” at the end of your name.
- An Ontario NUANS Reservation Report is required to register a Named Corporation.
Step 2. Select your articles of incorporation:
This step establishes the structure of your corporation. Choose the right share structure:
- Basic: one 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
There are three different processing timelines available for Ontario Professional corporations. The standard processing time is ten days. However, for a small additional fee, we can expedite the process and complete it in one business day or even two business hours. 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.
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.
Professional Incorporation Help Section
- Advantages and Disadvantages of Incorporation
- Choosing a Corporate Name
- Establishing an Ontario Professional Corporation
- Professional Colleges and Governing Body Links
- What is Ontario Professional Incorporation?
- How Long Does it Take to Complete an Ontario Professional Incorporation?
- What is a Nuans Report?
Advantages and Disadvantages of Incorporation
Incorporating a business has several advantages and disadvantages that you should consider:
Advantages:
- Limited Liability: Shareholders’ personal assets are protected from business debts and liabilities.
- Tax Benefits: Corporations may qualify for lower tax rates and tax deferrals.
- Increased Credibility: Incorporation can enhance your business’s credibility with customers, suppliers, and investors.
- Access to Capital: Corporations can raise funds through the sale of shares.
- Perpetual Existence: A corporation continues to exist even if the owner leaves or passes away.
Disadvantages:
- Higher Costs: Incorporation involves higher startup costs and ongoing fees.
- Complexity: More paperwork and regulatory compliance are required, including filing annual reports and maintaining corporate records.
- Double Taxation: In some cases, income may be taxed at both the corporate and shareholder levels.
- Less Control: Shareholders have a say in the company’s decisions, which might reduce the owner’s control over the business.
- Regulatory Requirements: Corporations must comply with more stringent regulatory and reporting requirements compared to sole proprietorships.
Choosing a Corporate Name
Choosing a corporate name in Canada is a crucial step when incorporating your business, as it establishes your brand identity and distinguishes your company from others. Here’s how to approach it:
- Unique and Descriptive:
Your corporate name should be unique and not too similar to existing business names. It should also be descriptive, giving potential clients and partners a clear idea of what your business does. This can help with branding and marketing efforts. - Legal Requirements:
In Canada, a corporate name must include a distinctive element, a descriptive element, and a legal ending (e.g., Ltd., Inc., or Corp.). The distinctive element sets your business apart, while the descriptive element explains the nature of the business. - NUANS Search:
Before finalizing your name, conduct a NUANS (Newly Upgraded Automated Name Search) report to ensure that the name you want is available and not too similar to existing names or trademarks. This is a mandatory step in many provinces and for federal incorporation. - Trademark Considerations:
Check if the name is available as a trademark to protect your brand and prevent others from using a similar name. Registering your name as a trademark can offer legal protection across Canada. - Provincial vs. Federal Incorporation:
If you incorporate provincially, your name is protected within that province. For broader protection, federal incorporation provides name protection across Canada, which is beneficial if you plan to operate in multiple provinces.
Choosing the right corporate name is essential for building a strong business identity, ensuring legal compliance, and avoiding conflicts with other businesses. Take your time with this process to ensure your corporate name effectively represents your company and its values.
Establishing an Ontario Professional Corporation
Establishing an Ontario Professional Corporation (PC) represents a unique opportunity for people in the fields of Law, Medicine, Accounting, and Engineering to establish their businesses and have specific advantages while still being regulated by some very strict regulations.
- Eligibility and Restrictions: Only the members of regulated professions, such as doctors, lawyers, or accountants, are able to form a Professional Corporation in Ontario. The professional governing body (e.g., the Law Society of Ontario or the College of Physicians and Surgeons of Ontario) must approve the incorporation.
- Name Requirements: The professional’s name must be included in the name of a Professional Corporation, and the designation “Professional Corporation” shall be used. For instance, “John Doe Medicine Professional Corporation.” This clearly indicates how the corporation’s professional requirements apply.
- Limited Liability: While a Professional Corporation does provide some protection against business liabilities, it still exposes the individual to professional liabilities and they will be personally liable for malpractice or negligence, thus will need to carry appropriate insurance.
- Tax Benefits: Professional Corporations are able to reap the benefits of tax planning similar to other corporations, including the splitting of income and the deferral of taxes. This typically results in substantial savings for high-income professionals.
- Compliance: Professional Corporations operating in Ontario are regulated and monitored through additional legislation. In addition to the basic business and corporations law, they have to adhere to their professional body’s guidelines which outline the make-up and shareholders of the firm; only licensed professionals are permissible shareholders.
- Continuity and Transferability: A Professional Corporation allows continuity for a professional practice which can continue on beyond the retirement or death of an owner. However, ownership will typically be restricted to licensed professionals, limiting share transferability.
Forming an Ontario Professional Corporation provides numerous benefits, such as tax advantages and business continuity, and at the same time ensures that the professional conducts themselves in a manner that is in compliance with the standards set by their respective regulating body. It’s a great choice for professionals who want to structure their practice right.
Professional Colleges and Governing Body Links
Professional Colleges and Governing Bodies in Canada are very important organizations with respect to regulation and monitoring the standards of professional practice, ethics, and competency by its members. The bodies establish rules, guidelines for professionals, offer practicing licenses, and, where applicable, enforce disciplinary actions.
- Role and Responsibilities: Professional Colleges and Governing Bodies protect the public interest by ensuring that only properly qualified persons can practice in their respective fields. They establish educational requirements, examinations, and issue certifications or licenses. They continue to provide professional growth and keep an ethical code of conduct that a member must follow.
- Sample Professional Bodies:
– Law Society of Ontario: Regulates the lawyers and paralegals in the province, sets out standards for professional competence, and professional conduct.
– College of Physicians and Surgeons of Ontario (CPSO): Governs the practice of medicine in Ontario, setting standards of practice for doctors and care for patients.
– CPA Ontario: Regulates accountants and offers certification, education, and disciplinary oversight. - Access to Resources and Information: Most have websites, which can be quite resourceful for professionals and the general public alike; these frequently provide services on licensing, continuing education, professional standards, and a list of licensed professionals. They also offer guidance about how to go through complaints or access support services.
- Importance of Compliance: It is incumbent upon professionals to continuously register with these professional bodies and adhere to their rules and regulations in order to practice their profession legally; otherwise, penalties may be imposed, such as suspension or revocation of the license to practice. This makes the vital information easily accessible by members of the public, as well as professionals, by linking directly to the websites of such professional colleges and governing bodies. In this way, transparency and trust are assured in professional services offered throughout Canada.
History of Ontario Professional Incorporation
The history of professional incorporation is that evolution of a legal and regulatory framework through which some professionals could enjoy the benefits of incorporation while remaining subject to its obligations and ethical standards as independent professionals in Ontario.
History: At the outset, professional incorporation was not allowed in Ontario. The traditional way of practicing the professions of law, medicine, accounting, and engineering was to be either a sole proprietor or a partner with other individuals. The idea was that the professionals, who held significant responsibilities both to their clients and to the public, had to continue being personally responsible for their actions and decisions.
Introduction of Professional Corporations: Due to the changing nature of business, professional gains, and tax advantages with the liability protection, at the end of the 1990s and the beginning of the new millennium, realization grew. However, they had to be counterbalanced with the maintenance of professional accountability.
In response, Ontario permitted the incorporation of Professional Corporations (PCs) for many regulated professions through amendments in its legislation. Thus, professionals were able to incorporate their practices but still remained personally liable for professional misconduct or negligence.
Regulatory Oversight: Following the implementation of Professional Incorporation, the regulatory bodies, like the Law Society of Ontario and the College of Physicians and Surgeons of Ontario, as well as other professional colleges, developed unique rules and guidelines to define the process of incorporation, thereby holding firm on maintaining the integrity and accountability of the profession. For example, only those licensed to practice the profession may be shareholders in the Professional Corporation, and the name under which the corporation does business must identify the professional character of the business.
Continuous Evolution: The structure of Professional Corporations has been evolving through the years as amendments in both legislation and regulations were made reflecting any developments taking place within the professional and business environment. Today, Professional Corporations are a well-entrenched option exercised by many professionals in Ontario, which allows for balancing between the advantages of incorporation and the need for professional accountability.
The history of Ontario Professional Incorporation is the fact that in this province, there is a dedication to providing the possibility of professionals structuring practices so that they can facilitate financial and business growth while maintaining the high standards for their areas of practice.
How Long Does it Take to Complete an Ontario Professional Incorporation?
On the one hand, it will vary because of various factors, and most likely, it takes anywhere between 1 to 4 weeks to complete an Ontario professional incorporation. The breakdown is as follows:
- 2 weeks preparing the documents:
Consultation: The step involves consultation with legal or professional advisors for the purpose of explaining all the requirements.
Professional Regulatory Body Approval: For instance, from the Law Society of Ontario or the College of Physicians and Surgeons of Ontario, you will need to get professional regulatory body approval prior to incorporation. It is time-consuming in that it all depends on how fast your application is processed. - Name Approval and NUANS Report (1-3 Days):
Name Search and Reservation: One will obtain the relevant NUANS Report to confirm that the name of the corporation chosen does not match another corporation’s name and is unique in its form. This report should take a day or two to get.
Name Approval: Following selection, a name must be submitted for the approval process by the regulating body, commonly taking a couple of days. - Submitting the documents for incorporation (1-3 days):
Document Preparation: One needs to prepare incorporation documents, like the Articles of Incorporation. This step can be done relatively quickly if all information is ready.
File with Ontario Ministry of Government and Consumer Services: Once you have prepared your incorporation documents, you will file them with the Ontario government. Upon filing, you can complete the process within a few days, especially if it is being done online. - Receipt of Certificate of Incorporation (1-3 Days):
Upon filing, the Ontario government issues the Certificate of Incorporation, which officially recognizes the Professional Corporation—usually within a few days after the documents are filed.
Total Estimated Time: 1-4 weeks. If all things are done in prior preparation and if there are no delays in getting the approvals, then the total time can be reduced. However, it can take longer if there are problems during document preparation and name approval or if the regulatory body takes a long period to peruse and approve your application. You may wish to retain professional services, such as Online Business Registry, to assist you with this process and shorten the number of days it may take to complete incorporation.
What is a Nuans Report?
A NUANS Report is a document that provides a comprehensive search of existing business names, trademarks, and incorporated companies across Canada. This search is essential when you want to incorporate a new business or register a new name to ensure that your chosen name is unique and not already in use. The report helps prevent potential legal issues by identifying any conflicts with existing names.
In many provinces, including Ontario, a NUANS Report is required as part of the incorporation process. It provides a list of similar names, allowing you to make an informed decision on whether your desired name is available. Once you obtain the report, you can proceed with registering your business name or incorporating your company, knowing that your name is legally protected.
If you need assistance with obtaining a NUANS Report or have more questions about the process, our team at Online Business Registry can guide you through it efficiently.
What is the Initial Notice?
The Initial Notice is a mandatory filing, due from all newly incorporated Ontario Corporations and filed with the province. The notice informs the Ontario Ministry of Government and Consumer Services about various details of the newly created corporation, such as its registered office address and the names and addresses of its directors.
Purpose of Initial Notice: The Notice to File is also important in that it keeps the government informed of the structure and location of the corporation. This enables the government to identify which businesses are under operation within the province, making record updates vital for regulation and litigation.
Application for Bail: The Initial Notice shall be filed within 60 days upon incorporation. Any failure to file the notice on time may result in penalties or other legal issues.
Contents of the Initial Notice: The notice will generally provide for:
– The legal name of the corporation.
– Registered office address.
– The directors of the corporation, with their names and addresses.
– Information on any change in the board of directors or the registered office, if any.
How to Register: The Initial Notice may be filed on the Ontario Business Registry website, by delivery to, or by mail to, the office of the registrar. In most cases, businesses will choose to file their notice professionally with an organization such as Online Business Registry to ensure it is properly filed and remains in full legal compliance.
The Initial Notice is a crucial step in the incorporation process in Ontario. It signals the formal start of legal existence for your corporation.
What is Required to Complete an Ontario Professional Incorporation?
An Ontario Professional Incorporation is one that has a couple of specific steps and quite a few requirements that are attuned to professionals, including doctors, lawyers, accountants, and engineers. This is generally what is required:
- Eligibility: Only members in good standing with the respective regulatory or professional bodies are eligible to incorporate as a Professional Corporation in Ontario. For example, a Medical Professional Corporation cannot be formed unless an individual is registered by the College of Physicians and Surgeons of Ontario.
- Regulatory Body Approval: Before incorporating, you need to obtain written consent to proceed from your regulating board of profession. This is important in confirming that your corporation is totally within the professional standards and regulations of operation stipulated by the regulatory body.
- Naming the Corporation: The corporate name should include the name of the professional, the professional’s profession, and the designation “Professional Corporation.” (E.g., “Jane Doe Medicine Professional Corporation”). This name must be approved by the governing body and must conform to the naming conventions as outlined in Ontario’s Business Corporations Act.
- Articles of Incorporation: You are required to draft and file the Articles of Incorporation, which outline the basic framework for your corporation. The articles should be consistent with the requirements of the Ontario Business Corporations Act and those of your professional association.
- Obtain a NUANS Report: A NUANS (Newly Upgraded Automated Name Search) report must be completed to ensure that the corporate name chosen is not already in use by others. This is a necessary step so that no business should have to face conflicts regarding their corporation name.
- Filing the Incorporation Documents: With your NUANS report in your hand, and approval of your name from the regulatory body, you can now file the Articles of Incorporation with the Ontario Ministry of Government and Consumer Services. This is a formal filing that establishes your Professional Corporation legally.
- First Notice and Other Filings: After you register, you will need to file the Initial Notice to the government, which includes providing the names of the individuals who will be the corporation’s directors and the location of the registered office. There may also be business licenses, GST/HST, and WSIB coverage registration depending upon how your business is being operated.
- Continuous Compliance: Once you have been incorporated, you are further expected to observe not only the corporate law but also your professional body’s specific rules. This would involve the filing of annual returns, keeping up-to-date corporate records, and maintaining that all shareholders in the corporation are licensed professionals.
Incorporating an Ontario Professional Corporation is a very detailed process and requires proper observance of legal and professional requirements. You should be able to set up a Professional Corporation supporting your practice properly with these steps.
What is a Tradename?
A tradename, also sometimes referred to as a business name, is the name that a business operates under and presents to the public. It is the name the clients or customers recognize and associate with the business—different from the legal name of the entity, such as the name of the corporation or sole proprietorship.
Purpose of the Tradename: The primary use of the tradename includes branding and marketing; basically, it is what is used in day-to-day business operations. It helps in establishing a clear identity about the business, which can be remembered easily by the customers or through referral. For instance, a corporation that uses a tradename for operating is 123456 Ontario Inc., but its tradename is “Sunny Days Childcare.”
Registration of a Tradename: In Canada, the business owner would generally register the name used for business other than its personal name with the appropriate provincial or territorial authority. This serves to hold the name and ensure no other business can operate under that or a very similar name in the jurisdiction.
Legal Considerations: Although registering a tradename provides some protection, it is not equivalent to a trademark. A tradename doesn’t prevent others from using the same name in another region or another industry unless it’s been trademarked. In such a case where the business owner is concerned with much broader protection across Canada, they might want to trademark the name.
Usage: The tradename can be used on business signage, business cards, advertisements, and other public uses. It is what reflects the way in which a business is recognized in the marketplace and is key to the branding strategy of a business.
Understanding and proper registration of a tradename is a vital point to any business owner willing to set up a strong and well-recognized brand identity.
How do I Apply for HST, WSIB, and Payroll?
Registering for HST (Harmonized Sales Tax), WSIB (Workplace Safety and Insurance Board), and Payroll accounts are important for businesses in Ontario, Canada. Here’s how:
- Harmonized Sales Tax:
When It’s Needed: You must enroll in an HST account when taxable sales of your business exceed $30,000 in any calendar year. Even if your sales are below this level, voluntary registration would be fruitful for the inclusion of input tax credit.
How to Apply:
– You can register online for an HST account by registering through the CRA Business Registration Online system.
– Or you can register by mail or telephone by completing Form RC1, “Request for a Business Number (BN).”
– Upon registration, you will get a Business Number (BN) and an HST account number that you would use to collect and remit HST. - Applying for WSIB (Workplace Safety and Insurance Board):
When Required: It is mandatory that if you have workers or you are a contractor in an at-risk line of work, you have to get registered with WSIB within 10 days from hiring the first worker. The WSIB is the entity that compensates for those injuries or diseases caused by the workplace.
How to Apply:
– You may register online at the WSIB website by creating an account and submitting a registration form.
– Some of the details that you will be required to provide in this case are your Business Number (BN), details of business operations, and the number of employees.
– The WSIB will then send you an account number along with the information on premium rates. - Payroll Account: Enroll in Payroll Deductions:
When Required: When you have employees, you need to open a payroll account so you can remit the income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums deducted from your employees’ pay.
How to Apply:
– You may apply for a payroll account using the CRA Business Registration Online portal
– You can also register by telephone or by mail using Form RC1, “Request for a Business Number (BN).” Upon registration, you will be assigned a payroll account number that identifies your account when remitting payroll deductions to the CRA.
After Registration: After registering for HST, WSIB, and Payroll accounts, one must be sure to stay compliant by filing returns, remitting payments, and keeping accurate records. Each of these accounts has specific deadlines and reporting requirements that must be adhered to in order to avoid penalties. It is easy to apply for any of these accounts and ensures that your business operates legally and responsibly in Ontario. Services such as Online Business Registry can help you with the application process.
Who Can be a Director of an Ontario Professional Incorporation?
Being a director in an Ontario Professional Incorporation is an important office and there are requirements that must be met. Here’s who can be a director:
Eligibility Criteria:
- Licensed Member: To be a director of an Ontario Professional Corporation, you must be a licensed member in good standing with the governing body of the profession for which the corporation is being established. For instance, if the corporation is for a medical practice, then all directors must be licensed physicians recognized by the College of Physicians and Surgeons of Ontario.
- Residency Requirement: The corporation must have at least 25% of its directors as Canadian residents. Where the number of directors falls below four, a corporation must have a minimum of one director who is a Canadian resident. This way, the corporation retains some connection with Canada.
- Membership in the Same Profession: All the directors of a Professional Corporation have to be members of the same profession. This condition ensures that the governance of the corporation is subject to standards and laws specific to the given profession.
- Good Standing: Directors must be licensed and in good standing with their professional body—meaning not having been disciplined or restricted in a way that impedes the ability to continue with the director’s mandate.
Responsibilities:
The directors are the overall managers of the business and affairs of the corporation, responsible for corporate law and any special regulations established by the professional body in which they are members. The directors shall act in the best interest of the corporation, with ethical and professional standards observed in their profession.
Limitations: Since Professional Corporations are established to do the work of a specific profession, only professionals belonging to that profession can hold directorship in those corporations. The restriction is intended to maintain the professional character and focus of the corporation.
In short, the directors of an Ontario Professional Corporation have to be licensed professionals in good standing and must meet the residency and professional requirements stipulated by both corporate law and their respective governing bodies.
Why Use Online Business Registry?
Using an online business registry, like the one offered on your website, provides several advantages for individuals and businesses looking to register or manage their business in Ontario:
Convenience and Efficiency: The online business registry allows users to complete business registration, renewals, and other filings quickly from anywhere with internet access, eliminating the need to visit a physical office.
Time-Saving: Online registration is typically faster than traditional methods, reducing the time required to process applications and receive approvals.
24/7 Access: Users can access the registry at any time, making it easier to manage their business on their own schedule, without being constrained by office hours.
Cost-Effective: Online services often reduce the costs associated with paperwork, mail, and in-person visits. It can also help in reducing potential errors, which might otherwise incur additional costs.
Security and Accuracy: The online registry provides a secure platform for submitting and managing documents, with systems in place to ensure accuracy and compliance with regulations.
Real-Time Updates: Users can receive instant confirmations and updates on the status of their registrations or filings, helping them stay informed and make timely decisions.
Support and Guidance: Online platforms often provide resources, guides, and customer support to help users navigate the registration process more easily.
