General Guidelines for a Newly Incorporate company

Guidelines

GENERAL GUIDELINES FOR A NEWLY INCORPORATED COMPANY

Make sure to have all of this information to have a smooth incorporation.

1. I have received my Incorporation Documents

Please ensure that you’ve received both your Incorporation Articles and Certificate. If you’ve incorporated in Ontario, these documents should have been directly provided to you by the Ontario Government along with your Company Key.

2. I have informed my placement agency that I have Incorporated

Ensuring timely communication with your agency regarding any changes to your status is crucial, particularly as it directly impacts the structure of your compensation. Make sure to promptly inform your agency that you have established your new corporation. Additionally, provide them with a copy of your articles of incorporation and corporate GST/HST number. If your payments are deposited directly into your corporate bank account, include a voided cheque from that account. Acting promptly is essential to ensure accurate payment processing. Failure to inform your agency of your incorporation status may result in continued deductions for EI & CPP from your payments, along with the issuance of a T4 marked as “Placement Agency – Self-Employed” at year-end.

3. I have opened a bank account for my corporation

To initiate the opening of your corporate bank account, kindly bring along your Articles of Incorporation to your chosen financial institution. Ensuring that the account is a checking account is crucial, and it’s advisable to request a monthly statement along with your returned checks. Additionally, we recommend individuals to apply for a corporate credit card to facilitate the separation of business expenses from personal ones.

4. I have created a My Ontario Account

A My Ontario Account is an online platform provided by the Government of Ontario, that allows individual to access various government services and information conveniently from one central location. We recommend that you create a My Ontario Account as this is an easier way to complete any paperwork with Ontario related to your corporation. Please follow the following instructions to Create a My Ontario Account

5. Initial Return, Notice of Change and Annual Return for Ontario Corporation

Initial Return: All Ontario corporations, including business, not-for-profit, co-operative and other Ontario corporations must file an Initial Return under the Corporations Information Act (CIA) setting out the required information within 60 days after the date of incorporation, amalgamation or continuation into Ontario of the corporation.

Notice of Change: After an Initial Return has been filed by a corporation, if there are any changes to the information filed such as the director or officer information, registered or head office address and administrative information (e.g., official email address and North American Industry Classification System (NAICS) primary activity code), a Notice of Change must be filed within 15 days after the change takes place (A notice of change can be filed directly through My Ontario Account).

Annual Return: The corporation must file an annual return each year under the CIA. An Ontario co-operative corporation subject to the CCA is not required to file an annual return under the CIA. It is important to know that an Annual Return is NOT a Corporate Tax Return.

If you have processed a “Standard Incorporation” or an “Independent Contractor” Package with our firm, the Initial Return has already been processed on your behalf. If you selected the “Bare Minimum Incorporation” Package you will be required to complete the Form directly with My Ontario Account or mail it to the Ministry of Public and Business Service Delivery (MPBSD). For more information, please contact the Ontario Business Registry

6. Business Number and GST/HST

A corporation Business Number (BN) is a unique tax identifier automatically assigned to incorporated businesses by the Canada Revenue Agency (CRA).

Business Number: CRA will automatically open a Business Number for your corporation and mail the confirmation letter to your business address. This Business Number can also be requested by calling 1800-959-5525 (press 6), you will be requested to provide the following information:

Registration Corporation Number
Corporation’s Head office
Directors’ information (Personal Information such as Social Insurance Number, Date of birth and company address).

GST/HST Number: Once you’ve obtained your Business Number, you can ask a CRA Agent to establish a GST/HST Account for your corporation. They will inquire about registration details and request the following information:

Registration Effective Date: This corresponds to the date of incorporation as stated on the Articles/Certificate of Incorporation.
Filing Frequency: Choose from Annual, Quarterly, or Monthly (We recommend selecting Annual Filing).
Corporation’s Fiscal Year End: This falls within 53 weeks from the date of incorporation. If no specific date is chosen, CRA defaults to December 31. (When Choosing your Corporate Year End, it’s advisable to consult your Accountant to determine the most beneficial Year End for your corporation).
Once your GST/HST Number is issued, CRA will mail the registration confirmation letter within 10-15 business days. Additionally, you might receive a call from a compliance CRA officer to validate the accuracy of the provided information.

In the context of GST/HST, the Long Method and the Quick Method refer to two different approaches for calculating GST/HST owed to the government.

Long Method:

Involves calculating GST/HST on each taxable sale or supply of goods or services separately.
Requires keeping detailed records of input tax credits (GST/HST paid on business purchases) and output tax (GST/HST collected on sales).
If your corporation grosses more than $400,000 per fiscal year, you must use the Long Method.
Once you establish your GST/HST Number you are automatically defaulted to the Long Method calculation.

Quick Method:

Offers a simplified way for small businesses to calculate GST/HST owed.
Instead of calculating GST/HST on each individual transaction, a predetermined percentage is applied to total sales (including GST/HST) to determine the amount owed to the government.
A formal application is needed to select the Quick Method.

The choice between the Long Method and the Quick Method depends on factors such as the size of the business, the volume of transactions, and the preference for simplicity versus accuracy in GST/HST reporting and compliance. Small businesses often find the Quick Method advantageous due to its simplicity, while larger businesses may prefer the long method for its accuracy and flexibility.

To apply for Quick Method you must file a Form GST/HST74 immediately upon setting up the corporation. You can make your request electronically using the “File an election” service when you log in to your “My Business Account” or Manually by completing and mailing the GST74 Election and Revocation of an Election to Use the Quick Method of Accounting Form

7. Create My Business Account with CRA

A CRA My Business Account is an online portal provided by the Canada Revenue Agency (CRA) that allows businesses to manage their various business tax accounts conveniently. It offers a range of services, including:

Review tax filings: Businesses can view various tax returns, such as corporate income tax, GST/HST returns, payroll deductions, and more, directly through the portal.
Viewing account balances and transactions: Users can access information about their account balances, transactions, and payment history.
Managing payments: Businesses can make payments for taxes owed securely through the portal using various payment methods.
Correspondence with the CRA: Users can communicate with the CRA, submit documents, and respond to inquiries electronically.
Registering for programs: Businesses can register for various programs, such as the GST/HST program, payroll deductions, and more.

Please follow the following instructions and a step-by-step video that walk through the process of registering, My Business Account – How to Register for My Business Account and Registration Process to access the CRA sign-in services.

8. How do I handle Payroll?

It you intend to pay yourself any money from your corporation, it is important that you discuss with your accountant to determine the best structure for you. After you have established a payroll account for your company, you’ll start receiving requests for monthly source deduction payments. On the remittance form’s back, if you’re not submitting a payment, simply state: “No regular salaried employees; remittances will be made as necessary.”

Your corporation may need to remit Source Deductions by January 10th annually. Ensure timely payroll remittance by scheduling a personal tax planning meeting with your Accountant by November.

9. I have prepared and read all By-laws and Resolutions of my company

Once you’ve submitted your incorporation paperwork, the subsequent action towards establishing a corporation involves conducting an inaugural board meeting and drafting the initial minutes for the corporation. This meeting is imperative for the legal formation of the corporation. During this session, the initial directors and board members will endorse the governing documents, pass resolutions, and appoint the first board of directors. Additionally, the issuance of share certificates for stock ownership should be authorized through a board resolution. These Initial Minutes of a Corporation are essential for furnishing information to the Canada Revenue Agency, which is electronically transmitted when your Accountant files your Corporate Tax Return.

10. I have signed all By-laws, Resolutions and Shares in the Minute book

You must adhere to legal obligations by possessing and upkeeping a Minute Book. This book serves as a comprehensive log of all company transactions. Consequently, whenever there’s a modification (such as altering Officers or Directors, declaring bonuses, issuing shares, etc.), it must be duly noted in your minute book and, when necessary, submitted to Ontario within 15 days after the resolution through Form 1 (Initial Notice/Notice of Change).

An annual meeting of shareholders must be held every year no later than fifteen months after the previous annual meeting.

11. I have retained a Chartered Professional Accountant

Accountants are the experts responsible for verifying the correctness, impartiality, and overall compliance of a company’s financial records. Typically, a company is required to designate an accountant to compile its annual financial statements. This accountant should ideally hold a CPA or possess other relevant accounting qualifications. There are many reasons to hire an accountant including relieving you of the accounting headache and saving you money. For details please view our Accounting and Cloud Bookkeeping packages.

12. I have signed up for a Bookkeeping Tool or Services

We recommend that clients utilize a Bookkeeping Tool to monitor all Corporate Transactions, such as Expenses and Income. We are happy to assist you in setting up various cloud-based bookkeeping tools such as Quickbooks Online, Xero or Dext.

Misc. Tips

Visit us at cpa4it.ca and browse through our web site for useful information on how to operate your new corporation via our Blogs and Free Webinars as well as Tips & Tools.
Keep copies of all invoices generated by your corporation and all receipts for business expense.
Keep copies of all filings and forms sent to all government agencies such as Initial Returns and Annual Returns.