Starting a business as a sole proprietorship is a popular choice for many entrepreneurs in Ontario. However, as the business grows, it may become necessary to change the legal structure to a corporation. This blog will explain how to change from a sole proprietorship to a corporation in Ontario.
The first step is to decide on the type of corporation to be formed. The most common types of corporations are the federal corporation and the Ontario corporation. Federal corporations are registered with the Government of Canada, while Ontario corporations are registered with the Ontario Ministry of Government and Consumer Services.
Once the type of corporation has been chosen, the next step is to choose a name for the corporation. The name must be unique and not already in use by another corporation. The name must also meet the requirements of the Business Names Act (Ontario).
After choosing a name, the next step is to complete the necessary registration documents. This includes completing Articles of Incorporation, which outlines the corporation’s purpose, structure, and rules. The Articles of Incorporation must be filed with the relevant government agency and must meet the requirements set out in the Business Corporations Act (Ontario).
It is also necessary to obtain a corporate tax number and register for other relevant taxes, such as HST/GST, payroll taxes, and business permits or licenses.
The final step is to wind down the sole proprietorship. This involves cancelling any business registrations or licenses associated with the sole proprietorship, closing bank accounts, and settling any outstanding debts or obligations.
It is important to note that changing from a sole proprietorship to a corporation can have legal and financial implications. Therefore, it is recommended to seek the guidance of a qualified business lawyer to ensure that the process is completed correctly and in compliance with all legal requirements.
If you are considering changing your business from a sole proprietorship to a corporation in Ontario, Falcon Law PC can help. Our experienced business lawyers can guide you through the process and ensure that all legal requirements are met. Contact us at 1-877-892-7778 or email@example.com to schedule a consultation.