As a freelancer in Canada, incorporating your business can provide a variety of benefits. By incorporating, you are separating your business and personal finances, limiting your personal liability, and gaining credibility with potential clients. Here’s what you need to know about incorporating your freelance business in Toronto and Ontario.
- Choose a Business Name: Choosing a unique business name is important when incorporating your freelance business. The name should be distinguishable from other business names and should not infringe on any existing trademarks or copyrights. You can search for existing business names using the NUANS (Newly Upgraded Automated Name Search) system, which is a searchable database of existing business names in Canada.
- Determine Your Business Structure: When incorporating your freelance business, you have several options for business structures, including a sole proprietorship, partnership, or corporation. A sole proprietorship is the simplest and most common structure for freelancers, but incorporating as a corporation can provide added legal protections and tax benefits. It’s important to consult with a lawyer or accountant to determine the best structure for your specific business needs.
- Register Your Business: To incorporate your freelance business in Ontario, you will need to register your business with the Ontario government. You can do this online through the Ontario Business Information System (ONBIS) or by mail. You will need to provide your business name, business structure, and other relevant information.
- Obtain a Business Number and HST/GST Number: Once you have registered your business, you will need to obtain a Business Number (BN) from the Canada Revenue Agency (CRA). This number is used to identify your business for tax purposes. If you plan on earning more than $30,000 per year, you will also need to register for a Harmonized Sales Tax (HST) or Goods and Services Tax (GST) number.
- File Annual Reports: As a corporation in Ontario, you will be required to file annual reports with the Ontario government. This report includes information such as your business name, address, and the names of your directors and officers. You may also be required to file annual tax returns with the CRA.
Incorporating your freelance business in Toronto and Ontario can provide a variety of benefits, including added legal protections, tax benefits, and increased credibility with potential clients. By following these steps and consulting with a lawyer or accountant, you can ensure that your business is set up for success.