{"id":27900,"date":"2023-06-12T18:45:08","date_gmt":"2023-06-12T18:45:08","guid":{"rendered":"https:\/\/avocat-montreal.ca\/?p=27900"},"modified":"2023-11-17T17:16:20","modified_gmt":"2023-11-17T17:16:20","slug":"business-incorporation-everything-you-need-to-know-before-taking-the-plunge","status":"publish","type":"post","link":"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/","title":{"rendered":"Business incorporation: everything you need to know before taking the plunge"},"content":{"rendered":"\r\n<p class=\"wp-block-paragraph\">In Canada, business incorporation means the creation of a legal entity. The operation results in the creation of a joint-stock company, which becomes a legal entity distinct from its managers and owners. The administrative process transforms a simple company into a legal entity with its own rights and obligations. It enables the entity to open a bank account, sign contracts, operate businesses, pay salaries to employees and pay taxes legally. Given these advantages, how do you incorporate your company?<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_advantages_of_incorporating_a_company\"><\/span>What are the advantages of incorporating a company?<span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#What_are_the_advantages_of_incorporating_a_company\" >What are the advantages of incorporating a company?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Tax_advantages\" >Tax advantages<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Legal_advantages\" >Legal advantages<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Financial_advantages\" >Financial advantages<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Disadvantages_of_incorporation\" >Disadvantages of incorporation<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#How_do_I_incorporate_a_company\" >How do I incorporate a company?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Choosing_the_right_timing\" >Choosing the right timing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Choosing_the_companys_competence\" >Choosing the company&#8217;s competence<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Choosing_the_legal_status\" >Choosing the legal status<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Choosing_a_company_name\" >Choosing a company name<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Produce_documentation\" >Produce documentation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Pay_fees\" >Pay fees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Obtain_certification\" >Obtain certification<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Fine-tune_internal_organization\" >Fine-tune internal organization<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#What_mistakes_should_be_avoided_when_incorporating_companies\" >What mistakes should be avoided when incorporating companies?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Incorporating a company offers a number of tax, financial and legal advantages, despite some drawbacks.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tax_advantages\"><\/span>Tax advantages<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">An incorporated company agrees to pay taxes on net income, i.e., on the profits from its business activity. The tax rate varies according to sales, but remains reasonable in relation to income from salaried <a href=\"https:\/\/avocat-montreal.ca\/en\/employment-lawyer-montreal\/\">employment<\/a>.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">A self-employed person setting up a small business can also claim a tax exemption on his or her earnings.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">On the other hand, earnings distributed by a company in the form of wages and dividends are taxable, whereas <strong>shareholders<\/strong> and company directors benefit from tax exemption if the company&#8217;s funds remain within the company.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Legal_advantages\"><\/span>Legal advantages<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Since an incorporated company is a legal entity with its own legal personality, it remains liable for its obligations and debts. The status thus offers <strong>limited liability<\/strong> for managers and shareholders.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">What&#8217;s more, an incorporated company is perennial and enjoys continuity of existence. It is a distinct legal entity that can survive even after the death of its founder. It can, in fact, be sold to one or more other owners.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Financial_advantages\"><\/span>Financial advantages<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Shareholders benefit from limited financial liability. The structure gives the manager control over all cash flow. The manager has the right to accumulate the company&#8217;s income and exploit or reuse it at a later date.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The company is under no obligation to set up a board of directors.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages_of_incorporation\"><\/span>Disadvantages of incorporation<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Business incorporation involves additional costs (legal and accounting fees) on top of administrative costs. In addition to these financial obligations, the operation requires annual preparation and filing fees. In fact, the production of annual reports is an obligation. It enables governments to keep a close watch on companies.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><strong>Administrative<\/strong> <strong>formalities<\/strong> increase with the size of the company.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">A large company exposes itself to data confidentiality risks. The more employees know about professional secrets, the more their confidentiality is at risk.<\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"640\" height=\"438\" class=\"wp-image-26757\" src=\"https:\/\/avocat-montreal.ca\/wp-content\/uploads\/2023\/06\/incorporation-1.jpg\" alt=\"L'incorporation d'entreprises permet de consolider la structure juridique d'une soci\u00e9t\u00e9.\" srcset=\"https:\/\/avocat-montreal.ca\/wp-content\/uploads\/2023\/06\/incorporation-1.jpg 640w, https:\/\/avocat-montreal.ca\/wp-content\/uploads\/2023\/06\/incorporation-1-300x205.jpg 300w\" sizes=\"(max-width: 640px) 100vw, 640px\" \/><\/figure>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_do_I_incorporate_a_company\"><\/span>How do I incorporate a company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Incorporating a company involves a series of administrative steps.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Choosing_the_right_timing\"><\/span>Choosing the right timing<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Incorporation becomes a necessity when your company is experiencing significant growth. It is advantageous to proceed when your company operates in a high-risk sector.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Some managers choose to incorporate their company in order to qualify for grants and tax credits. These help open the door to a number of tax benefits (such as investment tax credits).<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Finally, incorporation is essential when the company is generating substantial profits, enabling its founder to build up substantial savings.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Choosing_the_companys_competence\"><\/span>Choosing the company&#8217;s competence<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The next step is to decide whether to incorporate your company under federal or provincial jurisdiction. This step determines how the company will operate, as well as the applicable rules. Each jurisdiction has its own laws and specificities.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">A provincially or territorially incorporated company is subject to the <strong>Quebec Business Corporations Act<\/strong>. The company has a French name and its head office is in Quebec. This option has the advantage of imposing a minimum of administrative procedures. However, doing business elsewhere requires an &#8220;extra-provincial&#8221; permit.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">A federally incorporated company requires that 25% of the members of the Board of Directors be Canadian residents. This means you can have your head office anywhere in Canada. If you obtain the necessary permits, you can even do business throughout the country.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">In all respects, the jurisdictional decision is reversible, but averages out in cost and administrative effort.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Choosing_the_legal_status\"><\/span>Choosing the legal status<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Entrepreneurs can choose from a wide range of <strong>legal forms<\/strong> in Canada. Each option has its own tax system and specific features.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The choice depends on your needs and your company&#8217;s activity. As a general rule, private for-profit companies are set up as joint-stock companies, but you are free to choose the Soci\u00e9t\u00e9 en Nom Collectif (SENC), the soci\u00e9t\u00e9 en participation or the Soci\u00e9t\u00e9 en Commandite (SEC).<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Choosing_a_company_name\"><\/span>Choosing a company name<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">To put it simply, some entrepreneurs ask the federal or provincial agency to assign a number to the company (i.e., a numerical designation). The number is unique, accompanied by the state (Canada) and the abbreviation &#8220;Inc&#8221;. Others prefer to forge their reputation right from the <strong>start<\/strong>, choosing a unique name that&#8217;s easy to remember and pronounce.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">By law, every company name must contain a legal notice, in this case &#8220;inc&#8221; or &#8220;lt\u00e9e&#8221;. The name chosen must be carefully checked for <a href=\"http:\/\/www.registreentreprises.gouv.qc.ca\/fr\/sepf\/?utm_campaign=corporate_partners_ao2019&amp;utm_medium=referral&amp;utm_source=devenirentrepreneur&amp;utm_content=textlink_all&amp;utm_term=businessconseils_business-incorporation_fr&amp;tacticId=p3&amp;promoCd=&amp;pid=&amp;promoIdentificationInput=&amp;ef_id=&amp;s_kwcid=\">availability<\/a> and uniqueness, as this is crucial to the company&#8217;s credibility and the validation of the name.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Produce_documentation\"><\/span>Produce documentation<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The next step is to produce specific information for the authorities:<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>names of shareholders ;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>number of shareholders ;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>names of directors;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>the number of directors;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>address of registered office;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>type of share and associated rights;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>field of activity;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>company by-laws;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>the start date of the financial year;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>liquidation provisions;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>provisions for dissolution of the company.<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">It&#8217;s true that standard documents abound on the Internet, and are useful for documentation purposes. However, professional advice is essential. In this respect, the presence of a <strong><a href=\"https:\/\/avocat-montreal.ca\/avocat-droit-des-affaires\/\">business lawyer<\/a><\/strong> will facilitate this step.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Documents should be submitted to the <a href=\"https:\/\/www.google.com\/url?sa=i&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=&amp;cad=rja&amp;uact=8&amp;ved=0CAIQw7AJahcKEwiAu8uAuav_AhUAAAAAHQAAAAAQAw&amp;url=https:\/\/www.registreentreprises.gouv.qc.ca\/&amp;psig=AOvVaw2kYj3LT_Qxb2fz0pocii8B&amp;ust=1686029743671115\">Registraire des Entreprises du Qu\u00e9bec<\/a> or the <strong><a href=\"https:\/\/www.google.com\/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=&amp;cad=rja&amp;uact=8&amp;ved=2ahUKEwjGza7kt6v_AhWpTqQEHV-YAZIQFnoECAoQAQ&amp;url=https:\/\/www.economie.gouv.fr\/entreprises\/registre-commerce-societes-rcs&amp;usg=AOvVaw3_gT1XNEqnQyn4F1kxPy0t\">Registre du Commerce et des Soci\u00e9t\u00e9s<\/a><\/strong> during the incorporation process.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Pay_fees\"><\/span>Pay fees<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The amount of fees to be paid depends on the location of the business. In most cases, a few hundred dollars will suffice. Federal incorporation, however, requires additional territorial or provincial fees.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Fees are payable to the Registrar. They cover the cost of receiving and processing the initial declaration. Obtaining a certificate of incorporation confirms approval of the application and receipt of the required fees.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Obtain_certification\"><\/span>Obtain certification<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Once the application has been processed, the entrepreneur receives the permits and certificates needed to start up his new business. The next step is to go through all the information in the register with a fine-tooth comb, and validate that it is correct. If necessary, the applicant makes any necessary updates or corrections.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Depending on the jurisdiction, it may be necessary to fill in a few additional forms each year to update information or renew rights.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fine-tune_internal_organization\"><\/span>Fine-tune internal organization<span class=\"ez-toc-section-end\"><\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Incorporation completes the process. The entrepreneur and shareholders subscribe to the shares and contribute to the <strong>share capital<\/strong>. Next, the directors work together to determine the company&#8217;s by-laws. They establish the registered office. They choose the financial year-end. Next, each company player is assigned a specific mission.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">In the case of a company with several shareholders, the entrepreneur concludes a shareholders&#8217; <a href=\"https:\/\/avocat-montreal.ca\/en\/family-law\/everything-you-need-to-know-about-a-cohabitation-agreement-in-canada\/\">agreement<\/a> to facilitate day-to-day management and speed up decision-making.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Expert advice is also essential at this stage. Seek the help of a <strong>lawyer specialized in business law<\/strong>, an accountant, a <strong>notary<\/strong> or a business consultant.<\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"1000\" height=\"667\" class=\"wp-image-26759\" src=\"https:\/\/avocat-montreal.ca\/wp-content\/uploads\/2023\/06\/incorporation2.jpg\" alt=\"L'incorporation d'entreprises est une \u00e9tape incontournable \u00e0 la prosp\u00e9rit\u00e9 de votre soci\u00e9t\u00e9.\" srcset=\"https:\/\/avocat-montreal.ca\/wp-content\/uploads\/2023\/06\/incorporation2.jpg 1000w, https:\/\/avocat-montreal.ca\/wp-content\/uploads\/2023\/06\/incorporation2-300x200.jpg 300w, https:\/\/avocat-montreal.ca\/wp-content\/uploads\/2023\/06\/incorporation2-768x512.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/figure>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_mistakes_should_be_avoided_when_incorporating_companies\"><\/span>What mistakes should be avoided when incorporating companies?<span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The most common mistakes in incorporating a company include:<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>omission of appendices to the articles of association ;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>negligence of legal organization;<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"list-style-type: none;\">\r\n<ul>\r\n<li>the definition of a fixed number of directors.<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Although optional, the inclusion of appendices to the articles of association is essential. Don&#8217;t overlook the description of a detailed share capital and the provisions concerning restrictions on the transfer of shares (restrictions on the transfer of securities or shares and other provisions) in your articles.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Company incorporation, like company<strong>registration<\/strong>, is an administrative procedure. Once the certificate has been obtained, the entrepreneur must put his legal organization in order (preparation of corporate registers, setting the fiscal year, election of directors, etc.). This is the most important step, as it puts your business on a solid footing.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Finally, it&#8217;s a fatal mistake to set a limit on the number of directors from the outset, since each time the situation changes, the number of directors needs to be modified.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Fortunately, these mistakes can be narrowly avoided with the help of an expert, in this case a <a href=\"https:\/\/avocat-montreal.ca\/avocat-droit-des-affaires\/\">business lawyer<\/a>. The professional will provide you with the support you need to bring your business incorporation project to a successful conclusion.<\/p>\r\n\r\n<p>&nbsp;<\/p>","protected":false},"excerpt":{"rendered":"<p>In Canada, business incorporation means the creation of a legal entity. The operation results in the creation of a joint-stock company, which becomes a legal entity distinct from its managers and owners. The administrative process transforms a simple company into a legal entity with its own rights and obligations. It enables the entity to open [&hellip;]<\/p>\n","protected":false},"author":53,"featured_media":26760,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_focuskw":"","_yoast_wpseo_title":"","_yoast_wpseo_metadesc":"","footnotes":""},"categories":[2016],"tags":[],"class_list":["post-27900","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Business incorporation: everything you need to know before taking the plunge | AM<\/title>\n<!-- Admin only notice: this page does not show a meta description because it does not have one, either write it for this page specifically or go into the [Yoast SEO - Settings] menu and set up a template. -->\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/avocat-montreal.ca\/en\/business-law\/business-incorporation-everything-you-need-to-know-before-taking-the-plunge\/\" \/>\n<meta property=\"og:locale\" content=\"fr_FR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Business incorporation: everything you need to know before taking the plunge | AM\" \/>\n<meta property=\"og:description\" content=\"In Canada, business incorporation means the creation of a legal entity. 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