INCORPORATION 101

When incorporating, make sure that you get a minute book, not just a Certificate of Incorporation and Articles.  Corporations must keep minutes of all major decisions that shareholders, directors and officers make.  Shareholders are the owners of the Corporation, and they appoint directors to make the decisions for the Corporation.  Directors appoint Officers to manage the day to day operations of the Corporation.  The appointment of each of these as well as issuance of shares must be recorded in the minute book from the beginning, along with other decisions such as the address, bank and accountant of the Corporation.

Once a corporation is set up, an annual return must be filed every year with the provincial government.  This is a small cost, but must be done every year or the Corporation will be dissolved.  Annual returns must not be confused with Corporate Tax Returns.

Another key factor in setting up a corporation is getting a Business Number.  All Corporations require a Business Number.  A Business Number (BN) is simply a numbering system used by the CRA to track your business.  It is based on the idea of one business, one number.  The BN consists of two parts – the Business Number and the account identifier.  The entire number has 15 characters – 9 digits to identify the business and 2 letters and 4 digits to identify each account a business may have. Not all Sole Proprietorships require a business numbers.  Only those who need to collect GST, have a payroll, or import and export need a Business Number.