Did you know that incorporation is not just about registering with the authorities and getting a charter? Incorporating your business is not complex in itself. However, it must be carefully planned and executed. The main steps in incorporation are as follows:
1) Communicate the transaction to creditors and other stakeholders
If you are currently operating a business on your own, your financial institution probably holds collateral on your business assets to ensure that your loans are repaid. It is important to understand that incorporation implies that you will be transferring some of your assets to the company and therefore, you will no longer own them. Therefore, in order to avoid being in default with your creditors, you must advise them of your intention to incorporate so that your credit agreements can be modified and you will not find yourself in default.
2) Incorporate the company and obtain its tax numbers
Incorporation, in and of itself, is the creation of an autonomous legal entity and therefore, certain administrative formalities must be respected. In addition to obtaining a corporate charter, since the company will be a taxpayer for tax purposes, it is necessary to obtain the usual tax numbers, such as identification numbers, GST/QST numbers, source deductions, etc.
3) Draw up a balance sheet and transfer to the company the assets it needs to operate
Before incorporation, you had assets used for business purposes and other assets used for personal purposes. Although you made a practical distinction between the two, they were all part of your personal assets. When you incorporate, you will need to make a balance sheet of the assets you use for the business because these assets will be transferred to the company, which will now own them.
Important... Incorporation pays off. Contact your certified expert today
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