This article explains the steps you and your founding team need to take after you incorporate your business on Goodlawyer.
Once you complete the Goodlawyer Incorporation intake form, we will prepare all of the legal documents required to create and organize your corporation and send them to you (and any other relevant signatories) for digital signature. Once fully executed, we will file the documentation with the appropriate corporate registry and create your corporation. Finally, we will upload a digital (PDF) record of your corporation's minute book onto your Goodlawyer account, which you’ll find under the Corporate Records tab on the “My Corporation” page.
Now that your corporation legally exists, there’s a few things you need to do:
- Your Minute Book
- Business Bank Account
- Pay For Shares
- Shareholder Agreement
- Canada Revenue Agency Matters
- Annual Corporate Return
1. Your Minute Book
In Canada, every corporation is legally required to keep a minute book of their corporation. Additionally, any shareholders and creditors of the corporation, their personal representatives and the director(s) may examine the minute book during the usual business hours of the corporation, and may take extracts from the records, free of charge.
After we finish creating your corporation, we will upload a digital PDF of your minute book to your Goodlawyer account, where you can download it any time. Many corporations like to print and keep a physical copy of their minute book, but keeping a digital version is completely acceptable and legal. At a minimum, we suggest downloading your PDF and keeping a copy for off-line viewing.
2. Business Bank Account
The first thing you need to do with your new corporation is to open a business bank account. This is a critical and legally required step. It separates the founders’ finances from the corporation’s, limits your legal liability, and differentiates the founders’ personal taxes from the corporation’s business taxes.
A director of the corporation must open the corporation’s bank account. To open the account and confirm the authority of the director, the bank requires access to the corporation’s minute book, specifically, its Articles of Incorporation and proof that the person opening the account is indeed a director.
3. Pay For Shares
Once your corporation has a bank account, the initial shareholders of the corporation must pay for the shares they subscribed for as part of the incorporation process (this is a legal requirement). When setting up a new corporation, this is usually a small fee as the shares are nominally priced.
By default, Goodlawyer’s Incorporations assign the total value of your initial 10,000 shares at $100.00, to be paid to the corporation by the initial shareholders for their respective initial share allocations. That means your corporation should receive $100.00 in total from all shareholders.
The easiest way to collect payment is by having the shareholders write cheques to the corporation for the value of their respective initial share allocations, or e-transfers which are directly deposited. Paying for shares with cash is highly discouraged as it’s difficult to track.
Refer to your minute book, or the “My Organization” page on your Goodlawyer account to determine how much money each shareholder owes the corporation.
NOTE that Goodlawyer does NOT handle this step — it must be facilitated by you and your business partners.
4. Shareholder Agreement
If you founded your new corporation with more than one shareholder, you should strongly consider using a Shareholder Agreement to help govern your newly formed corporation. This document clarifies the relationships between the shareholders and the corporation, and clearly defines their rights and obligations amongst each other and to the corporation.
5. Canada Revenue Agency Matters
Goodlawyer Incorporations include creating a tax business number for your corporation, which we set up with the Canada Revenue Agency at the time of your incorporation.
Once you are incorporated, it is up to the directors of your new corporation to use the tax business number to apply for income tax and payroll remittance accounts, and harmonized sales tax (HST) or goods and services tax (GST) accounts, all from the Canada Revenue Agency.
Although it is not legally required to register for an HST/GST account, it is strongly recommended that you obtain it before hitting the $30,000 annual gross revenue threshold for having to collect and remit sales taxes. If you do not anticipate hitting this threshold, then an HST/GST number is optional.
6. Annual Corporate Return
Every corporation in Canada is legally required to file an annual corporate return with their corporate regulator(s), starting on the first anniversary date of your Incorporation and every year after (this is NOT the same as your annual corporate tax return which is filed with the CRA). On Goodlawyer, we make that corporate maintenance as easy as signing a document package once per year with our Annual Corporate Return plan ($199/year) and Pro ($599/year).
It is up to you to update your corporate information should it change throughout the year. This can be done under the “My Corporation” page and clicking on the “Corporate Return” tab.
If you purchase a Basic Incorporation, we will automatically roll you into a $199/year Annual Corporate Return plan 12 months from the date of your Incorporation. Pro-Start Incorporations include an annual Pro Subscription and automatically renew 12 months from the date of your Incorporation. You can cancel your auto-renewal any time during the first 12 months following your incorporation, however, you are still required by law to complete an annual corporate return for your corporation in the manner of your choosing.