Incorporating Your Business: What You Need to Know

If you’ve recently incorporated your business—or you’re considering doing so—you might be wondering what comes next. Incorporation is more than just a formality. It’s the creation of an entirely new legal entity that brings with it important responsibilities, benefits, and decisions that need to be made early on.

Let’s walk through what it really means to incorporate, and what you need to know to get started on the right foot.

A Corporation Is Its Own Legal Identity

Once you incorporate, you’ve essentially created a new person in the eyes of the law. Just like a human being, your corporation receives its own:

• Date of birth (the incorporation date, which cannot be backdated)

• Birthplace (its registered address at the time of incorporation)

• Parents (the shareholders or owners)

This means your corporation exists independently of you. Whether it’s an operating company, holding company, professional corporation, or personal real estate corporation, the legal mechanics are the same: the corporation owns its income, assets, and liabilities—not you personally.

You Choose the Year-End Date

One of the most strategic decisions you’ll make in your first year is selecting your corporate year-end. You have up between 365 and 368 days from your incorporation date to pick your fiscal year-end.

For example, if your incorporation date is September 1, you could choose a year-end of August 31, or any other date within that window—such as November 30—depending on your operational or tax planning needs. This choice impacts when your corporate taxes are due, so it’s wise to consult with your accountant early.

Registering for Additional Accounts

Incorporation doesn’t automatically register your business for:

• GST/HST

• Payroll remittances

• Workers’ compensation

• Other required business accounts

These must be set up separately under your corporation’s new business number. It’s your responsibility to activate these accounts once you begin hiring or collecting tax.

Corporate Tax Filing Requirements

Just like you file personal taxes each year, your corporation must file a separate tax return. This filing is more complex than a personal return—it includes details about the company’s assets, liabilities, revenues, and expenses.

Here’s how corporate filing deadlines work:

• Corporate tax return is due six months after your year-end date

• Any taxes owing are due within 90 days after year-end

For example, if your corporate year-end is December 31, your tax return is due June 30, and any taxes payable must be submitted by March 31.

Filing accurately is essential—not just for compliance, but also to take advantage of the tax planning opportunities that incorporation makes possible.

Why Incorporation Matters

Aside from tax efficiency, incorporation provides a level of legal protection. As long as you're acting within the boundaries of regular business conduct, the corporation helps shield you and your family from liabilities incurred by the business. It separates your personal assets from your business risks.

However, this protection isn’t absolute. If you're engaging in negligent or fraudulent activity, that shield disappears. But in typical day-to-day operations, incorporation offers peace of mind and a strong legal foundation for growth.

Ready to Set Up Your Corporation Properly?

Incorporation is a powerful tool for protecting your business and optimizing your tax strategy—but it comes with important decisions and responsibilities.

At Gauvreau, we guide entrepreneurs through every step of the incorporation process, from structure and setup to registration and compliance.