As a contractor, it is recommended that you become incorporated and obtain the appropriate tax and other government registrations and accounts. This will take between 1 and 2 weeks to complete and cost between $300 and $500. By becoming incorporated you are helping to identify yourself as an independent contractor rather than an employee. In addition, there are several important legal and financial benefits from becoming incorporated. Finally, unless you are incorporated, Infotek will deduct both CPP and EI payments from your payments.
There are differences between incorporating a business and registering a business name. In addition, the process for obtaining and HST number is different from both of these. It is likely that a minimum of five steps are required for your new company:
- Incorporate your business
- Obtain an HST number
- File an Initial Return/Change of Ontario Corporation form -- Form 1
- Register your Business Name
- Obtain a commercial bank account for your company
Other steps may also be necessary if you will be obtaining financing, employing other people or will be distributing profits to shareholders.
There are a number of government and other web sites that can provide information concerning incorporation and the benefits and requirements of becoming a business. Be aware that many of the commercial sites provide services and products that may not actually be required to become incorporated. Some of the key Ontario links are provided below: