Step-by-Step Guide: How to Incorporate Your Health Business in Canada
Why Incorporation is a Smart Move for Health Clinics
If you’re on the verge of opening a health clinic in Canada, incorporating might be a smart move! There are compelling incorporation advantages like limited liability protection and tax benefits.
On the other hand, it can also cost more than it saves you in income tax, which is why Tyagi Group Accounting is here to help you make the wisest decision for your financial future as a health professional.
This step-by-step guide will walk you through the process of incorporating for health clinics, making it smooth sailing for your new venture.
Coming up:
How to choose the right business structure
Registering your business name
Completing and filing incorporation documents
Setting up corporate records and accounts
Before we go through each step, grab this freebie that explains why incorporating might cost you more than it saves in income tax.
Choosing the Right Business Structure
Be sure to choose the right business structure from the start, as changing it later on can be costly and time-consuming. A sole proprietorship is the simplest business type, owned by one person. However, it’s unincorporated and offers no legal separation between the owner and the business.
The two types of incorporation for a health business are professional corporations and general corporations. General corporations are not allowed to provide health services. You can see more on the advantages and disadvantages of each business structure in this blog that looks at different types of businesses.
Registering Your Business Name
Flex your creative muscles and choose a catchy and legally available business name. First, brainstorm names that reflect your brand’s personality and the services you offer.
You will also need to conduct a NUANS name search through the Government of Canada to ensure it's not already in use by a federal corporation or trademarked. This is an instant online search that helps you arrive at a totally unique business name selection.
You can also search provincial registries for trade name availability in your operating area. Once you're happy with your final selection, ask an accountant to assist you with business name registration according to the provincial government requirements in your area.
Completing and Filing Incorporation Documents
The next step towards incorporating your health business is to complete and file the relevant paperwork. The incorporation process requires filing key documents with the CRA, but these may vary depending on where you live in Canada.
For Ontario-based businesses, the required incorporation documents typically include:
Two copies of the Articles of Incorporation form outlining your business name, purpose, and share structure.
Your NUANS search not more than 90 days old.
A cover letter including your contact information.
A cheque payable to the Minister of Finance.
Supporting documents as recommended by your accountant.
Once your documents have been submitted correctly, your registration will be processed and the CRA will mail you a Business Number for your corporation to your registered address within five business days.
Setting Up Corporate Records and Accounts
The setup of business accounts is just as important as maintaining them for any new corporation. This will help you stay compliant and keep clear, accurate corporate records for tax and auditing purposes. However, it’s important to note that business accounts for a corporation are quite different to that of a sole proprietorship.
Once you incorporate, you will need to purchase a minute book that will include various items such as corporate articles, resolutions and minute meetings, a director’s register and shareholders agreement among others.
Our experienced accountants at Tyagi Group accounting can provide further information on what exactly you need to include in your corporate records. We’ll be there to guide you every step of the way, so you’re not thrown in the deep end with maintaining your corporation after the initial setup.
Final Steps and Tips for a Smooth Incorporation Process
By following these steps, you can lay the legal groundwork for your health business.
Remember, this blog provides helpful tips, but consulting a professional accounting team like Tyagi Group during your final steps cannot be more highly recommended. As health industry specialists, we’ll support you in making the right incorporation decisions, help you stay compliant, and protect your financial health.
Key tips to remember:
Choose the right business structure from the start.
Check the availability of your preferred business name on NUANS.
Submit correct incorporation documents to avoid delays.
Maintain a healthy corporation by organizing business accounts in your minute book.
You don’t have to take this leap on your own. Sign up for our Business Foundations: Incorporation webinar and approach the incorporation process with a dependable toolbox of knowledge. This webinar answers all your incorporation questions and provides clarity in easy-to-understand terms.
Sign up here.
