How to Incorporate in Canada with Ownr — CPA Guide (2026)

Incorporating your business is one of the most consequential decisions you will make as a Canadian entrepreneur. It changes your legal liability, your tax obligations, your access to financing, and the way you interact with the CRA. But here is the part that most incorporation guides gloss over entirely: the incorporation itself takes an afternoon. It is the accounting infrastructure you build in the weeks that follow that determines whether your first year goes smoothly or becomes a compliance headache. This guide walks through the full process — from deciding whether to incorporate, to filing with Ownr, to setting up the books properly from day one.

At LedgerLogic, we work with newly incorporated businesses across Canada to set up their Xero accounting, register with the CRA, and establish bookkeeping systems before the first transaction hits the bank account. This guide reflects the process we walk our own clients through.

Affiliate Disclosure: LedgerLogic may earn a commission if you sign up through our affiliate links at no extra cost to you. We only recommend tools we use with our own clients.

Should You Incorporate? — When It Makes Sense (and When It Does Not)

Incorporation is not the right move for every business at every stage. Before you spend $500 or more on incorporation fees, you should understand what you are actually gaining — and what you are taking on.

When Incorporation Makes Sense

Liability protection. A corporation is a separate legal entity. If your business is sued, creditors can generally only pursue the corporation's assets, not your personal savings, home, or investments. For any business that carries risk — client-facing services, physical products, contracts with other businesses — this protection is meaningful. Sole proprietors have no such separation; personal and business assets are one and the same.

Tax planning through the small business deduction. The first $500,000 of active business income earned by a Canadian-Controlled Private Corporation (CCPC) is taxed at the small business rate, which is significantly lower than the top personal marginal rate. In Ontario, for example, the combined federal-provincial small business rate is approximately 12.2%, compared to a top personal rate above 53%. This creates a deferral advantage: you pay less tax on income retained in the corporation and control when you draw it out as salary or dividends. Your CPA can advise on the optimal corporate tax strategy for your specific situation.

Income splitting opportunities. A corporation allows you to pay dividends to family members who are shareholders. While the Tax on Split Income (TOSI) rules have narrowed this considerably since 2018, there are still legitimate planning opportunities for family members who contribute meaningfully to the business. This is a conversation to have with your CPA before incorporating specifically for this purpose.

Credibility and contracts. Some clients, particularly larger companies and government agencies, prefer or require that vendors operate as corporations. A numbered or named corporation with proper articles of incorporation signals permanence and professionalism.

Investment readiness. If you plan to raise capital, bring on partners, or eventually sell the business, a corporate structure is effectively mandatory. Investors invest in shares, and the lifetime capital gains exemption (currently over $1 million for qualifying small business corporation shares) is only available to shareholders of eligible corporations.

When NOT to Incorporate

Very early stage with no revenue. If you are still validating your business idea and have not generated meaningful revenue, the cost and administrative burden of a corporation may not be justified. You can always incorporate later once the business proves viable.

Part-time side project. A sole proprietorship is simpler and cheaper to operate for a side project that generates modest income. You report the income on your personal tax return and avoid the cost of separate corporate tax filings.

Your income stays below the small business threshold. If your total business income is well under $50,000 and you are in a low personal tax bracket, the tax deferral advantage of incorporation is minimal. The cost of maintaining a corporation (annual filings, corporate tax return preparation, potential legal fees) may offset any tax savings.

Federal vs Provincial Incorporation — Which to Choose

This is one of the first decisions you will face, and the answer depends on how and where you operate.

Federal incorporation is administered by Corporations Canada. It gives you name protection across all of Canada — no other federally incorporated company can use the same or confusingly similar name. The trade-off is that if you plan to operate in a specific province (which virtually every business does), you also need to complete an extra-provincial registration in that province. This adds a step and a cost, but it is straightforward.

Provincial incorporation is handled by your province's corporate registry. It is typically simpler and slightly cheaper because there is no extra-provincial registration step. The limitation is that your name is only protected in that one province. If you expand to another province, you may find the name is already taken there.

Our recommendation: Most of our clients who operate remotely, serve clients across multiple provinces, or plan to grow beyond a single province choose federal incorporation. The Canada-wide name protection and flexibility are worth the modest additional registration step. If you are certain you will only ever operate in one province — a local restaurant, a single-location retail store — provincial incorporation is perfectly adequate.

What Is Ownr?

Ownr is an online incorporation platform created by RBC (Royal Bank of Canada). It allows you to incorporate a business, register for business numbers, and file annual returns entirely online, without hiring a lawyer for the basic filing process.

Ownr handles the legal document preparation, NUANS name searches, government filings, and certificate delivery. The platform guides you through each step with plain-language prompts rather than legal jargon. For a straightforward incorporation — single owner, standard share structure, no complex shareholder agreements — Ownr covers everything you need at a fraction of the cost of a corporate lawyer.

Ownr offers different packages depending on your needs, with pricing typically in the $499 to $599 CAD range for a complete federal incorporation (verify current pricing on ownr.co). This includes government filing fees, the NUANS search, articles of incorporation, and your certificate of incorporation.

Step-by-Step: Incorporating with Ownr

Here is the process from start to finish. The entire filing can be completed in one sitting, though you will want to have a few things prepared in advance.

Step 1 — Choose Your Business Name

Decide whether you want a named corporation (e.g., "Maple Leaf Consulting Inc.") or a numbered corporation (e.g., "12345678 Canada Inc."). A numbered corporation is faster and avoids the name search process entirely. A named corporation requires a NUANS search to verify uniqueness. Most businesses that interact with clients prefer a named corporation for branding purposes.

Step 2 — Run a NUANS Name Search

If you chose a named corporation, Ownr runs a NUANS (Newly Upgraded Automated Name Search) to verify your business name is available both federally and in your target province. The search checks existing corporate names, trademarks, and similar registrations. If your preferred name is taken or too similar to an existing registration, you will need to choose an alternative. Ownr includes the NUANS search in its package pricing.

Step 3 — Select Federal or Provincial Incorporation

Choose federal incorporation for Canada-wide name protection or provincial for simpler, single-province operation. Ownr supports both options and adjusts the filing process accordingly. For federal incorporation, Ownr also handles the extra-provincial registration in your home province.

Step 4 — Enter Directors and Shareholders

Provide the names, addresses, and share allocation for all directors and shareholders of the corporation. For a single-owner corporation, you are typically the sole director and sole shareholder. Directors must be individuals (not other corporations), and at least 25% of directors must be Canadian residents for a federally incorporated company.

Step 5 — Choose Your Fiscal Year End

This is a decision that has real tax implications and is often made too casually. Your fiscal year end determines when your corporate tax return is due and affects your tax planning flexibility.

Step 6 — File Articles of Incorporation

Ownr prepares your articles of incorporation based on the information you provided and files them with the appropriate government authority (Corporations Canada for federal, or your provincial registry). Once approved, you receive your certificate of incorporation — the official document confirming your corporation exists as a legal entity. This typically takes one to three business days for federal incorporation through Ownr.

What to Do After Incorporation (The Part Most Guides Skip)

This is where we see the most mistakes. Entrepreneurs celebrate receiving their certificate of incorporation and then do nothing for weeks or months. By the time they come to us, they have been operating without proper accounting, have not registered with the CRA, and have intermingled personal and business finances. Here is the post-incorporation checklist we walk every new client through.

1. Register with the CRA for a Business Number

Your corporation needs a CRA business number with the appropriate program accounts: a corporate income tax account (RC), a GST/HST account (RT) if your revenue will exceed $30,000, and a payroll account (RP) if you will pay yourself or anyone else a salary. Many businesses also register voluntarily for GST/HST before hitting the threshold to claim input tax credits on startup expenses. For details on GST/HST registration rules, see our GST/HST guide for Canadian businesses.

2. Complete Provincial Registrations

If you incorporated federally, register your corporation in each province where you will conduct business. This is typically called an extra-provincial registration or a business name registration, depending on the province. Some provinces also require a provincial tax account registration (e.g., Ontario requires a separate registration for employer health tax if you have payroll).

3. Set Up Xero from Day One

Do not wait until you have transactions to set up your accounting software. Set up Xero immediately after incorporation so that every transaction — from the initial capital contribution to the first expense — is captured properly. Connect your business bank account feeds so transactions flow in automatically. This is the single most impactful thing you can do for your first-year compliance.

4. Open a Business Bank Account

Open a dedicated business bank account in the corporation's name. Never run corporate transactions through your personal account. This is not merely a best practice — it is a legal requirement. The corporation is a separate legal entity, and its finances must be kept separate from yours. Co-mingling funds is one of the fastest ways to lose the liability protection that incorporation provides.

5. Configure Your Chart of Accounts

Xero comes with a default chart of accounts that works for most small businesses, but you will likely need to customise it for your industry. Your CPA or bookkeeper can configure accounts for your specific revenue streams, expense categories, and any industry-specific tracking you need. Getting this right from the start prevents reclassification work later.

6. Establish Bookkeeping Before the First Transaction

This means having a system for capturing receipts (we recommend Dext), categorising expenses, reconciling bank transactions, and tracking accounts receivable and payable. If you are not comfortable doing this yourself, our bookkeeping team handles it for a fixed monthly fee. The key principle: bookkeeping starts on the day the corporation begins operating, not three months later when you realise you need it.

Ownr vs Hiring a Lawyer — Which Is Right for You?

This is not an either-or decision for all situations. Here is how to decide.

Factor	Ownr ($499–$599)	Corporate Lawyer ($1,500–$3,000+)
Best for	Single owner, simple share structure	Multiple shareholders, complex structures
Shareholders' agreement	Not included	Drafted and customised
Share classes	Standard common shares	Multiple classes (common, preferred, voting, non-voting)
Holding company setup	Not supported	Full setup with operating company
Tax planning advice	Not included (use your CPA)	Often coordinated with a tax accountant
Turnaround time	1–3 business days	1–2 weeks
Ongoing support	Annual return filing (additional fee)	Ongoing legal counsel available

Use Ownr when: You are a single owner (or have one or two co-founders with equal ownership), you need a standard common share structure, you do not need a shareholders' agreement, and you are not setting up a holding company. This covers the majority of new small business incorporations.

Use a lawyer when: You have multiple shareholders who need different share classes (voting vs non-voting, common vs preferred), you need a shareholders' agreement to govern the relationship between co-founders, you are setting up a holding company alongside an operating company, or you have complex tax planning requirements that affect the corporate structure. If your situation involves any of these, the additional cost of a lawyer is money well spent.

Common Mistakes New Corporations Make — CPA Perspective

After years of working with newly incorporated businesses, these are the mistakes we see most frequently. Every one of them is avoidable with proper planning.

Choosing the wrong fiscal year end. Many business owners pick December 31 without thinking about it because it seems like the default. But if your business is seasonal with peak revenue in November and December, a December year end means your busiest time coincides with year-end accounting procedures. A fiscal year end in your slow season is almost always better. Talk to your CPA before you file.

Not registering for GST/HST early enough. Registration is mandatory once you exceed $30,000 in taxable revenue over four consecutive calendar quarters. But many businesses should register voluntarily from day one to claim input tax credits on startup expenses — incorporation fees, equipment purchases, professional services, software subscriptions. Those ITCs are real money you cannot recover if you were not registered when the expenses occurred.

Mixing personal and business expenses. This is the single most common mistake we encounter. Using your personal credit card for business purchases, running personal expenses through the business account, or transferring money between personal and corporate accounts without proper documentation. Every one of these creates bookkeeping complications and can trigger CRA scrutiny. Keep the accounts completely separate from day one.

No bookkeeping system in place. Some new business owners assume they can sort out the books later — at year end, or when they hire an accountant. By then, they have months of unsorted transactions, missing receipts, and no clear picture of their financial position. Catch-up bookkeeping always costs more than maintaining books in real time. For guidance on setting up efficient systems, see our small business accounting automation guide.

Not understanding director liability. Incorporating protects your personal assets from business creditors in most circumstances, but directors have specific personal liabilities under Canadian law. These include unremitted GST/HST, unremitted payroll source deductions, and certain employee wages. If the corporation fails to remit these amounts, the CRA can assess the directors personally. Ensure you understand what you are personally liable for as a director.

Forgetting annual filings. A corporation must file an annual return with the federal or provincial government (depending on where you incorporated) and a corporate income tax return (T2) with the CRA every year. Missing these filings can result in the corporation being dissolved and losing its legal status. Set calendar reminders and work with a CPA who tracks these deadlines for you through our tax compliance services.

Frequently Asked Questions