Setting Up a Corporation and Hiring Employees in Ontario: Compliance, Administration, and Filing Requirements

Requirements

At IncorpCan, we make it easy and cost-effective to incorporate and hire employees in Canada. We have a streamlined information gathering process to incorporate your Canadian company, complete the required business registrations and open your bank account. We will also take care of ongoing compliance and filings for you.

Below is a list of the general requirements to set up a company and hire employees in Ontario. We can work with your advisors to ensure all requirements are captured based on your unique circumstances.

1. Incorporation Steps

(a) Choose a Business Name:

• Conduct a NUANS (Newly Upgraded Automated Name Search) report to ensure your chosen name is unique.
• Register the business name with the Ontario Ministry of Government and Consumer Services.

(b) Prepare and File Articles of Incorporation:

• File the Articles of Incorporation with the Ontario Ministry of Government and Consumer Services.
• Provide details such as the corporate name, registered office address, number of directors, and share structure.

(c) Obtain a Business Number (BN):

• Apply for a Business Number from the Canada Revenue Agency (CRA) to identify your business with federal, provincial, and municipal governments.

(d) Register for GST/HST:

• If your annual revenue exceeds $30,000, register for the Goods and Services Tax (GST) or Harmonized Sales Tax (HST).

(e) Obtain Necessary Permits and Licenses:

• Depending on your business activities, acquire specific permits or licenses required by federal, provincial, or municipal governments.

(f) Open a Business Bank Account:

• Set up a separate business bank account to manage your corporate finances effectively. We use Vault as a banking partner.

(g) Create Corporate Records:

• Maintain a minute book containing all key documents such as the Articles of Incorporation, bylaws, minutes of meetings, and share certificates.

2. Hiring Employees in Ontario

(a) Register for Payroll Accounts:

• Open a payroll program account with the CRA to manage payroll deductions and remittances.

(b) Workplace Safety and Insurance Board (WSIB) Registration:

• Register with the WSIB if you have employees, and report and remit WSIB premiums regularly based on your industry classification and payroll.

(c) Employer Health Tax (EHT):

• If your annual Ontario payroll exceeds $1.2 million, register for and remit the Employer Health Tax (EHT).

3. Ongoing Compliance and Filings

(a) Payroll Deductions and Remittances:

• Deduct Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax from employees' wages.
• Remit these payroll deductions, along with your share of CPP and EI contributions, to the CRA regularly.

(b) Payroll Information Returns:

• Provide employees with T4 slips by the last day of February following the calendar year.
• File a T4 Summary with the CRA by the last day of February.

(c) Records of Employment (ROE):

• Issue a Record of Employment to Service Canada whenever an employee experiences an interruption in earnings.

(d) Annual EHT Return:

• File an annual EHT return by March 15th of the following year if applicable.

(e) GST/HST Returns:

• File GST/HST returns regularly (monthly, quarterly, or annually) and remit the collected tax to the CRA.

(f) Corporate Income Tax Returns:

• File annual corporate income tax returns (T2) with the CRA and, if applicable, with Ontario’s provincial tax authority. If applicable, transfer pricing compliance may be required. We suggest you consult with your tax advisor to determine applicability.

(g) Annual Return with Ontario Ministry of Government and Consumer Services:

• File an annual return to keep your corporation in good standing.

(h) Financial Statements:

• Maintain accurate financial records and prepare annual financial statements.

Summary

Incorporating a company and hiring employees in Ontario involves multiple steps and ongoing compliance requirements. From obtaining a Business Number and registering for GST/HST to remitting payroll deductions, IncorpCan can make it easy and cost-effective for you to meet these requirements.