Incorporating a business in Ontario, explained
Ontario businesses can incorporate provincially or federally, which changes filings, costs, and how you're taxed.
Incorporating creates a separate legal entity for your business. In Ontario you can incorporate provincially (under Ontario law) or federally (under the CBCA), and the choice affects registration, name protection, and where you can operate under your name.
What changes once you incorporate
Your corporation files its own T2 corporate tax return, can pay you in salary or dividends, and keeps its finances separate from your personal ones. That separation is powerful, but it also means real bookkeeping and a yearly corporate filing.
Bookkeeping from day one
Keeping corporate books current from incorporation avoids a painful catch-up later and makes your first T2 straightforward.
This is general information, not tax advice for your situation. Book a call and a Canadian accountant will give you the answer for your business.
Common questions
Should I incorporate provincially or federally?
It depends on your name, where you'll operate, and your plans. Both are common for Ontario businesses; your accountant can walk you through the trade-offs.
Do I need to file a T2 after incorporating?
Yes. Every incorporated business files a T2 each year, even one with no income.