Incorporating Your Business: What You Need to Know

Okay, so you've recently incorporated your business, or you're thinking about incorporating your business, and you want to know what that actually means? Well, first and foremost, a corporation is a separate legal entity, which means it gets its own birth certificate. It'll show you the date that it was created, it was born. We can't create it in the past. It'll show you the address of which it was located. So if you, if you move in the future, the address of where you were born is always going to stay in place and it'll say who your parents are or who the shareholders are. So it very much is its own separate legal entity that comes into existence on a particular date. It has to be from now or into the future. We can schedule one to be done in the future, but we can't schedule one to exist in the past. So what happens? You've now got this corporation, it's set up. You've now got this separate legal entity to run your business, whether it's an operating company or a holding company or a professional corporation, or a personal real estate corporation, whichever it is, they all operate the exact same way. The business has now been started. And in the very first year where you start your incorporation, you have 367 or 368 days to choose your year end date. So, for example, if it's September 1st, I can pick a year end date all the way up to essentially August 31st the following year. I, I could also pick November 30th if I want to have a year end November 30th. So in your first year, you have the option to create that. Azure Incorporated. You now have a new business number. You have a new identity inside this business. But if you need to register for any sort of payroll deductions, workers compensation, hst, all of that needs to be filed separately. There's no assumption that all of these things are started from day one. You have to take ownership over actually going out and actively starting these accounts. So that's what that looks like when we get to that year end date, whether it's 365 days or it's 50 days. Whatever you decide for your year end date in the first year, you need to file a corporate tax filing, just like you have your own personal tax filing. The corporation, which is its own identity, needs to file its separate corporate, corporate taxes. Taxes are due six months after that year end date. So if I pick December, for example, June 30th is my tax filing deadline. Any balances that are owing related to that filing are due 90 days after year end or March 31st of that year. So a few nuances that are a little bit different than your individual filing. Corporate tax return is also about that thick versus a little tiny personal tax return. The complexity is a little bit higher. We have to include our assets and liabilities as part of the filing. So it is a little bit more difficult. You definitely want to seek professional guidance in getting that filed on your behalf, but it will allow you to save taxes. And that's the whole intention of setting up a corporation is one, for tax planning and two, to make sure that you're protected so something happens inside that business. You and your family are protected because it's not you that's acting this way and it's the corporation. There's a few exceptions. If you're doing things you know you shouldn't be doing, you're not overly protected. But as long as it's regular business activity, this corporation protects you and your family from anything that goes on there. So that's what setting up a corporation looks like. A few decisions you have to make early on. And those are the requirements for filing that corporate tax to return.