What to Do After Incorporating Your Business in Canada
So, you’ve incorporated your business - congratulations! 🎉 But now what?
Incorporation is a big step, but it also comes with new responsibilities. From setting up financial systems to registering for tax accounts, there are a few key tasks to check off to ensure your business runs smoothly.
This guide will walk you through everything you need to do after incorporation without the stress.
Let’s get started!
Register for Necessary Accounts
Once your business is incorporated, you’ll need to register for a few key accounts to stay compliant and manage finances properly.
CRA Business Number (BN)
If you incorporated federally or in most provinces, you likely received a Business Number automatically from the Canada Revenue Agency. This is your business’s unique tax ID. If you didn’t receive one, you can register for a BN through the CRA’s Business Registration Online portal.
GST/HST Account
- You must register for a GST/HST account if your taxable sales exceed $30,000 in revenue within any 12-month period.
- Even if your revenue is below $30,000, registering early can be beneficial since it allows you to claim back the GST/HST you pay on business expenses.
- You can register online through CRA My Business Account or by calling the CRA.
For more details on GST/HST registration, check out Avalon Accounting’s guide on GST/HST registration.
Payroll Account
If you plan to hire employees or pay yourself a salary, you’ll need to set up a payroll account with the CRA. This ensures you can remit income tax, Canada Pension Plan contributions, and Employment Insurance premiums properly.
To register, use the CRA’s Business Registration Online system. Once set up, you’ll need to:
- Deduct CPP, EI, and income tax from employee paychecks
- Remit these amounts to the CRA on a regular schedule
- File annual T4 slips for employees
For a step-by-step breakdown of how to run payroll, see Avalon Accounting’s guide to running payroll in Canada.
Corporate Bank Account
A business bank account is essential for keeping personal and business finances separate. Most banks require:
- Your Articles of Incorporation
- Your CRA Business Number
- A piece of identification
Consider comparing banks to find one that suits your business needs in terms of fees, transaction limits, and online banking options.
For a detailed comparison of business bank accounts, check out Avalon Accounting’s guide to business bank accounts.
Business Credit Card
A business credit card helps:
- Keep business expenses separate from personal spending
- Build a credit history for your business
- Streamline bookkeeping and expense tracking
Look for a card with low fees and useful rewards, such as cashback or travel points, depending on your spending habits.
Getting these accounts set up early will help your business stay compliant and organized from day one.
Set Up a Basic Financial System
A strong financial system will save you time, help you make better business decisions, and keep you compliant with tax rules. Here’s how to set up a system that works for your business.
Choose Bookkeeping Software
Cloud-based bookkeeping software makes it easy to track income and expenses, generate invoices, and stay on top of tax obligations. Two of the best options are:
- Xero – User-friendly, great for automation, and integrates well with third-party apps.
- QuickBooks Online – Offers strong reporting tools and is widely used by accountants.
Not sure which one is right for you? Check out Avalon Accounting’s comparison of Xero and QBO to find the best fit.
Track Income and Expenses
A simple system for tracking transactions will help you stay organized and avoid scrambling at tax time.
- Use your bookkeeping software to categorize income and expenses as they happen.
- Keep digital copies of receipts using apps like Dext or Hubdoc, which integrate with Xero and QBO.
- Separate business and personal finances – Always use your corporate bank account and business credit card for business expenses.
Set Up Invoicing and Payment Processing
If you sell products or services, you need an easy way to send invoices and get paid. Consider using:
- Xero or QBO – Both offer built-in invoicing that integrates with your bookkeeping system.
- Stripe or Square – Good for online payments and point-of-sale transactions.
Make it easy for customers to pay by offering multiple payment options, such as credit cards, bank transfers, or pre-authorized debit.
Understand Your Financial Reports
To make informed business decisions, you need to understand the basic financial reports:
- Profit and Loss Statement (AKA Income Statement) – Shows revenue, expenses, and profit over a specific period.
- Balance Sheet – A snapshot of your business’s financial position, including assets, liabilities, and equity.
- Cash Flow Statement – Tracks how money moves in and out of your business, helping you plan for upcoming expenses.
For a deeper dive into these reports and how to use them, check out Avalon Accounting’s Financial Foundations Guide.
By setting up a solid financial system from the start, you’ll avoid headaches down the road and keep your business running smoothly.
Understand Your Tax Obligations
Once your business is incorporated, your tax responsibilities change. Unlike a sole proprietorship, a corporation is a separate legal entity, which means new filing requirements, payment deadlines, and tax planning considerations.
Here’s what you need to know.
Corporate Tax Filings and Payment Deadlines
Your corporation must file a T2 corporate tax return every year, even if the business didn’t make a profit.
The return is due six months after your fiscal year-end, but any taxes owed must typically be paid within two or three months of year-end, depending on your income level.
Missing a deadline can lead to interest and penalties, so it’s a good idea to stay ahead of tax due dates. For a full breakdown of key filing deadlines, check out Avalon Accounting’s Guide to Tax Deadlines.
Salary vs. Dividends: Paying Yourself from the Corporation
As a business owner, you have two main options for paying yourself:
- Salary – A fixed payment that counts as employment income, requires payroll deductions (CPP, EI, income tax), and helps build RRSP contribution room.
- Dividends – A payout from after-tax company profits that is taxed at a lower personal rate but does not contribute to CPP or RRSPs.
Each option has different tax implications, so it’s important to choose the right strategy for your situation.
To learn more, check out Avalon Accounting’s detailed article on Salary vs. Dividends.
Payroll Deductions and Remittances
If you pay yourself a salary or hire employees, you’ll need to register a payroll account and deduct:
- Canada Pension Plan contributions
- Employment Insurance premiums (if applicable)
- Federal and provincial income tax
These amounts must be remitted to the CRA on a set schedule, usually monthly or quarterly.
Late payments can result in penalties, so make sure you’re aware of your due dates.
Organize Compliance and Legal Documents
Incorporating your business comes with ongoing legal and compliance responsibilities. Keeping your documents organized will help you stay in good standing with the government and avoid unnecessary fines or administrative headaches.
Maintain a Corporate Minute Book
A corporate minute book is where you keep important records related to your business. While not legally required in all cases, it is highly recommended. It should include:
- Articles of Incorporation
- Shareholder and director information
- Corporate bylaws
- Resolutions and meeting minutes
- Share issuances and transfers
Many business owners work with a lawyer to maintain their minute book, but if you prefer to handle it yourself, there are online services like Ownr that can help.
File Your Annual Return
Corporations must file an annual return with the federal or provincial corporate registry. This is separate from your corporate tax return and confirms that your company is still active and operating.
Filing deadlines and requirements vary depending on where you incorporated. Missing your annual return can result in late fees or even the dissolution of your corporation, so be sure to stay on top of it.
Consider a Shareholder Agreement
If your corporation has more than one owner, a shareholder agreement is an important document to have in place. It outlines key details such as:
- Ownership percentages and voting rights
- How profits will be distributed
- What happens if a shareholder wants to leave the business or sell their shares
- Dispute resolution processes
Without a clear agreement, disagreements between business partners can become complicated and costly. If you don’t already have a shareholder agreement, consulting a lawyer can help you set one up properly.
Taking the time to organize your legal documents now will save you trouble in the future and help your business run more smoothly.
Get Business Insurance
Business insurance helps protect your company from financial losses due to lawsuits, accidents, or unexpected events. While not always legally required, it can prevent major financial setbacks.
Types of Business Insurance to Consider
- General Liability Insurance – Covers legal claims related to injuries, property damage, or accidents involving your business.
- Professional Liability Insurance – Also known as errors and omissions (E&O) insurance, this protects service-based businesses from claims of negligence or mistakes.
- Cybersecurity Insurance – Helps cover losses from data breaches, hacking, or cyberattacks, which is especially important for e-commerce businesses.
The right coverage depends on your industry, business activities, and level of risk. A conversation with an insurance broker can help you find a policy that fits your needs.
Start Marketing and Building Your Brand
A strong brand and marketing strategy will help you attract customers and grow your business. Even if you rely on word-of-mouth, having an online presence makes it easier for people to find and trust you.
Register a Business Domain and Professional Email
Using a custom domain (e.g. yourbusiness.com) and a professional email address makes your business look more credible. Services like Google Workspace or Microsoft 365 can help set this up.
Build a Website
Even a simple website acts as a digital storefront for your business.
It should include things like:
- A clear description of what you do
- Contact information
- Pricing or service details
- A way for potential customers to take action, like booking a call or making a purchase
Platforms like Squarespace, Wix, and Shopify make it easy to build a professional-looking site without coding.
Establish a Social Media Presence
Social media is a great way to connect with potential customers and share updates about your business.
Choose 1-2 platforms where your audience is active:
- LinkedIn – Ideal for B2B businesses and professional services
- Instagram – Great for visual brands and e-commerce businesses
- Facebook – Useful for local businesses and community engagement
- TikTok – Growing in popularity for brands with engaging short-form content
The key is consistency. Posting regularly and engaging with your audience can help build trust and visibility.
Network and Build Partnerships
Connecting with other business owners, joining industry groups, or attending networking events can lead to new opportunities. Look for:
- Local business associations
- Online communities in your industry
- Partnerships with complementary businesses
Marketing doesn’t have to be complicated or expensive. The most important thing is to start with the basics and build from there.
Build Your Support Team
Running a business comes with a lot of moving parts, and having the right experts in your corner will make things much easier. The right support team can help you avoid costly mistakes, free up your time, and give you confidence in your business decisions.
Consult a Legal Advisor
A lawyer can help protect your business from the start by:
- Drafting and reviewing contracts
- Setting up shareholder agreements
- Registering trademarks
- Providing general business legal advice
If you have business partners, employees, or plan to sign client contracts, having a legal advisor is a smart investment.
Consider Hiring a Bookkeeper
Keeping your financial records organized is essential, but it doesn’t have to be your job. A bookkeeper can:
- Track and categorize transactions
- Reconcile bank accounts
- Prepare financial reports
- Ensure your records are tax-ready
If bookkeeping is eating into time you could spend on growing your business, outsourcing it can be a worthwhile decision.
Work with an Accountant
An accountant is one of the most valuable members of your business support team. Beyond tax filings, they can help with:
- Tax planning to reduce what you owe
- Payroll setup and compliance
- Financial strategy and cash flow management
- Guidance on salary vs. dividends and corporate structure
A strong financial foundation is key to running a successful business, and an accountant can help you build one.
At Avalon Accounting, we specialize in helping small business owners like you stay on top of their finances.
Whether you need help with bookkeeping, taxes, or financial strategy, we’re here to make things easier.
