It is common for small business owners to look at incorporation once their business has seen some success. Whether you’re looking to reduce your liability, access tax benefits, or bring on additional shareholders/investors, incorporation could be your next step as a business owner.
A misconception among entrepreneurs is that there is an “evolution” or “transition” process when you want to incorporate your sole proprietorship. The reality is, there is no transition process from a sole proprietorship to incorporation. The corporation is a new legal entity, so you will need to incorporate from scratch.
This article will help you take the appropriate steps to ensure you successfully incorporate.
If you already have an Ownr account, you can select "add new company" from the dropdown menu at the top of your Ownr dashboard, and then click “'new”, as you are creating a new entity. The fees for incorporation won't change even though you have a sole proprietorship registered. You can close the sole proprietorship directly with the government afterwards if you wish.
Should you choose to incorporate using the same business name as your sole proprietorship, you must sign a consent form to allow you to carry this forward.
Follow the steps below when creating the new corporation with the same name:
1) In the Name Confirmation page type in the exact business name that matches your Sole Proprietorship. A message will pop-up stating "There is an exact match... If you have a NUANS... click here" at the bottom of the screen. Select “click here”.
2) A window will appear with a drop-down menu, choose "Business under this name."
3) Sign the Trade Name Consent document
Once completed, you will have confirmed that you are the current owner of the business name. Your consent will be submitted to the government for their review. Please note that the naming rules for corporations are more strict than for sole proprietorships, so there is no guarantee that you will be able to incorporate with the exact same name.
Once this is completed, you will be able to enter information about the directors, officers, and shareholders in your corporation, choose a plan that fits your needs, and submit your incorporation to the government!