When you want to receive protection as a Newfoundland & Labrador business owner by separating your business finances and liability from your personal finances and liability, incorporating your business is one of the best options.
Going through the extra work to incorporate a business may not be the right choice for every business, but it’s worth it in the right circumstances.
Here are some tips and information that you can use to try to help you decide whether you should incorporate, as well as the steps required to incorporate.
What Is an Incorporated Business in Newfoundland & Labrador?
When creating a corporation in Newfoundland & Labrador, you are creating an entity that is separate and distinct from the personal holdings of the owner or owners.
Those who are the owners, or shareholders, of the corporation are not risking their personal and financial resources, other than any resources they specifically provide to the business.
If the corporation fails and owes money to other businesses or people, those who are owed money typically cannot go after the personal financial holdings of the corporation’s shareholders.
Additionally, if someone sues the corporation for whatever reason, the shareholders’ personal holdings typically cannot be part of the damages awarded in the lawsuit.
As another aspect of incorporating, each owner of the company receives shares in the company equal to the owner’s percentage of ownership. (A corporation can have a single owner, too.)
By using shares to signify the percentage of ownership, the owners can sell their shares or bequeath them to others. Some corporations want to offer their shares for sale to the public on a trading stock exchange.
What If I Don’t Want to Incorporate My Business in Newfoundland & Labrador?
Three different business structures are permissible in Newfoundland & Labrador.
If you choose a sole proprietorship or partnership, the legal requirements to manage the business are far less complex than with a corporation. You also don’t have to register your sole proprietorship or partnership with the NL provincial government like you do with a corporation.
Only the corporation allows for the separation of the finances and liability of the owners and the business, though. With a sole proprietorship or partnership, your personal finances and liability are also part of the finances and liability of the business.
Are There Benefits to Incorporating My Newfoundland & Labrador Business?
Incorporating your business has a number of benefits in Newfoundland & Labrador, along with a few disadvantages.
You have the option of incorporating your business on a federal level through the federal government website instead of incorporating in Newfoundland & Labrador.
With the federal incorporation, you receive protection for your business name throughout Canada. However, you still must register in Newfoundland & Labrador to be able to operate your incorporated business inside the province.
Newfoundland & Labrador allows you to register with the province at the same time that you incorporate federally, saving time in the registration process. Only a few Canadian provinces give you this dual-registration option.
How Soon Do You Have to Incorporate Your Business in Newfoundland & Labrador?
The provincial government in NL does not give you a deadline for incorporating your business. Some business owners in the province choose to operate under a different business structure for a while before going through the incorporation process.
How Much Does It Cost to Incorporate a Newfoundland & Labrador Business?
The costs associated with registering and incorporating your Newfoundland & Labrador business in the province depend on how you are registering.
If you are incorporating with share capital, you pay $300 for a paper filing and $270 for an online filing. If you are incorporating without share capital, the cost is $70 for a paper filing and $63 for an online filing. (These costs are subject to change at any time.)
You also must pay $10 to reserve your proposed name with the provincial government. NL corporations must pay an annual filing fee of $75 as well.
Should you choose to make use of a third-party incorporation service to help you with the filing and to file the incorporation forms for you, you would have fees beyond what you must pay to the government.
Company Formations charges an extra $129.99, for example. Although that seems like a steep fee, if you are unsure what you should do to incorporate, hiring third-party help may save you money in the long run by helping you avoid errors.
Companies that can help you with the registration and incorporation process in Newfoundland & Labrador include:
Another option is to hire an attorney to help you complete the forms required for incorporation and to help you with the filing process. Because setting up a corporation requires quite a few legal documents, you may want to hire an attorney, even if you don’t need help with the filing process.
How Long Does It Take to Incorporate in Newfoundland & Labrador?
The provincial government does not specify how long the incorporation process will take from the time you file your forms to when you receive a decision.
Third-party companies say that the processing time for an incorporation in NL could take anywhere from one day to 15 business days.
Should you have an error in your filing forms, you may have to resubmit them, which lengthens the time to complete the corporation process.
Articles of Incorporation for Newfoundland & Labrador Businesses
You must submit the Articles of Incorporation to register your business as a corporation in Newfoundland & Labrador. The Articles of Incorporation require information including:
5 Steps to Incorporate a Business in Newfoundland & Labrador
To incorporate your Newfoundland & Labrador business, use the following steps.
The NL provincial government will either send you acceptance of your incorporation request or denial. If you receive acceptance, you are ready to begin operating as a corporation. If not, you would have to resubmit any forms that have errors.
Consider hiring an attorney to help with the incorporation or partnering with a third-party company that helps with incorporating your company.
Options for Incorporating Your Business in Newfoundland & Labrador
You have a couple of options for submitting your forms of incorporation.
The fastest way to complete the submission of your incorporation forms is through the CADO website, which is part of the Digital Government and Service NL website.
If you would prefer to submit your forms in person, by mail, by fax, or by email, you should contact the NL Registry of Companies. The primary office is in St. John’s.
If you prefer to submit in person, you should call the Registry of Companies, because you may need to set up an appointment time.
Required Forms to Incorporate a Business in Newfoundland & Labrador
When incorporating your business for the first time, you need to complete the Articles of Incorporation. If you are incorporating with share capital, you must complete Form 1. If you are incorporating without share capital, you must complete Form 1a.
When a company incorporated in NL has share capital, it needs to file an annual return on Form 23. However, if the incorporated company in NL does not have share capital, it should file its annual return on Form 29.
Other forms companies commonly need in Newfoundland & Labrador, regardless of whether your corporation has share capital, include the Notice of Registered Office and the Notice of Directors.
If you believe you need other forms, the Digital Government and Service NL has links to dozens of other corporate forms in a PDF format.