Business Incorporation in Canada

Incorporation is the start of a structure, not the end

Filing articles of incorporation is the easy part. Doing it correctly so that the corporation is positioned for the small business deduction, owner-manager remuneration flexibility, future family-trust integration, eventual estate freeze, and possibly the Lifetime Capital Gains Exemption is the harder part. Many corporations are incorporated quickly to get a number, then have to be restructured years later (at significant cost) to fix share structure decisions made on day one.

BOMCAS Canada provides incorporation services with the structure already in mind. We file the articles, set up the share classes, register the corporation with CRA for all required accounts (corporate income tax, GST/HST, payroll, import/export as needed), set up the initial bookkeeping, and walk you through the first-year compliance calendar.

Federal vs provincial incorporation

Federal incorporation under the Canada Business Corporations Act (CBCA) gives the corporation the right to carry on business under its name in every province. Federal corporations still must register extra-provincially in each province where they actually do business. Federal incorporation is often preferred for businesses with national reach, online businesses, and businesses that want maximum name protection.

Provincial incorporation (Alberta Business Corporations Act, Ontario Business Corporations Act, BC Business Corporations Act, etc.) is simpler when the corporation operates in a single province. Provincial incorporation has slightly lower ongoing fees and is the most common choice for owner-operated small businesses operating in one province.

Share structure — the most important first-year decision

The right share structure depends on your goals: a single shareholder with no family involvement may need only one class of common shares; a family corporation may need multiple voting and non-voting share classes for future income splitting and estate freeze flexibility; a corporation planning to bring in investors may need preferred shares with specific rights. Getting the share structure right at incorporation is much cheaper than fixing it later through corporate reorganizations.

What’s included in an incorporation engagement

• Name search (NUANS report) and approval coordination
• Federal CBCA or provincial articles of incorporation filing
• Share structure design (with input from tax counsel for complex structures)
• Initial directors’ resolutions, shareholder resolutions, share issuance, and bank-account-opening resolutions (in coordination with legal counsel for full minute book maintenance)
• CRA business number (BN) registration
• CRA corporate income tax account (RC) registration
• CRA GST/HST account (RT) registration if applicable
• CRA payroll account (RP) registration if applicable
• Extra-provincial registration in provinces of operation (for federal incorporations or out-of-province operations)
• Initial chart of accounts setup in QuickBooks Online or Xero
• First-year tax planning conversation including salary-vs-dividend, year-end selection, and owner-manager compensation
• Corporate compliance calendar (T2 due date, GST/HST frequency, payroll remittance frequency, annual return filing dates)

What Canadian businesses commonly miss about this service

Across the hundreds of Canadian businesses we work with, the same handful of issues come up repeatedly. Many small business owners delay engaging professional accounting until a crisis: a CRA review letter, an unfiled GST/HST return demand, a denied bank loan because financial statements aren't ready, or a Notice of Reassessment that arrived weeks ago. By the time we are first contacted, the cost to fix the problem is often several times what proper ongoing accounting would have cost from the start. Proactive engagement is dramatically cheaper than reactive cleanup.

The Canadian tax landscape also changes constantly. Recent changes that affect most Canadian taxpayers include the 2023 anti-flipping rule (residential real estate sold within 365 days is automatically business income, not capital gain); the Underused Housing Tax (UHT-2900 annual filing requirement for many corporations, partnerships, and trusts holding residential property even when no tax is owing — with $5,000 to $10,000 per-property failure-to-file penalties); the Quebec QST joint registration changes since 2021; the post-2018 Tax on Split Income (TOSI) rules that effectively eliminated casual income splitting through family dividends; the post-2021 $200,000 stock option vesting limit on the 50% deduction for options granted by non-CCPCs; the CSRS 4200 Compilation Engagement standard replacing the older Notice to Reader engagement; and ongoing CRA increased scrutiny on pre-construction assignments, short-term rental businesses, and cash businesses.

How BOMCAS Canada delivers this service

Every engagement begins with a written, fixed-fee engagement letter signed before any work is performed. The engagement letter describes exactly what is in scope, what deliverables you will receive, when those deliverables are due, what your monthly or project fee is, and what (if anything) is outside scope. This eliminates the hourly-billing surprise that most accounting clients fear. The only time we use hourly billing is for genuinely unpredictable items such as CRA audit response or complex one-off projects — and even then we agree to a maximum cap before starting.

Once the engagement letter is signed, you e-sign the CRA authorization (RC59 for businesses or AUT-01 for individuals), and we onboard you to the encrypted client portal with multi-factor authentication. All document exchange flows through the portal — no emailing of sensitive financial documents. Meetings happen by video conference or phone at times that work for you, including outside normal business hours when needed.

Our Canadian tax compliance philosophy

BOMCAS Canada is structured around four operating principles:

1. Tell the truth. If a tax position is aggressive, we say so. If a deduction will not survive a CRA review, we say so. If the engagement is going to cost more than originally quoted because the scope changed, we say so before doing the work.
2. Bill what we said we would bill. No surprise invoices. No scope-creep billing. If something legitimately changes scope, we discuss it and re-quote before doing the additional work.
3. Answer the phone. One-business-day response standard on client communications during normal business hours. No voicemail backlogs.
4. Specialize. Canadian tax and accounting is too complex to be a generalist. We do not do US-only tax, UK tax, or any other foreign jurisdiction in isolation. We are Canadian. Our cross-border work is always anchored by deep Canadian compliance.

What ongoing engagement with BOMCAS Canada looks like

For most clients, the ongoing relationship is structured around predictable monthly deliverables. For an incorporated small business client, that typically includes: monthly cloud bookkeeping with full bank and credit card reconciliation; quarterly or annual GST/HST returns prepared and filed; monthly payroll for owner-managers and any employees, with CRA source deduction remittances; year-end Compilation Engagement (CSRS 4200) financial statements; T2 corporate income tax return; owner-manager T1 personal tax return (and spouse where applicable); annual salary-vs-dividend optimization with written recommendation; unlimited email and phone support during business hours; one quarterly check-in call to review numbers and discuss the business; and CRA correspondence handling for routine review letters.

For a personal tax client, the ongoing engagement includes: annual T1 preparation; any required Quebec TP-1 (for Quebec residents); CRA pre-assessment and post-assessment review response when CRA requests additional documentation; Notice of Assessment reconciliation; and proactive tax planning conversations during the year about RRSP, TFSA, and FHSA contributions, major life events (marriage, kids, retirement, real estate), and any planned business or investment changes.

Frequently asked questions about engaging BOMCAS Canada

Why Canadian businesses choose specialized accounting over generalist accounting

The Canadian tax and accounting landscape has become significantly more complex over the past decade. The 2018 TOSI rules, the 2021 changes to stock option taxation, the 2022 mandatory reporting changes for trusts, the 2023 anti-flipping rule, the Underused Housing Tax, the changes to the small business deduction phase-out for passive investment income, the new CSRS 4200 Compilation Engagement standard, the continued expansion of digital sales tax rules, and the ongoing post-COVID CRA focus on cash businesses and unreported income have all required accountants to specialize more deeply. A generalist firm trying to cover personal tax, corporate tax, US tax, real estate, trusts, cross-border, and every industry vertical inevitably falls behind on the depth of expertise that any one client needs.

BOMCAS Canada is structured deliberately to maintain depth: we are Canadian-only by design; we work in industries where we have genuine specialized experience; we maintain ongoing professional education in Canadian tax law; we use Canadian-experienced staff at every level; and we coordinate with specialized partners (US-licensed cross-border, legal counsel for corporate restructuring, audit-engagement licensed practitioners) where required rather than trying to handle everything in-house.

Talk to a Canadian accountant

Call 780-667-5250 or submit the contact form. We respond within one business day and provide a fixed written quote before any work begins.

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