Incorporating a business in Ontario means choosing between provincial and federal incorporation, filing your incorporation documents through the Ontario Business Registry, and completing your post-incorporation tax setup — a Business Number, HST registration, payroll accounts, and your first federal T2 corporate income tax return. Ontario has no director-residency requirement, charges a single 13% HST instead of separate GST and PST, and is in the middle of a 2026 small-business corporate tax rate cut that newly incorporated companies should factor into their planning from day one. This guide walks through each step.
Step 1 — Decide: provincial (Ontario) or federal incorporation
Both an Ontario incorporation and a federal incorporation under the Canada Business Corporations Act (CBCA) create a separate legal entity with limited liability, but they differ in name protection, director rules, and where you register.
| Factor | Ontario (provincial) | Federal (CBCA) |
|---|---|---|
| Governing statute | Ontario Business Corporations Act | Canada Business Corporations Act |
| Filing authority | Ontario Business Registry (ServiceOntario) | Corporations Canada |
| Federal incorporation fee (2026) | N/A | $200 online |
| Name protection | Ontario only | Across all of Canada |
| Operating in other provinces | Must register extra-provincially in each | Must register extra-provincially in each (including Ontario) |
| Director residency requirement | None | At least 25% of directors must be resident Canadians |
| Registered office | Must be in Ontario | Registered office in Canada + Ontario extra-provincial registration if operating there |
As a rule of thumb: if you operate only in Ontario, incorporating provincially avoids the extra layer of federal annual filing plus an Ontario extra-provincial registration. Choose federal incorporation if you want nationwide name protection or plan to operate across several provinces — though even a federal corporation must still register extra-provincially in Ontario to do business there. For the current Ontario government filing fee, check the Ontario Business Registry directly, since government fees are updated from time to time.
Founders comparing provinces can also see our incorporating in Alberta guide and incorporating in BC guide for the equivalent steps and cost structures elsewhere in Canada.
Step 2 — Choose your corporate name (or a numbered company)
You can incorporate with a distinct name or as a numbered company (e.g., "1234567 Ontario Inc."), which skips the name-approval step entirely. A named Ontario corporation generally requires a NUANS name search report confirming the name is not confusingly similar to an existing business, submitted as part of your incorporation filing. A numbered company is faster to set up; a named corporation is usually preferable for branding, and you can register a trade name later if you want to operate under a different brand than your legal name.
Step 3 — Prepare your incorporation documents
An Ontario incorporation is built on a small set of founding documents, filed through the Ontario Business Registry:
- Articles of Incorporation — sets out the corporation's name, registered office address, share structure, and initial directors.
- Initial Return / Notice of Change — filed to establish the corporation's registered office and director information on the public record.
- Corporate records — minute book, share register, and director/officer registers you maintain going forward, even though they are not filed with the province at incorporation.
You decide your share structure, appoint at least one director, and set your registered office address in Ontario. Because Ontario has no Canadian-residency requirement for directors, founders based outside Canada can incorporate in Ontario provided the company maintains the required registered office.
Step 4 — File through the Ontario Business Registry
Ontario incorporations are filed online through the Ontario Business Registry, the province's self-service portal for business filings. Once your Articles of Incorporation are filed and accepted, you receive a Certificate of Incorporation and an Ontario corporation number. From that point, keep your corporate records current and file the annual filings the Ontario Business Registry requires to keep the company in good standing — these are registry filings, distinct from your tax returns.
Step 5 — Complete your post-incorporation tax setup
Incorporation is the legal step; these are the tax and payroll accounts that follow:
- Business Number (BN) and CRA program accounts. Your federal Business Number anchors corporate income tax, HST, and payroll accounts.
- Corporate income tax — the T2. An Ontario corporation files a federal T2 return; Ontario's corporate income tax is administered together with the federal return by the CRA, so there is no separate provincial corporate return, unlike Alberta's AT1. As of the 2026 tax year, Ontario's combined small-business rate is falling from 12.2% to 11.2% on July 1, 2026, alongside a rise in Ontario's own small-business limit from $500,000 to $600,000 — see our Ontario corporate tax guide for the full rate breakdown, including the hybrid $500,000–$600,000 band that results.
- HST registration. Register once your taxable revenue exceeds $30,000 over four consecutive calendar quarters. Ontario's harmonized sales tax is 13%, and unlike BC's PST, HST paid on business inputs is generally recoverable through input tax credits (ITCs) for registrants, much like GST works federally.
- Payroll. If you pay yourself a salary or hire employees, open a payroll account and remit CPP, EI and income tax withholdings. Ontario also levies the Employer Health Tax (EHT), exempt on the first $1,000,000 of Ontario payroll — a threshold most newly incorporated companies will not reach right away, but should plan for as headcount grows. See our Ontario EHT guide for the full rate structure.
HST vs BC's PST: why the difference matters for a new corporation
A founder deciding between Ontario and a PST province should understand one structural difference clearly: Ontario's 13% HST is a single, largely recoverable tax for registered businesses — you collect 13% on sales and claim ITCs for the HST you paid on eligible business expenses, so it functions much like GST. British Columbia instead runs 5% GST plus a separate 7% PST, and PST paid on most business inputs is not generally recoverable, making it a real embedded cost. This is one reason the sales-tax mechanics, not just the headline rate, matter when comparing where to incorporate and operate — see our GST/HST/PST guide for Canadian business for the national picture.
How RN Canada helps
RN Canada is an accounting and advisory firm headquartered in Edmonton, with a Vancouver office, serving Ontario and Toronto-area founders remotely from our head office. We help you choose between provincial and federal incorporation, structure shares with future financing and income-splitting in mind, and stand up your T2, HST, payroll and EHT accounts correctly from the start — including planning around Ontario's July 1, 2026 small-business rate and limit change. Our founder, Ozgur Duymaz, holds the CPA (Canada), ACCA (UK), and CMA (US) designations. Learn more about our tax return preparation service, estimate corporate tax with the corporate tax calculator, and see how we serve businesses in Ontario and Toronto.
Frequently asked questions
If you operate only in Ontario, a provincial Ontario incorporation is usually the simpler and cheaper option to maintain. Federal incorporation under the CBCA gives nationwide name protection but requires at least 25% of directors to be resident Canadians and still needs an extra-provincial registration in Ontario if you operate there. Ontario has no director-residency requirement, so many founders — including newcomers — incorporate provincially.
Ontario charges a single harmonized 13% HST rather than separate federal GST and provincial PST. Registered businesses collect 13% on taxable sales and claim input tax credits (ITCs) to recover the HST paid on business inputs, similar to how GST works federally — unlike BC's PST, which is largely not recoverable by the businesses that pay it.
An Ontario corporation files a federal T2 corporate income tax return — Ontario's corporate tax is administered together with the federal return, so there is no separate provincial return like Alberta's AT1. Set up a Business Number and CRA program accounts for corporate income tax, HST once taxable revenue exceeds $30,000, payroll if you hire, and register for the Employer Health Tax once your Ontario payroll exceeds the exemption.
No. Ontario removed its director-residency requirement, so a corporation incorporated under the Ontario Business Corporations Act can have directors who are not Canadian residents, provided the company maintains a registered office in Ontario. This differs from a federal CBCA corporation, where at least 25% of directors must be resident Canadians.
Ontario's small-business corporate tax rate is falling from 3.2% to 2.2% effective July 1, 2026, and Ontario's own small-business limit is rising from $500,000 to $600,000 on the same date, while the federal limit stays at $500,000. A newly incorporated Ontario CCPC earning under $500,000 in active business income benefits from the lower combined rate as soon as it takes effect.
Once your total Ontario payroll exceeds the $1,000,000 exemption in a calendar year, you must register for and pay the Employer Health Tax on the excess, at graduated rates topping out at 1.95%. Employers whose Ontario payroll tops $5,000,000 lose the exemption entirely and owe EHT on the whole payroll. A newly incorporated company with modest initial payroll will not owe EHT until it grows past that threshold.