Incorporating is the easy part. Filing articles through the Ontario Business Registry takes an afternoon. What comes after is harder: the accounts, registers, filings and habits that make the corporation actually work. Most new owners slip here.
For a new Ontario corporation, the first year is less about profit and more about structure. Below is the roadmap we walk new clients through, roughly in the order things come up.
Month 1: Set up the foundations
The first few weeks set patterns that are hard to undo later.
- Open a corporate bank account. The corporation is a separate legal person. Its money goes into its own account, and personal spending stays out. Mixing the two is the most common first-year mistake, and one of the most expensive.
- Confirm your CRA Business Number. When you incorporate, the CRA assigns a Business Number with a corporate income tax (RC) account. Other program accounts, such as GST/HST and payroll, are opened separately when you need them.
- Build your minute book. This holds the bylaws, organizational resolutions, share subscriptions and registers of directors, officers and shareholders. Ontario corporations must also keep a register of individuals with significant control.
- If you incorporated federally, a federal corporation carrying on business in Ontario must also file with the Ontario Business Registry, generally within 60 days.
Months 1–3: Register for what applies to you
GST/HST
You must register once your taxable sales pass $30,000 in a single calendar quarter or over four consecutive quarters. Many new businesses register voluntarily from day one. That lets them recover the 13% HST paid on start-up costs through input tax credits, and clients often expect to see an HST number on an invoice anyway.
Payroll
If the corporation will pay anyone a salary, including you, open a payroll (RP) account before the first pay run. Source deductions for income tax, CPP and EI are remitted to the CRA, usually by the 15th of the following month for new employers. If you own more than 40% of the voting shares, your own salary is generally exempt from EI.
WSIB and Employer Health Tax
Most Ontario employers in covered industries must register with the WSIB within 10 days of hiring their first worker. Employer Health Tax applies to Ontario payroll, but eligible private-sector employers are exempt on the first $1 million of annual payroll.
Months 3–6: Decide how you will pay yourself
Owner-managers can take money out as salary, dividends or a mix of both. Each has consequences.
- Salary is deductible to the corporation and creates RRSP room and CPP entitlement. It requires payroll remittances and a T4.
- Dividends are paid from after-tax corporate profit, create no RRSP room or CPP, and are reported on a T5. They are simpler to run but not always cheaper overall.
- Shareholder loans are the trap. This is money you take out without calling it salary or dividends. If it isn’t repaid within one year after the end of the corporation’s tax year, it is generally added to your personal income.
There is no universal answer. The right mix depends on your personal tax bracket, your retirement plans and whether you want to keep profit in the corporation to reinvest.
Months 6–9: Keep the books monthly, not annually
A corporation that reconciles its bank accounts once a year at tax time is flying blind for eleven months. Set a monthly rhythm:
- Reconcile every bank and credit card account.
- Capture receipts digitally as you go. The CRA generally expects records to be kept for six years.
- Track HST collected and paid, so the return is a formality rather than a scramble.
- Review a simple profit and loss statement and balance sheet each month.
Months 9–12: Prepare for your first year-end
You pick a fiscal year-end for the corporation, and the first tax year can’t be longer than 53 weeks. As it approaches:
- Tax is due before the return is. The T2 return is due six months after year-end, but any balance owing is generally due within two months. Many Canadian-controlled private corporations that claim the small business deduction get three months.
- Know your rate. Up to $500,000 of active business income earned by a Canadian-controlled private corporation is taxed at a combined federal and Ontario rate of 12.2%.
- Plan for instalments. Once the corporation’s annual tax is more than $3,000, the CRA expects instalments. They usually start to matter in year two, so budget for them now.
- File the Ontario annual return. Each year, Ontario corporations file a short annual return with the Ontario Business Registry. Leaving it unfiled can eventually lead to the corporation being dissolved.
- Pass your annual resolutions. Approve the financial statements, appoint an accountant or waive the audit, and re-elect directors. Private corporations can usually do this by written resolution.
A first-year checklist
- Corporate bank account open, with no personal spending through it
- Minute book complete, including the significant-control register
- GST/HST registered, or a deliberate decision not to register
- Payroll account opened before the first salary
- Monthly bookkeeping and reconciliations in place
- Owner pay plan agreed with your accountant
- Year-end date, tax deadlines and annual return in the calendar
Where we come in
Local Ledger CPA helps newly incorporated businesses in Burlington and across Ontario set this up properly the first time, with bookkeeping, tax compliance and payroll under one roof. If you’ve just incorporated or are about to, a short conversation now costs less than untangling year one later.
This article is general information for Ontario business owners, current as of September 2026. It is not tax or legal advice. Rules change and every corporation’s situation is different, so speak with an advisor before acting on it.
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