Meeting business compliance requirements in Ontario can seem overwhelming. In addition to requirements related to your specific business and operations, there are ongoing business compliance requirements related to your corporation to keep it in good standing.
Compliance issues range from preparing annual resolutions, ensuring the government has the most up-to-date information related to your corporation, filing your corporate and other tax returns, employee remittances and making sure you have the necessary permits and licenses to operate your business.
That’s a lot to think about, so we’re going to try and give you some ideas and resources to help manage this. Understanding your obligations and where to go for information will make things a little bit easier.
Where to Find Compliance Information
There is so much compliance information that a short-and-sweet guide cannot cover it all. We’ve compiled a list of useful links. They’ll help you gather much more of what you need to know.
Canada Business Ontario: This page provides a start-up guide for businesses, covering topics such as hiring employees and provides a searchable database of licenses and permits that may apply to your specific business, including for example: tobacco regulations, accessibility, product labelling, e-business and much more. In a separate section on this page, you will also find links to tax information as well as copyright, patent and trademark information.
Business Corporations Act (Ontario): If want to get it straight from the “horse’s mouth”, check out the Ontario corporate statute here. After 5 minutes with this, you’ll probably want to give us a call 😊
MaRS entrepreneur toolkit: This page provides free resources to help entrepreneurs launch and grow their business. You should also check out MaRS information on startup accelerators and incubators which programs provide mentorship, funding, networking, training and/or office space for startups.
Common Compliance Missteps
Businesses can easily run afoul of compliance requirements and often do. Here’s a summary of some common compliance issues.
When it comes to ongoing corporate compliance, corporations often find themselves scrambling to update their minute books prior to an audit or in connection with bank financing. Maintaining your minute book by holding annual meetings or passing resolutions instead of those meetings, properly approving the payment of dividends or bonuses and updating the Ministry of Government Services about changes to the directors, officers and registered office of your corporation will help keep your company in good standing. Remember your minute book tells the “corporate story” of your company.
Hearing the word tax can put anyone in a bad mood, but understanding your tax requirements and the different taxes that apply in your scenario, can make the notion of taxes less painful. Whether you’re paying corporate income taxes following your fiscal year end, remitting payroll deductions or HST, when it comes to taxes, knowing is really half the battle.
- Corporate Income Taxes. You need to prepare your corporate tax return and file your corporate taxes each year. Make sure you’re working with an accountant who can help you maximize your deductions and ensure that you're taking advantage of all the available tax benefits. Most notably is the “small business deduction” which effectively brings your corporate tax rate down to 15% or so on the first $500K of income (there are some qualifications here, so again, you probably want to speak with an accountant).
- HST. If you are an HST registrant, you have to collect and remit HST. There may be some exceptions if you’re selling to customers outside of Ontario. The information on this page should help.
- Payroll taxes. If you’re paying employees (which could also include yourself as an employee of your company), you have to pay and remit payroll deductions each month. CRA provides a number of resources to help you do your payroll remittances properly.
So, you’re running your business, it’s growing and you need some help. Once you start hiring people for work, a determination is made about whether the individual is classified as an independent contractor or an employee. The question is not necessarily your choice. There are a number of factors that need to be taken into account prior to you characterizing someone as an independent contractor vs. an employee such as whether they work full time, have control over hours and days of work, work for other people or exclusively for one person and whether they need to supply their own tools and equipment.
Compliance gives your business a lot to think about. Even with all the resources out there, sometimes it helps to have someone on your team to make sure you’re doing it right. Contact our team with any questions, or for help with business compliance.