Why should I incorporate in British Columbia?

Overview — what incorporation means

Thinking about turning your side project or small business into something more official? Incorporation is often the next step for entrepreneurs who want to separate their personal life from their business, open up growth options, and build something that lasts beyond the founder. In simple terms, incorporation creates a legal “person” — a corporation — that can sign contracts, own property, and be held liable in its own name rather than the names of its owners.

That change may sound technical, but its effects are practical: incorporation can protect your personal savings if the business faces debts or legal claims; it can make it easier to bring on partners or investors by issuing shares; and it can create a structure that survives changes in ownership or management. However, incorporation also brings formal duties: record-keeping, periodic filings, and certain director responsibilities that require time or professional help.

In short, incorporation can unlock opportunity and protection, but it also introduces rules and recurring tasks. The right choice depends on your business goals, risk tolerance, and whether the benefits outweigh the added complexity and costs.

Key benefits

• Limited liability: Owners (shareholders) are generally not personally liable for the company’s debts and legal obligations beyond their investment.
• Business continuity: Corporations continue to exist even if ownership or directors change, which helps with long-term planning and transfers.
• Access to capital: It can be easier to raise funds from investors or issue shares under a corporate structure.
• Tax and financial planning: Corporations and individuals are taxed differently; in some cases incorporation enables tax planning strategies (consult an accountant for specifics).
• Credibility: Many customers, suppliers, and lenders view incorporated businesses as more established and trustworthy.

Important considerations

• Costs and fees: There are upfront filing fees and ongoing costs (e.g., annual reports, corporate minute books, accounting). See official fee lists for up-to-date amounts.
• Administrative requirements: Corporations must keep corporate records, file annual reports, and maintain required director/officer information.
• Director duties and governance: Directors have statutory duties under corporate law — failure to meet obligations can have legal consequences.
• Not always the best choice: For very small, low-risk sole proprietorships the added complexity and cost may outweigh the benefits. Consider your business goals and seek professional advice if unsure.

Basic incorporation steps in BC (high-level)

1. Decide federal vs provincial incorporation: You can incorporate federally (Corporations Canada) or provincially in BC. Each has different rules about name protection and where you can operate. See Corporations Canada for federal options.
2. Choose and reserve a name (if applicable): You may request a name approval through the BC Name Request system or follow guidelines if using a numbered company name.
3. Prepare incorporation documents: Typical items include articles, registered office address, and director information.
4. File the incorporation application online: In BC this is commonly done through Corporate Online / the Business Registry.
5. Obtain business numbers and CRA accounts: After incorporation you will typically register for a Business Number, GST/HST account, payroll accounts (if you have employees), etc.
6. Maintain ongoing compliance: File annual reports, maintain minute books, and update director/office changes as required.

For the official BC step-by-step guidance and filing options consult the government resources linked below.

Official resources (BC & Canada)

• BC Government — Incorporated companies (overview): https://www2.gov.bc.ca/gov/content/.../incorporated-companies
• Corporate Online (BC) — File an Incorporation Application / Corporate Online portal: https://www.corporateonline.gov.bc.ca/
• BC Registries & Online Services — forms, packages, and fees: Official forms & fees
• Corporations Canada (federal incorporation information): https://www.corporationscanada.ic.gc.ca/
• Start your business — BC Government (general small business guidance): Start your business in BC

Where to get help

Official registries and on-line filing systems provide instructions; if you need tailored legal or tax advice, consult a qualified lawyer or accountant. For registry-specific questions you can contact BC Registries and Online Services (contact details on the government pages above).

Quick checklist if you’re considering incorporation

• Do you want to limit personal liability?
• Do you plan to raise money or add investors?
• Can you manage the ongoing administrative and accounting requirements?
• Have you considered tax implications with an accountant?