Update: I am moving along with my plans and even have a preliminary date for the launch of a website and a paper. I am officially done today with really rough draft of my business plan (with all the ratios, costs and projected revenues). Financial part as it should took the most time. I must say that writing a business plan helped me organize my thoughts and move from just idea that I had before to a plan on how to execute this idea. I just wish I was writing this plan 6 months ago when I was still working to give an ample time to iron out every detail. Begining of the September is the one of the best time to launch a media product and now I am in a race against the time to get everything done by the middle of September.

In order to help out other new entrepreneurs in Canada I compiled a list of my reading that I thought is essential for anyone who wants to run business in Ontario and Canada in general. Here it is:

Governement of Canada publications:

• Circular 89-2R2 take a look on section 227.1 about Director’s liability. Just in case you were thinking that now when you have a federal corporation in Canada you can do anything you want.
• IT-291 Transfer of property to corporation - if you are planning to add some of your own equity into corporation you could do it without paying taxes.
• T4001 Employers Guide – Payroll Deductions and Remittances - of course you accountant will explain it to you, but I like to understand at least the basics by myself first. It is a bit complicated even for experienced mind like ours.
• T4032 Payroll Deductions Tables
  
• Government Assistance – General Comments : if you are planning to get subsidies from a government this is a must read
  
• Statement of business activities – this is how you are going to file taxes for a corporation, explanations on what is classified as business expense and revenue.
• Commencement of business activities - if you incurred expenses before the corporation was made and want to claim as an expense read this bulletin

Other Links:

• Interactive business planner – the good thing about this planner is that it is free and it calculates automatically cash flow, balanche sheet and income statement. It also provides lots of examples of existent business plans.
  
• One Stop Index for Canadian Small Business – lots of articles that make sense to unprepared readers.

I will be addidnt to list the more I dive into the business. I am expecting that soon another rollecoaster will start wich will be trying to sell the newspaper.

Disclaimer: I am not a lawyer and these series are just summarizing what I with my limited knowledge understood about creating and operating a media corporation in Ontario Canada. If you are interested in incorporating I suggest you to seek  professional help.

I mentioned on Monday that one of the first steps for me is incorporating. My reasons for creating a corporation are dead simple: limited liability, lower tax rate (very important in Canada and Ontario) and ability to raise capital. In Canada you can incorporate either under provincial ($338-$360) or federal law ($200-$250).Here is a nice table on federal vs provincial corporations.

I decided to incorporate under Federal law in order to be able to operate all over Canada and most importantly to eliminate a possibility of someone using my company’s name in another province. The downside of incorporating Federally is more stringent process for the name approval and you still have to register a corporation in every province it is engaged in business and to receive the permit and licenses.

Corporation needs a unique name or can be assigned a number. I obviously want to have a corporation with a name, so my process is a bit more complicated. The name needs to be unique, in English or French, representative of the business and not be very similar to competitors. You need to check the availability of the name and submit with incorporation papers by using NUANS® name search system ($20 per search) you can also use a third party for a fee that would make sure that your name has a chance to be approved. Furthermore, since people in Quebec like to do things differently than all Canada they are using different naming system called CIDREQ. While submitting CIDREQ report is not mandatory for incorporating it is your responsibility to check if your name is available in that province. Especially if you would like to do any business in Montreal.


My registered office for the corporatin will be my house in Vaughan, Ontario for now. So what else will I need to legally operate a media corporation in Ontario (assuming I am not building my own office):

1) Since advertising space is a taxable good I would need to obtain a Vendor Permit (RST) which will enable me to collect sales tax.  The application for a vendor permit is free.
2) Master Business License (MBL) – which is basically just a registration of the business in Ontario. As everything else registration of the business can be performed online and costs around $60.
3) Business Number (BN) – is a number from Canada Revenue Agency. You will receive the number when you will go through the federal incorporation.


It took me awhile to understand the process and what licenses do I need. The next post in these series will about me actually writting Articles of Incorporation and going ahead with the process. Obviously, my first step is finding the name. Which is not easy!

I will keep you posted on the name I chose. Questions? Comments? Did I get something wrong? Let me know!