What does it mean to incorporate a business in Ontario?

Incorporating a business means creating a separate legal entity — a corporation — that is distinct from you as an individual. In Ontario, a corporation can own property, enter contracts, sue and be sued, and carry on business in its own name. You, as a shareholder, are generally not personally liable for the corporation's debts beyond what you invested.

When you incorporate, you receive a certificate of incorporation and a corporate number. The corporation then issues shares (usually to you, initially) and elects directors to manage its affairs. Even a single person can be the sole shareholder, sole director, and sole officer of an Ontario corporation.

Incorporation is not mandatory — many businesses operate as sole proprietorships or partnerships — but it brings significant advantages in liability protection, tax planning, and business credibility. Whether it makes sense for your situation depends on your income, risk exposure, and growth plans. Speaking with a business lawyer and an accountant before you incorporate is a practical first step.