A co-operative (co-op) is a type of incorporated business that is owned by a group of people (known as members) with common needs and/or a common goal.
Some other differences include:
Before you set up your co-operative, you may want to create a business plan that describes your organization, your objectives and your goals.
For copies of sample business plans, call the Business Info Line:
Co-operatives are set up as either federal or provincial corporations. Your needs, the needs of the members and the business location can help you determine which option is best for your co-op.
If you plan on opening a location(s) only in Ontario, you may choose to incorporate your co-op provincially.
There are three major parts of applying for provincial incorporation:
For more information and to access forms, contact the FSCO or visit their website.
If you plan to open business locations in two or more provinces, you may choose to incorporate federally.
To incorporate federally, you need a minimum of three members who are at least 18 years old, of sound mind and not bankrupt.
The main steps involved in setting up a federal incorporation are:
For more information and to access forms, contact Corporations Canada or visit their website.
Contact Corporations Canada:
Create/Maintain a Corporation
Your business may need licences and permits from the federal, provincial and municipal levels of government.
In addition to the information you will find in this guide, you can use BizPaL—an online search tool—to find licences and regulations that may affect your business. You can also contact the Business Info Line to speak to someone about starting your business.
Permits and Licences Wizard
Contact the Business Info Line:
You can also get information on some of the regulations that may affect your co-op from the following organizations:
Find information on the Co-operative Corporations Act in FSCO’s guide for co-ops and learn about how it may affect your organization.
Legal Requirements for Ontario Co-ops
If you are starting a credit union, contact DICO for information on general regulations and deposit insurance.
Insured Credit Unions
A co-op's start-up capital often comes from the co-operative shares that are purchased by members. To explore other options for funding that may be available, the following tools and searches are available:
Canada Business can help you find government financing options for your business. There are programs that apply to businesses across Canada, and others that apply only to businesses in Ontario. Use the Canada Business financing search tool or browse by type of financing.
You can also access Canada Business information through the ONe-Source online financing wizard. The wizard guides you through 3 easy steps to create a personalized list of results for Ontario business financing programs.
Contact the Business Info Line:
You can find Ontario-specific assistance for your business including advice, financing options, tax incentive programs and more using the Ontario government’s free online directory of support programs for business.
The OBPG provides:
Ontario Business Program Guide
Co-operatives are generally responsible for the same taxes as other corporations. All corporations must file a corporation income tax (T2) return every tax year even if there are no taxes payable.
T2 Corporation Income Tax Guide
Most corporations can file their return electronically using the Internet. Filing online is mandatory for certain types of corporations with annual gross revenues over $1 million.
Corporation Internet Filing
It is also important to know which taxes to charge, collect and remit on the goods and services you sell. In Ontario, you may need to set up an account for Harmonized Sales Tax (HST).
Your Business Number is your single account number for dealing with the federal government regarding taxes, payroll, import/export and other activities. If you plan to hire employees, or if you will be importing and/or exporting products or services, you must register for a business number.
If you sell goods and services in Ontario, you may need a business number to charge, collect and remit the Harmonized Sales Tax (HST). Most businesses that make less than $30,000 in any 12 month period are not be required to register for HST; however, you can register voluntarily and claim input tax credits. Speak with the Canada Revenue Agency (CRA) for more information.
Business Number Registration
Information on taxation is provided as a general guide. Consult an accountant or financial professional for more specific information on tax requirements for your co-op.
There are many associations that may be of interest to you. It is not necessary to join an association, but some of the advantages include:
Examples of associations include, but are not limited to:
You can also find books, magazines and other relevant print material at business service organizations in your community. To locate a Canada Business Ontario (CBO) community partner, contact us through the Business Info Line at 1-888-745-8888.
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.
Some of the organizations listed above are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages.