If you currently operate a business, it would be either as an incorporated business or a Business Licence such as a Sole Proprietorship, General Partnership or Partnership
When you own an incorporated company
If you own an incorporated company in any Province or Territory in Canada, you can complete a secondary business name under the corporation (corporate umbrella). This allows you to use a secondary business name to your corporate name. An example to assist is as follows:
The corporate name of: Margaret’s Bakery Inc.,
Carrying on business as: Margaret’s Cupcakes.
This allows the business owner to use, operate and obtain payments for both business names. The incorporated business solely has name protection, the carrying on business name, also known as tradename or DBA name does not have name protection. This is an important item to consider with the carrying on business name.
If you own a Federal or Canada incorporated company, the carrying on business name cannot attach directly to the Federal Incorporation however all you need to do is register your Federal incorporation in the Province where the business operates within and then you can complete the carrying on business name under the Provincial registration for your Federal corporation.
An example of how the Federal incorporation with the carrying on business name works is as follows.
You have Federally incorporated a business as Terry’s Lawncare Inc. and you operate in Ontario, you would register the Federal corporation in Ontario (if this hasn’t already been completed when you initially incorporated) and, you would obtain an Ontario corporate number for the Federal incorporated company and, then you can attach the carrying on business name to the provincial side of the filing.
When you own a Sole Proprietorship, General Partnership or Partnership
If you operate a Sole Proprietorship, General Partnership or Partnership in any Province, these registrations do not have the ability to operate a secondary business underneath these existing businesses however you can operate a secondary business by registering another Sole Proprietorship, General Partnership or Partnership. In doing this, you will operate 2 completely separate businesses with separate bank accounts, separate HST, payroll etc. This may be an opportunity for you to position to consider looking at incorporating one of the businesses and operate the secondary business as a carrying on business under the corporation.
How does taxation and banking work with the second business?
If you have registered the carrying on business name under your existing incorporation, the secondary business will be added to your existing corporate bank and tax accounts. This applies to any tax accounts you have set up for the incorporated company such as HST or payroll. The carrying on business name falls under all accounts established by the corporation including the corporate tax account and therefore the revenues provided by the secondary business name will be filed with the incorporated company. You may want to invoice the secondary business separately to assist to keep track of the revenues and separate expenses for this business. It may also assist if at some point you would like to look at selling one but not both businesses to a third party.
Banking and taxation for a Sole Proprietorship, General Partnership or Partnership would fall under the individual owners of the business, the same as the original business in operation. The existing HST, payroll and any other accounts cannot be shared by the new business with the existing business registration. You may need to set up a new and secondary HST, payroll and any other accounts such as WSIB under the new business.
After speaking with a number of accounting professionals, it seems the overall consensus is when the business or businesses earn more than $80,000.00, it may be recommended to speak to an accounting professional about the option to incorporate one of the businesses and operate the secondary business under the newly formed incorporated company. There may be tax advantages to changing to an incorporated company.
I hope you find this blog informative. We, at Ontario Business Central have been assisting thousands of individuals every year to set up and expand their businesses.
We would be more than happy to assist you to either add a carrying business name under your existing corporation or to register a secondary Sole Proprietorship or General Partnership
If you would like to register a carrying on business name under your incorporation with us, here are the links to complete with our office.
- Ontario Tradename
- British Columbia Tradename
- Alberta Tradename
- Saskatchewan Tradename
- Manitoba Tradename
If you wish to register another business registration which is not under an existing corporation with us, here are the links to do so
- New Registration – Ontario
- New Registration – British Columbia
- New Registration – Alberta
- New Registration – Saskatchewan
- New Registration – Manitoba
Our team would love to help you register a tradename or new small business. We have assisted entrepreneurs over the last 25 years to make these types of registrations. If you have any questions, please feel free to reach out to our staff for additional information and assistance.
Office Hours: 9:00am – 5:00pm
Monday – Friday E.S.T.
Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.