Original Publish Date: Jan 5, 2023
Ontario is geographically in the middle of Canada and has the highest population out of all of the Provinces and Territories with almost 50% of the entire population of Canada.
Ontario is an amazing place to start a new business, not only because it has the largest population base but it also has the highest level of incomes and easy access in all directions by plane, train and transport. Ontario has 14 crossings into the US to make importing and exporting seamless. The busiest U.S. crossings in Ontario are at Windsor, Fort Erie and Sarnia.
The gross domestic product or GDP of Ontario for 2019 was $744 billion. Ontario has a large manufacturing imprint in Canada, and the service sector provides 76% of Ontario’s economy. Canada’s ‘Silicon Valley’ is Kitchener Waterloo with big name tech companies, where California and Waterloo, Ontario fight over the top talent for this industry.
If you wish to start your business in Ontario, we are here to help you.
To register a business in Ontario, the completion of the documentation is simple and available online 24/7. Whether you wish to open a Sole Proprietorship, General Partnership or add a business under an existing corporation, registering a business in Ontario gives you the opportunity to get a business underway. The Ontario government regulates the requirements and maintains the records of each registered business in Ontario.
Who Can Register a Business in Ontario?
If you wish to register a small business in Ontario as a Sole Proprietorship or General Partnership, there are no restrictions as to the individual status in Canada. The completion of the Master Business Licence under these options is provided under the Business Names Act in Ontario. You are not required to be a Canadian citizen or Permanent Resident, however it is important that the business has a physical address in Ontario. The business licence is required to be renewed every five years. If you are currently paying taxes personally in Canada, the registered business is taxed under your own personal income tax. If you are not taxed in Canada, it is best to contact Canadian Immigration to see if you can apply for a business.
Ontario Corporations no longer have a requirement for 25% of the directors needing to be Canadian citizens or Permanent Residents. This means that a non-Citizen is able to be the sole director of an Ontario corporation. The Incorporation is completed under the Business Corporations Act.
If foreign businesses wish to operate a business within Canada, an Extra Provincial Licence can be completed, where an existing foreign corporation can establish a corporation in Ontario by opening a branch division of the existing business.There is also the availability to register a Limited Liability Partnership or LLP in Ontario, however this type of registration is only accessible to professional individuals, such as Chartered Professional Accountants and Law firms. There is also the availability to register a tradename under existing corporations. If you have already incorporated a business and wish to operate a secondary business name under that corporate umbrella, you can register the tradename. The tradename is a separate registration from your existing Articles of Incorporation.
What Are the Pros and Cons to Registering a Business in Ontario?
When you register a business in Ontario, it’s called a Master Business Licence under the Business Names Act to register either the Sole Proprietorship for one person or the General Partnership for two or more people or corporations. This is less expensive than the alternative of completing an Ontario Incorporation or Federal Corporation to start your business. The registration is valid for a 5 year period before requiring renewal. By registering either the Sole Proprietorship or Partnership, you do not have name protection for the business name, the business is taxed under your personal income and the owners are liable for the business debts and any liabilities. However, it is a cheaper option than to incorporate in Ontario or Canada. Incorporating the business provides name protection for the corporation’s name and is a separate legal entity to you as an individual. These two items may hold significant grounds to whether you seek to register or incorporate your business.
The business structure is attached to you as an individual, so therefore you are personally taxed for the revenues of the business minus the expenses to operate the business. Each year you will file your personal tax return with the financials of your business included.
There is no limited liability to you as an individual when you register the business. If there are risks in operating your business where someone or something could be hurt or damaged, you risk your personal assets on behalf of the business.
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What Information is Required to Register?
The business registration itself is pretty simple, and we offer two options for turnaround times to have this completed – either standard 3-7 business days or rush same day processing. The details you will be required to provide are:
- The name of the business,
- Business address (business address is normally in Ontario),
- The names of the individual owner or owners and addresses (there isn’t a requirement for the individuals to have an residential address in Ontario)
- Additionally, you are required to provide a NAICS code for business activity and the accompanying description.
This allows you to operate your business for 5 years.
What If I Want to Use My Own Personal Name as the Business Name?
If you are starting your business using your own first and last legal names, you are not required to register a Sole Proprietorship. You cannot provide anything in the business name outside of your first and last name, such as a description of Sally Smith Cleaning. A General Partnership where there are two or more people registering the business, you are not able to use a personal name for the business. Although the Ministry does not require a business name registration if you are only using your legal name, you may want to check with your bank if you are opening a business bank account, to see if they would require the business to be registered.
How Do I Decide on a Business Name?
As stated earlier, the one significant drawback to registering your business name instead of incorporating is that you do not have name protection for the business. That being said, you want to find a business name that is unique and tells your customers what you do. You also want to ensure that you are not using a business name that is either common or used by corporations or trademarks. Both corporations and trademarks have protection for the business name. It’s important you don’t select a new business name that may be confusing or infringing to their rights to their protected name. In the event you do, you may at some point face litigation to address that name protection.
To help you find a name for your business and one that doesn’t interfere with existing businesses, the first thing to do is to think of a few names you like. Often people use a family last name, a coined or made up word, such as Xite instead of Excite, or a dictionary word that emphasizes what is being offered, such as 24 hour, speedy, professional or a geographical area, such as Ajax or London, especially when providing services. The second part of the name should include what you are doing, such as cleaning, digital media, construction. Clients don’t like guessing when searching for a business to assist them in something they want, so make it easy. When you finalize a few names, search the names in Google and see if any similar named businesses pop up. If the business has a website, they have most likely either registered or incorporated the same name.
As part of our service to register the business, you can also opt in to search the business name and have us search the NUANS pre search or preliminary search within the NUANS data bank. We are members of the NUANS system and are specifically trained to search your business name and variations to ensure the proposed name is available. Once you have a great name that is available, we take your information and complete the registration in Ontario. Once registered, you can open your business bank account, set up with suppliers or wholesalers, set up tax accounts and start your business.
Setting Up Your Business With Wholesalers or Suppliers
If you want to set up an account with a business you wish to use to support your business, they will want to see a copy of your registration as a Sole Proprietorship or General Partnership. This will assist you in obtaining discounted rates from the end customer. Without a registered business, it is unlikely that you will be able to receive discounted rates.
When Do I Have to Set up HST or Payroll?
You can opt in to set up HST, payroll or the Import/Export licence as part of your registration application with us. This makes it simple to have everything together in one place. You can search the business name, register the business and set up the necessary tax accounts all in one place. The HST is optional with Revenue Canada until the business earns $30,000.00 in revenues within the same year January to December. Sometimes, individuals will set up HST as soon as they register to gain the tax benefits of costs to set up the business or when the business will have business to business clients where often an HST number is required by other business owners. If you are starting a grassroots business and believe it will take some time to earn the $30,000.00, you may want to wait until your business meets this threshold before setting up the HST tax account.
Payroll is only required when you hire employees as a registered business. Until then, you are not required to set up this tax account.
Import and Export licence is only required when you will be shipping products over the border. If this is your intention, you may wish to obtain this account as your registered business is being set up.
What is a BN Number?
The BN (Business Number) is now issued by the CRA automatically for all new business registrations, including Sole Proprietorships and General Partnerships. The BN number acts as your tax number, and would be used to create any other CRA program accounts, such as HST registration. It typically takes between 1-2 weeks to have the BN generated and sent by mail for the new registration, however if you need it sooner, we can do a BN search to obtain this for you.
What Does a Registered Business Look Like?
The legal documentation is a one page form completed with the details you have provided including the business name, owner’s name and address, business activity and registered date and date of expiry which is 5 years from date of registration. The registration also includes the BIN number which is a 10 digit number exclusive to your registration. If you wish to change the registration, cancel or renew at any time, the BIN number is used to attach any update you do to your registration from the date it is issued.
How Long Does it Take to Get Your Business in Ontario Registered?
The registration process can be completed either as the standard 3-7 business day processing time Monday through Friday, or as a rush on the same day as long as the submission is received before 3pm. Once you have registered in Ontario, you are ready to begin your business.
When you are ready to register, Ontario Business Central is here to help! We have been assisting individuals to register their businesses since 1992, with lots of business resources available to assist you. Whether you wish to register or renew an existing Sole Proprietorship, or General Partnership, we are the leading company in Ontario to help you easily register your business. We will also email you to advise you when to renew your business so you don’t miss that crucial date to continue operating the business.
Register Sole Proprietorship or General Partnership
We also offer services to complete either an Ontario or Federal Incorporation with corporate supplies, including minute books, to help you organize your business incorporation. We can assist you in changing an existing registration or incorporation by offering services to help you as you go through your entrepreneurial journey.
Start your Ontario Incorporation
Start your Federal Incorporation
Choosing the right business platform is important. Our staff are always here to assist, and if you aren’t sure what type of business is best for your specific situation, it is always recommended to gain professional advice, such as an accountant for understanding your business finance needs and a lawyer to assist you with legal requirements for your Canadian business.
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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.