This article is for informational purposes only and does not constitute legal, accounting or tax advice. The information contained herein is subject to change and may vary from time to time in your region. For specific advice applicable to your business, please contact a professional.
Every year, thousands of new businesses enter the marketplace in Canada, with the vast majority choosing to register a business in Ontario. In fact, more than one-third of all Canada’s small and medium-sized businesses are located in Ontario, according to Innovation, Science and Economic Development Canada.
Regardless of the industry you’re in, or whether you’re creating a sole proprietorship or partnership, this step-by-step guide will help you on your start-up journey. From where to begin to choosing a name, read on to learn more about how to register a business in Ontario.
Regardless of the industry you’re in, or whether you’re creating a sole proprietorship or partnership, this step-by-step guide will help you on your start-up journey. From where to begin to choosing a name, read on to learn more about how to register a business in Ontario.
The benefits of registering a business in Ontario
Canada is a great place to grow and start your business. However, Ontario is a particular hotspot, it seems, as it’s home to some of the nation’s highest personal incomes. Here are a few key reasons why people decide to register a business in Ontario.
Every year, thousands of new businesses enter the marketplace in Canada, with the vast majority opening in Ontario. In fact, more than one-third of all Canada’s small and medium-sized businesses are located in Ontario.
However, during the last few years, as COVID-19 seemingly put a stopper on business growth and creation, you may feel like starting up a new venture is something to put on hold. However, this is not the case, with the market still crying out for new and exciting companies. If you are interested in starting your own small business, there are a couple of key steps to take to ensure current and future success.
Regardless of the industry you’re in, or whether you’re creating a sole proprietorship or partnership, this step-by-step guide will set you on your start-up journey. From where to begin, to choosing a name, read on to learn more about mastering the art of the start-up.
The Benefits of Starting a Small Business in Ontario
Canada is a great place to grow and start your business. However, Ontario is a particular hotspot, it seems, as it’s home to some of the nation’s highest personal incomes. Here are a few key reasons why people decide to register a business in Ontario.
| Business Benefit | Details |
|---|---|
| Market attractiveness | Ontario’s GDP is the highest in Canada, which indicates a strong economy. High population density (about 16 million residents) offers the potential for a large local customer base. |
| Simple business registration | Registering a business online is simple through the Ontario Business Registry. Registration fees range from $60 to $300 depending on the type of business. |
| Access to support services | From funding to mentorship opportunities, there are several resources available to help small businesses and entrepreneurs. |
| Favourable tax rates over $500k income | Ontario has the lowest corporate income tax rate in Canada for companies that generate over $500,000 of active business income. It also offers a provincial tax rate of 3.2% for small businesses, applicable to the first $500,000 of active business income. |
Where to start: What business type is right for you?
Before you think about registering your business, you will first need to decide whether you’d like to operate as a sole proprietorship, partnership, limited liability partnership or corporation.
This is an important step, as each option comes with potential pros and cons. The right choice depends on your unique business needs and goals.
Sole proprietorship
A sole proprietorship is simple, low-cost and easy to start. It’s owned by one person operating under their own name or a business name. With a sole proprietorship, you report business income and losses on your personal tax return. You can write off business losses against other income, which allows you to remain in a lower personal income tax bracket as you get your business off the ground. However, once your business grows, this can become a drawback, as personal income tax rates are higher than corporate ones. Another major downside of a sole proprietorship is the fact that you’re fully liable for your business. If your business incurs debt or you get sued, your personal assets could be at risk. This structure is ideal for freelancers, solopreneurs and other small, low-risk businesses.
Partnership
A partnership is similar to a sole proprietorship, but it involves two or more owners. It’s a simple structure that allows you to pool resources and skills, which can alleviate start-up costs and help your business grow faster. With a partnership, each partner reports their share of business income and losses on their personal tax return, which offers similar tax advantages and drawbacks as the sole proprietorship. The main downside is shared liability: all partners are legally responsible for the actions of the business as well as its debts and losses. This can create risks in the event of disagreements – finding the right partner and having a written agreement is crucial. If you have a co-founder and a solid shared vision, a partnership may be the right choice for you.
Corporation
A corporation is a legal entity that separates a business from its owner(s). One of its main advantages is that it provides limited liability protection. This means that you and any other shareholders are not personally liable for most business debts. Other benefits include lower tax rates and the ability to transfer ownership so you can sell your business or shares of it. A corporation also gives you more access to capital and grants. You can incorporate your business provincially or federally. The latter gives you the option to operate in any province or territory and protect your business name across Canada. Regardless of your choice, a corporation comes with a bigger administrative load. It entails more complex tax rules and the need to provide annual filings and corporate records. It’s also more costly to set up. However, if scaling and protection from liability are priorities, incorporating can set the foundation for long-term growth.
Ontario Limited Liability Partnership (LLP)
This hybrid structure combines some of the benefits of a corporation and a partnership. It allows partners to operate jointly while maintaining some degree of legal protection. In an LLP, each partner is responsible for their own actions – you can’t be held liable for the debts of other partners. This type of structure is often used by service providers such as lawyers and accountants.
Other business structures
Other business structures include the Extra-Provincial Limited Liability Partnership (LLP) and the Ontario Limited Partnership (LP). The former is relevant if you have an LLP previously registered in another province. The latter involves at least one general partner who takes on all operational control and liability, and at least one or more partners with limited liability and no active role in the company’s daily operations. This structure is best when passive investors are involved. Visit the Ontario Business Registry for a full list of ownership structures and their filing requirements.
How to create and register a business name in Ontario
Setting up a business is not all rules and regulations though –this is the fun part. You’ll have to choose a name — which will need to be registered if you use any title other than your own legal name. Failing to do so can result in a significant fine, as stated under the Ontario Business Names Act.
Get creative and do your research. You need to make sure your business name is unique, yet not too vague and also immediately displays your brand aesthetic. You can find out more on how to create the perfect name for your business here.
It’s important to understand what you can and can’t call your business regarding potential legal ramifications. For example, you cannot name your business anything that’s associated with any branch of government in Ontario. To register your business name in Ontario, follow these steps:
- Determine registration requirements. If you are operating a sole proprietorship under your legal name or a partnership under the legal names of the partners, you don’t need to register your business name. In all other scenarios –including adding a word like “consulting” to your legal name, registration is necessary. Find out if your desired name is taken. Look it up on Canada’s Business Registries for free or the Nuans Canadian corporate names and trademarks database (the cost of a federal name search is $13.80). This report will provide you with a list of all corporate names and trademarks across Canada (excluding Quebec) that are similar to your intended name. It is valid for a total of 90 days, so it gives you plenty of time to decide and register your company title. .
- If you plan to incorporate your business, name registration is included in the incorporation process Otherwise, the registration of trade names is a provincial/territorial responsibility.
- Head to the Ontario Business Registry services page and follow the instructions to register a bsiness name for a sole proprietorship or a firm name for a general partnership.
- For further brand protection, consider registering a trademark, which provides exclusive rights across Canada.
How much is it to register a business in Ontario?
Depending on the name search you conduct, this step will cost you between $0 and $13.80, followed by a $60 fee to register your business name for a sole proprietorship or general partnership (the same cost applies when you renew) or $300 for a corporation.
If, at any point, you are unsure whether your business name is already in use, or would simply like to ensure due diligence, a public record search is recommended.
How to register a business in Ontario
Following the creation of your chosen name, you’ll need to undertake the business registration process.
To do so, head to ServiceOntario, where you will find all the information you need to register a business in Ontario.
To begin, you’ll need your name and the address of your company. You will also need to be able to provide a description of what your business intends to do in relation to its activity – what products will you be selling? What services will you be providing?
Your name and home address will also be required and, if you are registering a partnership with ten or fewer partners, you will also need to provide each partner’s full name and address.
At the end of the business registration process, you will receive your Master Business Licence (MBL). This will act as proof that your business is registered if you ever need to seek assistance from a financial institution.
The steps for sole proprietorships and partnerships are generally the same, while corporations have additional requirements. The checklist below for the different business types can help you stay on track.
How to register a sole proprietorship and partnership business in Ontario
- Check business name availability (unless you’re using your legal name).
- Select your business structure.
- Prepare contact information and payment details.
- Register through the Ontario Business Registry. You will be prompted to create a My Ontario Account and a ServiceOntario Account during set-up. As of February 1, 2025, all businesses registered in Ontario must use a nine-digit Company Key to manage their business online.
- Receive an Ontario Business Identification Number (BIN).
How to register your business as a corporation in Ontario
It’s important to note that a corporation is unique in comparison to a sole proprietorship or partnership. One of the most distinct differences is based on the fact that corporations act as separate legal entities — which is particularly beneficial in terms of liability. Corporations also benefit from certain income tax advantages.
If you would like to register as a corporation, you will need to:
- Conduct an Ontario-biased Nuans name search report if you choose a custom name instead of a numbered corporation. This must be conducted by a private name search company – federal Nuans name searches aren’t accepted.
- Incorporate your business, which will require you to obtain articles of incorporation.
- Obtain a federal business number, as well as a corporation income tax account through the CRA.
- Register as an extra-provincial and/or extra-territorial corporation if you plan to do business in other Canadian jurisdictions.
- Apply for any specific business and tax permits or licences that are required for you to operate.
You can find out more on the Government of Canada site.
Once you’ve dotted the ‘I’s and crossed the ‘t’s, you’ll be registered for five years. After that period, you’ll have to repeat the process again to renew your business.
Please note: It is your responsibility to ensure that your business is up-to-date. However, if you are slightly late when it comes to renewal, it’s typically possible to renew your registration within 60 days after it has expired.
Licences or certificates to be aware of
Depending on the type of small business you plan to operate, you may be required to seek other associated licences, certifications, or registrations.
For example, you may need an environmental or a zoning permit, or a municipal business licence. The key is understanding what will be required of your business based on provincial and federal laws. Once again, an example would be knowing when you need to register a GST/HST number or whether you need to register for Workers’ Compensation Insurance.
Here’s an overview of commonly required licences in various industries.
| Licence | Description |
|---|---|
| Food premises licence | Required for food establishments to ensure health and safety compliance. |
| Liquor license | Required if you serve alcohol and issued by the Alcohol and Gaming Commission of Ontario (AGCO). |
| Health inspection | Regular inspections based on public health regulations. All food businesses and businesses that offer personal care services are subject to health inspections. |
| Signage permit | Required when installing business signage. |
| Personal services business licence | Required for businesses that offer personal care services, such as spas, hair salons and tattoo shops. |
Costs and requirements vary by city, but the BizPal tool can help you determine the permits and licences needed for your business.
Creating a successful marketing and business plan
Congratulations, the ‘hard’ part is over! You’ve successfully registered your small business and are ready to start tackling trade. However, you’ll want to start to research and learn some key strategies in relation to your specific business model, to help your small business operate and grow successfully.
Some of these areas include legal requirements, how to manage cash flow, a marketing strategy, and payment processing.
To ensure that all your ducks are in row, you’ll want to create a solid business plan and take action accordingly. This business plan guide will help you create a business plan that will allow you to concentrate on what matters most in terms of success and growth. It’s also important to make sure that your strategy is personal to your small business – there is no ‘one size fits all’ approach to marketing. Although, we’d love it if that were the case.
Products and software to help you get started
It’s important to know that you’re not on your own when starting up your small business. In today’s world, amazing tech and software can make the processes of trade and management as natural as brushing your teeth in the morning.
Square has been helping millions of sellers run their businesses, learn new tactics, and has changed how companies conduct their business in Ontario and Canada as a whole.
Whether you’re onsite or on the go, Square hardware allows you to take payments anywhere and everywhere. Starting up and taking your business online doesn’t have to be a huge leap. The Square Point of Sale (POS) software allows you to manage key aspects of your small business in one place, while you continue to grow your company and overall brand.
Some of the main benefits of Square include:
- Gaining access to your money quickly with our Business Mastercard.
- Access and manage payments all in one place.
- Obtaining real-time data that will help drive key business decisions.
- High security based on multiple layers of encryption.
If you’re ready to take your idea to the next step, it’s time to register your small business and work towards your evolving goals.
For more information on key growth strategies, be sure to check out these resources.