If you are searching for how to register a business in Ontario, Canada. Don’t worry. We’ve got you covered.
It is well known worldwide that Ontario is Canada’s richest market and is often referred to as the 14.5 million business center, which represents 38.3% of Canada’s population. Ontario also produces the country’s highest personal income.
In this article, you will find a brief guide on how to start a business in Ontario. However, it is important to remember that four types of legal entities run a business: sole proprietorship, partnership, company, or cooperative.
Each structure has different and significant credit, tax, and succession implications. Let’s figure out which type best suits you.
1. Sole Proprietorships
Ontario Sole Proprietorships Registration is governed by Section 14 of the Business Names Act (Ontario).
It is sometimes also called the Ontario Trade Name. An easy way to do business is to own a single type of business that is owned and operated by a single business.
Any person may act as a sole proprietor under their name as long as there is no official definition of other types of business such as Ltd. or Inc.
The great edge of a sole proprietorship has to stop it, and managing it all is not easy and inexpensive.
One owner may disclose their business income in their income tax form (called “their own) instead of completing a separate tax return as anyone would have to do when choosing a business ownership type. However, on the negative side of using single ownership, personal debt can be a major disadvantage.
1.1 Choose a business name or brand name
If anybody wants to run his business under his own name, there is no need to register a business name.
However, it will operate under a different name, and the name must be registered with the Department of Production and Consumer Services at the Department of Government and Consumer Services.
It should be noted that under the Ontario Business Names Act, a fine of up to $ 2,000 may be levied on a person who fails to register or register any misleading or false information.
Considering that a person has chosen his business name to appear alone, which sounds appealing, and will also attract the attention of customers or potential customers, it is very important to learn how to select a legal business name.
There are some words and expressions that are not allowed to be used. For further reference, Service Ontario includes the information required when words and expressions are prohibited from being part of a unique identifier.
1.2 Research the usability of your selected name
By registering a business name, there is no guarantee of diversity. One will need to register the same trademark. The following are several ways to do a word search:
1.3 Service Ontario Integrated Business Services Application
- This search covers Ontario only and charges between $ 8 and $ 26 per report. The Advanced Business Name Search feature can also detect and reduce suspicion if someone is already using the selected business name.
- Government of Canada NUANS company search engine website. NUANS is an integrated search tool for business names and trademarks. A powerful algorithm is used by this tool to extract a list of names and trademarks that are identical to or similar to a search term.
- Searching for NUANS will result in a list of companies/companies, business names, and registered trademarks such as the person you searched for. The fee for using this business name research method is $ 13.80 per report.
After the business name has been selected and the name search is used using the tools mentioned above, the foundation is set to go through registering a real business to register single ownership or partnership.
1.4 The registration process of the Business name
Initially, to register a business, the following information needs to be provided:
- The name and address where the business is conducted.
- Details of business activity.
- The name and address of the sole proprietor who will provide official posts and letters.
- A valid email address if registration happens by email.
After registration, a Master Business License (MBL) can be used as proof.
1.5 How to register a sole proprietorship or partnership?
There are various ways to register a business in Ontario, some of which are:
- Online registration with Service Ontario will cost about $ 60 to renew or register. The MBL will receive an email within two business days after a successful registration. It must be borne in mind that a person can complete other relevant online forms such as a sales tax exemption permit (only if required), Employer Health Tax, and Occupational Safety and Insurance Board.
- By using the Canada Revenue Agency Online Business Registration service. In addition, a person can continue registering for other required CRA accounts, such as salary deductions or GST registration.
- Finally, through the Department of Production’s public office, Personal Verification Forms are available at the branch or local Land Registry Offices throughout the province. The registration fee for a business name is $ 80. The same can be done online.
However, if the registration is done in person, one can get the MBL immediately, and it can take up to 20 business days if the same is done online. Finally, it is compulsory to renew the MBL every five years.
1.6 Sign up for other related certificates, licenses, and registrations
The person must conduct their business according to provincial and state law, meaning they may need to apply for workers’ compensation insurance or collect GST / HST.
A business license can also be a requirement, but it depends on the type of business the person is conducting. The different types of business registration you need can be accessed here.
Ontario Cooperative Registration is governed by Section 15 of the Business Names Act (Ontario) and the Co-operatives Act. A partnership is a business organization involving two or more people as its owners.
The country’s laws govern the partnership; therefore, a new partnership is registered with the state where it will conduct business.
Each partner has a share in the gain and loss (according to the agreement) that may make joint decisions.
Together, partners are taxed and not a business. Therefore, partners should pay taxes as equity they have in the partnership but with their tax returns.
The following are the steps for registering a partnership:
2.1 Decide on the type and other details of the partnership.
Different types of partners are part of a cooperative firm, such as a limited credit partner, a leading partner, a sleeping partner, or an equity partner.
The most common types in Ontario are joint or limited bond partnerships. Limited credit partnerships must be registered in terms of the Limited Partnership Act.
2.2 Decide on a partnership name.
Partners should decide on a non-registered name for the type of partnership they will form after the same discussions.
For example, in the case of an LLP, the word must also include “LLP” in terms of Section 15 (1) (i) of the Business Names Act for identification.
2.3 Partnership registration with your state
This is where a person registers their business as a partnership.
It is required that all cooperation be registered by visiting the website of the Secretary of State of the country and referring to the business or corporate category. Many provinces offer a place to complete this online registration.
2.4 Obtaining an Employer ID
Employer ID Number (EIN) can be obtained from the IRS after determining the business name, type, and location.
Almost all businesses need an EIN, even if they do not have staff to pay. Getting an EIN online can be described in detail here or by phone, and you can get the number quickly.
Another thing to note is that the IRS will never charge this. Therefore, the employer should also be aware of fraudulent application websites.
2.5 Partnership Agreement
A cooperation agreement lays the foundation for all business between our partners.
Rights, liabilities, principles, the scope of work, and various other important categories are included to form a solid foundation for the business to operate.
The Co-operatives Act undermines and includes provisions relating to the nature of the cooperative (Sections 2-4) and cooperative relationships with partners under Sections 6-19.
And cooperative relationships with each other under Sections 20-31. In order to draft a well-established partnership agreement, the service of any contracted attorney should be available.
2.6 For other licenses, registration is required
- For sales tax, if a person is in the business of selling taxable goods or services, they must register with the state tax officer.
- Registration is required to pay government taxes using the EFTPS payment system. This registration is required in order to pay employment taxes if the individual partnership has employees.
- Filing a false name (DBA for “doing business as”) is registered with your city or region.
- A person must register locally to obtain business permits and relevant licenses, depending on the partnership’s business activities.
3. Organization or Company
There are pros and cons in consolidating a business, and one should include it in your locality or country.
Establishing an organization in the province will create the only legal entity in the province of Ontario and protect the rights of the individual organization and name in Ontario only.
However, state consolidation may allow a business owner to operate anywhere in the country with a protected name throughout Canada.
To register a company in Ontario, one has to follow the following steps:
3.1 Choose a name for your organization
The procedure is the same as in the case of a sole proprietorship or partnership, i.e. termination of use means that the business is affiliated with the Crown.
Government of Canada, province or region, municipality, Crown agency, government, or municipality without the written consent of the relevant authority.
3.2 Word search
These searches are performed by a Record Seeker, which guarantees no other person running a business or registered trademark with the same or similar name as the person of choice.
However, this approach can be avoided if the business owner uses a company with a number. The current NUANS report and application for inclusion should be provided.
3.3 Articles of Incorporation (AOI) —P Form 1 under the Corporate Companies Act
In Section 4 of the Companies Act, one or more persons or bodies of business or any combination thereof may co-ordinate an organization by signing the terms of compliance and compliance with Section 6 of the Act.
The compiler will submit to the Director the input articles. Upon receipt of the articles, the Director will authorize that, by Section 273, a certificate that will include a certificate of inclusion.
The Facilitator shall submit to the Director the articles of association and any other required documents and information.
Upon receipt of the articles, documents, and information, the Director shall approve the titles, following Section 273, with a certificate. For installation.
The certificate of support proves that the company was placed under this Act on the date set for the certificate without the procedure under Section 240 for canceling the certificate for a reason.
But you can do the same thing online as well. Any of the following service providers may be utilized to complete the AOI online:
One can buy business application forms from attorneys, official bookstores, or even search engines if one wants to use paper forms.
3.4 Cover book
This is used to identify the name of the organization and its victims, the organization’s return address, and the organization’s contact number.
The cover letter must also be completed online if someone is registering electronically.
The application must include the completed version of AOI, cover letter, current NUANS name search, NUANS reference number, and NUANS date and fees.
The application can be submitted directly. It can also be posted to the Production and Certification Services Department or the Office of International Registration.
Both methods require a $ 360 registration fee. The fee is $ 300 plus the principal service provider fee if the application is completed electronically.
Additional documentation may be required, but the same depends on the opinion of the attorney who was appointed to this procedure.
A coalition is a legally constituted business owned and controlled by its Member Association. The cooperative can enter into contracts under its business name.
The main advantage is that the debt of each cooperative member is limited by the level of value they own in the individual’s position. The Companies Act governs all legal provisions relating to cooperatives.
You can only formalize your business as a cooperative if your business is organized as and will be run as a co-op in the Canadian Cooperatives Act.
As discussed above, the process is the same for a company to register a federation.
To understand the exact definition of a cooperative, the requirements for integration, the terms and conditions of membership, the required funding structure, the formation of the board of directors, and the specific provision of services one can obtain. Click here.
4.2 To register a Cooperative business form, the following documents are required:
- Cover letter from the applicant stating all the information required to complete the application.
- Information on whether the Canadian-based federation is a non-profit housing cooperative or a trade union.
- Complete the signed version and PDF of Corporate Business Integration Articles (Form 3001).
- Registered Business and Information Office on the first Board of Directors (Form 3002).
- Nuans Name Search Report: This should be provided to indicate to the appropriate authorities that the necessary steps have been taken by the company involved in the search and retention of your name.
- An authorization letter must be attached if Corporations Canada has already approved the name.
- The filing fee must be paid as required.
- Like companies, the Co-operative can also apply by email or post.
The type of business the owner decides to operate in will determine everything. This should be determined even before the business name is selected. It is a very important decision that forms the foundations we will work on.
However, it is important to remember that the type of business ownership can be changed depending on the circumstances at any given time.
It is common for small businesses to start as owners and become corporations over time after making a mark in a particular sector.
if you are operating your business as a sole proprietorship under your legal name. You will need to register your business with ontario government if it is. Existing business or small business can claim up to $300 cash back when you open an RBC Business Bank Account within 60 days of incorporating with Ownr.
For some accounts, they help with personal tax returns and help you get faster loans approvals for any business registration process. An easy way is to choose one of the forms discussed in this article based on your current circumstances and remember to review the decision from time to time.
Frequently Asked Question
1. What is the most crucial component needed to establish the business regardless of type?
It is very critical to say that one must hire the services of a lawyer to register with the government or the state.
Having a lawyer is like holding a parachute on your back that will prevent business owners from falling on their faces.
The licensed attorney will ensure that all agreements, licenses, registrations, and requirements are complied with the laws of the country/organization and keep the business owner free from potential future issues regarding matters.
2. Why is it important to Renew your business name after five years?
It is very important to keep track of and remember that business name registration must be renewed after five years. The Canadian government does not send any reminder notifications, so re-registration is the business owner’s responsibility.
In addition, if the business name or business ownership changes at any time, the person must re-register the business name, at which point the registration fee must be paid.