Starting a business in Ontario can be an exciting and rewarding experience, but it can also be a daunting task if you are not familiar with the registration process.
In this guide, I will provide a comprehensive overview of the steps involved in registering a business in Ontario, Canada.
Step 1: Choose a Business Name.
The first step in registering a business in Ontario is to choose a name for your business. The name must be unique and not already registered by another business in the province.
You can search the Ontario Business Name Database to check if the name you want is available.
If the name is available, you can reserve it for 90 days by filing a Name Reservation Request with the Ontario government. This can be done online through the ServiceOntario website or by mail.
Step 2: Determine Business Structure.
The next step is to determine the legal structure of your business. In Ontario, the most common types of business structures are sole proprietorship, partnership, and corporation.
A sole proprietorship is a business owned and operated by one person. It is the simplest and least expensive business structure, but the owner is personally responsible for all debts and liabilities of the business.
A partnership is a business owned and operated by two or more people. The partners share the profits and losses of the business and are personally responsible for the debts and liabilities of the business.
A corporation is a separate legal entity from its owners, and the owners are not personally responsible for the debts and liabilities of the corporation.
Incorporating a business involves additional legal and administrative requirements, but it offers more protection and flexibility than a sole proprietorship or partnership.
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Step 3: Register Your Business.
Once you have chosen a name and determined the legal structure of your business, you must register it with the Ontario government. The registration process varies depending on the type of business structure you have chosen.
Sole Proprietorship: If you are operating as a sole proprietorship and using a name other than your own, you must register your business name with the Ontario government. This can be done online through the ServiceOntario website or in person at a ServiceOntario centre.
Partnership: If you are operating as a partnership, you must register your business name and partnership agreement with the Ontario government. This can be done online through the ServiceOntario website or in person at a ServiceOntario centre.
Corporation: If you are incorporating your business, you must file Articles of Incorporation with the Ontario government. This can be done by following the steps seen below:
• Conduct a name search to ensure your chosen name is available and meets the requirements for a corporation. The name must be unique and distinctive, and it cannot contain any prohibited words or phrases.
• Prepare Articles of Incorporation, which outline the details of your corporation, such as its name, address, and purpose.
• File the Articles of Incorporation with the Companies and Personal Property Security Branch (CPPSB) of the Ministry of Government and Consumer Services. You can file the documents online or in person at a ServiceOntario center.
• Pay the required filing fee. The fee varies depending on the type of corporation and the number of shares issued.
• Once your corporation is approved, you will receive a Certificate of Incorporation.
Step 4: Obtain a Business Number.
All businesses in Canada are required to have a Business Number (BN) issued by the Canada Revenue Agency (CRA). The BN is a unique nine-digit number used to identify your business for tax purposes.
If you are incorporating your business, you can obtain a BN as part of the incorporation process. If you are operating as a sole proprietorship or partnership, you can register for a BN online through the CRA website or by calling the Business Window at 1-800-959-5525.
Step 5: Register for any necessary permits and licenses.
Depending on the nature of your business, you may need to obtain permits and licenses from the Ontario government or other regulatory bodies. Some common types of permits and licenses include:
• Business licenses
• Environmental permits
• Health and safety permits
• Alcohol and tobacco licenses
• Professional licenses
You can search for the permits and licenses you need on the BizPaL website, which provides a comprehensive list of permits and licenses required by federal, provincial, and municipal governments.
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Step 6: Register for Taxes.
As a business owner in Ontario, you will likely need to register for various taxes. Here are some common tax registrations:
a) Goods and Services Tax/Harmonized Sales Tax (GST/HST): If your business earns more than a specified threshold, you must register for GST/HST with the Canada Revenue Agency (CRA). You can register online or by mail.
b) Payroll Taxes: If you have employees, you need to register for payroll taxes, including the Canada Pension Plan (CPP), Employment Insurance (EI), and income tax deductions. Register for a Payroll Account with the CRA
c) Ontario Employer Health Tax: If you have employees who physically report for work at your permanent establishment in Ontario, are attached to your permanent establishment in Ontario or do not report to work at any of your permanent establishments (for example, they work from home) but are paid from or through your Ontario permanent establishment, you have to pay the Ontario Employee Health Tax.
Step 7: Business Bank Account and Finances.
Open a business bank account to keep your personal and business finances separate and set up a bookkeeping system to track income, expenses, and taxes.
Also, consult an accountant or bookkeeper to ensure compliance with tax regulations and financial management.
Step 8: Insurance.
Consider obtaining business insurance to protect your assets and mitigate potential risks associated with your business activities.
Step 9: Employees and Human Resources.
If you plan to hire employees, familiarize yourself with Ontario’s labor laws and employment standards. Also, register for an Employer Identification Number (EIN) with the Canada Revenue Agency (CRA).
Step 10: Business Name Protection.
Consider trademarking your business name and logo to protect your brand and intellectual property.
Step 11: Ongoing Compliance and Reporting
Understand your ongoing reporting requirements, such as filing annual returns, financial statements, and corporate tax returns. Also, stay informed about changes in regulations or requirements that may affect your business.
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Originally posted on May 1, 2023 @ 6:18 pm
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