Ontario is often touted as Canada’s business hub, with the state generating the country’s highest personal income. So it isn’t surprising that thousands of new businesses enter the Ontario marketplace annually. If you, too, are thinking of starting your entrepreneurial journey and registering a business in Ontario, it is a great place to start. Not only will you get access to an excellent market and favorable tax rates, but you’ll also benefit from a simple and inexpensive registration process.
However, before registering your business in Ontario, there are several things you need to be aware of. Here’s a step-by-step guide to help you get started.
Types of Business Registrations in Ontario
Before starting your business in Ontario, you need to understand the type of legal entity you want to register. There are mainly four types of business structures under which you can register your new business:
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Sole Proprietorship
It is the simplest form of business owned and operated by a single person responsible for all assets and liabilities. You can start a sole proprietorship under your name and pay personal income tax on the earnings rather than a business tax.
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General Partnership
A partnership is formed when two or more people come together to start a business. The partners jointly take all the decisions and share the profit and losses arising from the business as per the partnership agreement.
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Limited Partnership
While you are personally liable for debts in a general partnership, a limited partnership limits your liability based on your investment in the business.
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Corporation
Another option is to register as a corporation. A corporation has a legal entity that is separate from the owner. Only lawyers, accountants, or other regulated professionals can incorporate a business.
Steps to Register a Business in Ontario
Step 1: Naming Your Business
One of the first steps to registering a business in Ontario is to find a distinct business name. Though Ontario does not prohibit non-corporates from having the same name, it’s always better to have a unique one. This way, you can avoid confusion and stand out from other brands.
So how do you find a unique name for your business? One way is to use Ontario’s Enhanced Business Name Search to ascertain that no other business is already registered with the name you’re planning.
On performing the search, you will be provided with a report stating whether or not a match has been found. The service is available Monday to Friday (excluding holidays) from 8:30 am to 6 pm.
You can also check for trademarks with the Canadian Intellectual Property Office (CIPO) for additional security. Their NUANS database contains trademark information for businesses all over Canada.
Step 2: Restriction on Name Use
When deciding on a name for your business, there are a few restrictions that you have to be mindful of:
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- The name should not contain obscene or objectionable words or expressions
- The word ‘college,’ ‘institute,’ or ‘university’ can be used only with special permission from the Ministry of Education
- The name should deceive regarding the type of business. For instance, ‘LLC,’ ‘Limited,’ or ‘Corporation’ cannot be used for a sole proprietorship.
- Using another individual’s name without their permission is prohibited.
- The name should not imply an association with a government body
You may not be granted registration, or your registration may be revoked if you do not comply with these restrictions.
Step 3: Registering Your Business in Ontario
Once you’ve selected a name, the next step is to register your business with the government of Ontario. The Ministry of Government and Consumer Services manages business registration in Ontario.
You’ll need to submit the following documents to the Central Production and Verification Service Branch of the government to get registered:
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- The name and address of your business
- The principal place of business
- A valid email address
- The name and address of the owner or partners of the business (P.O. Box number is not acceptable)
- A short description of the nature of your business or the activity you intend to conduct
- The person authorising the registration (if you are registering the business on someone else’s behalf)
Once the registration is complete, you will receive a Master Business License (MBL) in Ontario with a Business Identification Number (BIN). The BIN is a nine-digit unique number that identifies your business from others. It is valid for five years.
Step 4: Registering for Additional Licenses and Certificates
Depending on the nature of your business, you may be required to apply for additional business licenses in Ontario. Some common examples are environmental permits, municipal business licences, and worker’s compensation insurance.
Again, as your sales soar, you may be required to collect federal goods and service tax (GST) or a harmonised sales tax (HST). For that, you’ll need to create a GST or HST account. The key is to understand your provincial and federal laws and seek additional registrations accordingly.
Ways to Register Your Business in Ontario
There are three ways of registering a business in Ontario- online, by mail, or in person.
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Online
Online is the fastest and easiest method of registering a business in Ontario. You only need a valid email address and a Visa or Mastercard to pay the registration fees. You can use the Integrated Business Service Application portal for online business registration. Online registration is open 24/7. Upon completing the registration, you will receive a temporary MBL which can be used for starting a business in Ontario immediately.
The final MBL will be sent to your email address within two days. If you don’t provide a valid email id, you will receive the same through postal mail within ten business days.
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By Mail
Another way is by registering the business by mail. For that, you will have to fill out Form 1 and attach an $80 cheque to it in favour of the Minister of Finance. The mail should be addressed to the Ministry of Government and Consumer Services, Central Production and Verification Service Branch.
It can take anywhere from six to eight weeks to receive your business licence by this route.
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In Person
If you’re not comfortable with the above methods, you can visit the service branch at 375 University Avenue, Toronto, ON M5G 2M2. The service time is open from 8:30 am to 5 pm on regular business days. Here, you can make the payment via cheque, money order, or card. Your licence will arrive within 20 days by this method.
Cost of Registering a Business in Ontario
The cost of registering a business in Ontario depends upon the mode of registration:
- Online- $60
- By mail or in person- $80
In addition to the registration fee, you will also be charged for searching for your business name on Ontario’s Enhanced Name Search. Depending on the search report, it can cost you anywhere from $8 to $26.
Post Registration of Your Business in Ontario
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Renewal of Registration
Your BIN number is valid only for five years and must be renewed on expiration. The business commencement and expiry date will be mentioned on the licence. The renewal should be completed within 60 days of the expiry date, as mentioned in the licence. Ensure to provide the same information in the renewal form as provided in the original registration form.
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Amendment of Information
The Ontario government permits making amendments to the name, address, or activity of the business even after business registration. You can do the same by quoting your BIN numbers. However, for the amendments to be effective, you’ll have to first cancel the old registration and submit a new one. Upon completion of the amendment, the new registration will be valid for the remaining period of five years.
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Cancellation of Registration
If you no longer want to continue your business, you can file for cancellation with the Ontario government. The cancellation form requires your business name, address, registration date, business activity, BIN number, and the person authorizing the cancellation. On successful cancellation, your business will no longer be shown as active in the records of the Ontario government.
Penalty for No- Registration of Business in Ontario
It is mandatory to register within 60 days of starting a business in Ontario. The only exception to this is if you use your own name for the business. However, if you add another word, for instance, your name consulting services, you must register it.
If you fail to register or register the business with false information, you could be liable for a penalty of up to $2,000.
Wrapping Up
As you can see, registering a business in Ontario is not a herculean task. Once you figure out the name and business type, the reaming procedure is pretty straightforward. Ensure you comply with all federal and provincial laws when starting your business in Ontario. You can also seek professional help if you find the rules are too complex to understand.
Frequently Asked Questions (FAQs)
For a new business licence in Ontario or renewal of it, the cost ranges at $60, in the majority of the places, which is granted within 15 working days that fall on an immediate basis. Whereas, for a few specified partnerships registering a business in Ontario, it may cost $210 as well.
It is quite possible to start a business in Ontario without registration but with several restrictions, such as the business name cannot be anything else besides the owner’s first and last name itself.
One may reduce the expenses or liabilities of the business that is functioning at the owner’s residence after meeting any one of the conditions. Likewise, the business site is considered a prominent business place rather than a home.
The most dominating businesses are specifically these four types of firms, namely information and communications technologies, automobiles, pharmaceuticals and medical devices, and biotech.
The following are the most profit-making businesses in Ontario: Real Estate, Waste Management and Remediation, Professional Financial Services, Fitness and Recreational Sports Centres, Transportation and Storage How much does it cost to register a business in Ontario?
Can I start a business without registering it in Canada?
Is it illegal to run a business from home in Canada?
What are the major businesses in Ontario?
What is the most profitable business in Ontario?
