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How to Register a Business in Ontario?

You want to start your own business in the beautiful province of Ontario and not sure where to start? You’re at the right place. At Little Dragon Media, we know a thing or two about registering a new business in Ontario, as we’ve been working with new Ontario business owners for over a decade now, to help them kickstart their marketing efforts with services such as Google Ads and SEO campaigns.

Registering a new business in Ontario Canada involves several steps to ensure your business is properly set up and compliant with federal, provincial, and municipal regulations. Here’s a simplified guide for those willing to take the plunge:

Choose a Business Structure:

Choosing your business structure is an important part of registering your business. This isn’t a decision to be taken lightly as the structure will affect your taxes and liability. I highly recommend speaking to a business lawyer and business accountant if you are unsure. Here are the common business types:

The most common structures include:

  1. Sole Proprietorship: The business is not separate from the owner, meaning income and losses are reported on the owner’s personal tax return.
  2. Partnership: Involves two or more people. Profits and losses pass through to the partners and are reported on their personal tax returns.
  3. Corporation: The corporation is a separate legal entity, so it pays corporate taxes on profits. Shareholders pay personal taxes on dividends received.
  4. S Corporation: Similar to corporations, but profits and losses pass through to shareholders’ personal tax returns, avoiding double taxation.
  5. Limited Liability Company (LLC): Offers flexibility, allowing profits and losses to pass through to owners’ personal tax returns, avoiding corporate taxation, yet provides liability protection.

Business Name Registration:

Choose a unique business name and check its availability through the Ontario Business Central or Service Ontario website.

Register your chosen business name, if it’s different from your legal name. This is usually required for sole proprietorships and partnerships.

Register for an HST/GST Number:

Determine if your business needs to collect and remit the Harmonized Sales Tax (HST) or the Goods and Services Tax (GST). Register for the appropriate tax with the Canada Revenue Agency (CRA).

Business License:

This may or may not apply to you. When starting a business, it’s always recommended to verify whether you need a municipal business license or permit. This requirement can vary based on your business type, location, and local regulations. Here’s a more detailed explanation:

  • Local Regulations: Each municipality has its own rules and regulations for businesses. These can differ significantly from one area to another.
  • Type of Business: Certain types of businesses, such as food services, health services, and construction, often have specific licensing requirements.
  • Operating Legally: A municipal business license or permit ensures you’re operating within the legal framework of your city or region. It’s a form of regulation that helps maintain public safety and standards.
  • Application Process: To obtain a license, you typically need to apply through your local city hall or municipal office. This process may include submitting business details, paying a fee, and passing inspections.
  • Renewal and Compliance: Licenses and permits often have expiration dates, requiring regular renewal. Staying compliant with local laws and regulations is crucial to avoid fines or business closure.

Business Number (BN):

If you plan to hire employees, register for a Business Number (BN) with the CRA. This number is used for various federal programs, including payroll deductions.

Register with the Workplace Safety and Insurance Board (WSIB):

If you have employees, you must register with the WSIB to provide workplace insurance coverage for your workers in case of injuries or accidents. This registration ensures that employees are covered by workplace insurance in case of injuries or illnesses related to their work. Here’s a general overview of the types of businesses that typically need to register with the WSIB:

  • Employers with Workers: If you have employees, including full-time, part-time, seasonal, or contract workers, you generally need to register with the WSIB. This includes various types of businesses and legal structures, such as sole proprietorships, partnerships, corporations, and limited liability partnerships (LLPs).
  • Construction Industry: Businesses in the construction industry are typically required to register with the WSIB. This includes general contractors, subcontractors, builders, and tradespeople involved in construction projects.
  • Manufacturing and Industrial Businesses: Companies engaged in manufacturing, production, or industrial activities typically need to register. This includes factories, warehouses, and industrial facilities.
  • Retail and Service Businesses: Retailers, restaurants, hotels, and businesses in the service industry that have employees are also generally required to register.
  • Healthcare Providers: Healthcare facilities, medical clinics, and healthcare practitioners with employees need to register with the WSIB.
  • Transportation and Logistics: Businesses in the transportation and logistics sector, including trucking companies and courier services, typically need to register.
  • Agriculture: Agricultural businesses with employees, such as farms and nurseries, are generally required to register.
  • Not-for-Profit Organizations: Not-for-profit organizations that employ workers are subject to WSIB registration requirements.
  • Public Sector Employers: Public sector employers, including government agencies, municipalities, and educational institutions, usually need to register their employees with the WSIB.
  • Personal Services: Personal service providers, such as hair salons and spas, that have employees are generally required to register.

Open a Business Bank Account:

The best thing you can ever do from tax perspective is to separate your business finances from personal finances by opening a dedicated business bank account. This helps tremendously with accounting and financial management. I also highly recommend hiring an accountant right from the start, so you don’t have to deal with financial and tax headaches down the line.

Protip: you can hire a part-time accountant or an accounting agency to handling both your bookkeeping and taxes for as low as a couple hundred dollars per month.

Register for Payroll Deductions (if applicable):

If you hire employees, you’ll need to register for payroll deductions with the CRA. This involves deducting income tax, Canada Pension Plan (CPP), and Employment Insurance (EI) contributions from employees’ paychecks.

Register for Import/Export (if applicable):

If your business involves importing or exporting goods, you may need to register with the Canada Border Services Agency (CBSA) and obtain the necessary permits and licenses.

Comply with Health and Safety Regulations:

Ensure your business complies with health and safety regulations specific to your industry. This may involve workplace inspections and obtaining relevant permits.

Get Business Insurance:

Consider obtaining business insurance to protect your business from potential risks, including liability insurance, property insurance, and other types of coverage.

Business Planning:

Create a comprehensive business plan that outlines your business objectives, strategies, target market, financial projections, and more. A well-thought-out plan can help guide your business’s growth and success. Your business plan can also help you acquire funding and/or government grants if needed.

Ontario New Business FAQ

  1. Who can register a business in Ontario? Anyone who meets the legal requirements, including Canadian citizens, permanent residents, and non-residents aged 18 or over, can register a business. Non-residents may need to fulfill additional requirements, such as ensuring a portion of the corporation’s directors are Canadian residents or citizens.
  2. What are the benefits of registering a business in Ontario? Registering a business in Ontario offers legal protection by separating individual liability from the business. It also aids in brand recognition through a unique name, facilitates proper tax setup, and improves access to capital, like business loans.
  3. Is it necessary to register my business in Ontario? Business registration is required if your annual earnings exceed $30,000, you use a name other than your personal legal name, or you operate a partnership or corporation. Sole proprietorships under personal names earning less than $30,000 annually are exempt.
  4. When should I register my business in Ontario? It’s recommended to register your business within 60 days of starting operations. Registrations must be renewed every five years, with a 60-day grace period for renewal.
  5. How long does it take to register a business in Ontario? The time to register varies by business type. Sole proprietorships typically take one business day online, partnerships a few business days, and corporations one to five business days depending on whether they are provincially or federally incorporated.
  6. What information is required to register a business? For sole proprietorships and partnerships, you need names, address, email, business description, and a partnership agreement if applicable. Corporations require articles of incorporation. After registration, you will receive a Business Identification Number (BIN).
  7. How do I register my business name? You must ensure your business name is unique and not misleading. It involves conducting a name search and registering the name, which is distinct from your personal legal name.
  8. What types of business registrations are available in Ontario? Ontario offers several business structures, including sole proprietorships, corporations, general/limited partnerships, and Limited Liability Partnerships (LLP), each with specific legal and financial implications.
  9. How do I register a sole proprietorship or partnership in Ontario? Both require a unique business name registration and have similar registration processes. However, they offer limited legal protection, meaning there’s no legal distinction between the individual and the business for liabilities.
  10. What is the cost to register a sole proprietorship or partnership in Ontario? Registering through Ownr costs $49.00 plus HST, while direct government registration costs $60 for a sole proprietorship or general partnership and $210 for a limited partnership.
  11. How do I incorporate a business in Ontario? Incorporation involves a detailed registration process, including a name search, filing Articles of Incorporation, and maintaining a Minute Book. It creates a separate legal entity, offering liability protection. Costs vary, starting from $300 for direct government registration.
  12. Do I need to register my business with the Canada Revenue Agency (CRA)? Registration with CRA is required for corporations and sole proprietorships earning over $30,000. This registration is necessary for tax purposes and setting up a GST/HST account.

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