Registration of Ontario
Sole Proprietorship
The small business owner, who conducts business in Ontario, must register a business/trade name with the Province of Ontario if it is different from his/her own legal name. When one person performs all the functions required for the successful operation of the business this is called a Sole Proprietorship.
For example, if Adam Smith is planning to conduct his business under the name Smart Consulting, he must register it.
Registration of new business names takes 30 minutes to 2 business hours.
Renewal of existing business names takes 1 to 2 weeks.
Ontario Business name registration is valid for 5 years.
If you are going to start your small business with a partner, you should consider registration of an Ontario General Partnership.
It’s important to know, an owner of a small business is fully responsible for the business debts and obligations by their personal assets. Thus, the business owner has unlimited personal liability.
If you are interested to get a limited liability company protecting you from personal liability for your business, you should incorporate your business.
Benefits
Easy and inexpensive to set up
Little regulation from the government
Directly controlled by the owner/operator
Minimal working capital required
Business is taxed through owner’s personal income tax, and losses can be used to reduce taxes on other sources of personal income
Wages payable to a spouse are deductible from the income of the business
Disadvantages
Unlimited personal liability
Lack of continuity in business organization in absence of owner
Difficulty in raising capital
Owners are taxed at individual tax rate, which is much higher than corporate tax rate
Important Notice:
Please note our company does not provide legal and tax advice.
We recommend you to seek a professional advice from a lawyer or accountant, who is authorized to practice in your province before incorporating a company.