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Starting your own business is exciting but takes careful planning. One of the first steps will be to register your business. Registering your company gives you the ability to borrow money from institutional lenders or commercial banks to finance your business.
Do I need to register my business?
It is generally recommended, even though there are exceptions. Failing to register your business when needed, or using false information, could result in a fines.
1. Name your business
The first thing you'll need to do is choose a business name. It's a good idea to check if other businesses are already using that name. While Ontario does not prohibit more than one non-incorporated business from having the same name, having a unique name helps avoid confusion and protects you from legal liability.
You can use a Nuans Report to confirm that no other business has the same or similar name to the one you would like to use.
If you previously registered a business, but your business name has expired, you must register again.
Restrictions on business names
- Obscene or objectionable words or expressions, or words prohibited under federal or Ontario law
- A business name that could be misleading about the type of business it is
Examples: using "Ltd." or similar suggestion of an incorporated status in your business name if you are not incorporated.
- "Limited", "Limitée", "Incorporated", "Incorporée", "Corporation", or the corresponding abbreviations "Ltd.", "Ltée", "Inc." or "Corp." are prohibited, unless "limited" is used in the name of a limited liability partnership
- The terms "college," "institute," and "university" are prohibited without special permission
- Business names cannot imply a connection with the Canadian, provincial, or territorial government, municipality, or the Crown
- Using another person's name is prohibited without their permission unless they have been dead for more than 30 years
It is your responsibility to make sure your business name complies with these rules. Even if you are granted a registration, it could be revoked at any time if it is in violation.
* Registering your business name does not give you exclusive rights to that name. You can better protect your business name by registering a trademark or incorporating your business using that name instead of a standard numerical name, as Ontario prohibits incorporations with identical names.
2. Select a business structure
There are several different types to choose from, and it's essential to select the correct one. Some simple examples are provided below:
- Sole proprietorship – One individual owns all the assets, is responsible for any debts, and receives all the profit of the business, but because the business is not a separate entity from the individual, the risks of the business also extend to that individual’s personal property and assets.
- General Partnership – Two or more individuals doing business together and sharing all profits and liabilities, but like sole proprietorships, the profits and liabilities of the business also extend to each of the partners’ property and assets.
- Limited Partnership – Ownership is shared by two or more individuals who are either general partners or limited partners. The general partner or partners are fully responsible for all debts, liabilities, and obligations, while limited partners have limited liability based on their investment in the business.
- Incorporating your business - The other option is to incorporate your business, which creates a legal entity that separates its owners from the company, which may afford greater protections for the personal property and assets of its owners. You can incorporate at the provincial or federal level.
3. How much does it cost to register a business in Ontario through ServiceOntario?
- If you register online the cost is $60
- If you register in person or by mail, it's $80
4. Ontario business registration and master business license
In Ontario, having a registered small business means you hold an "Ontario Business Registration." People sometimes call it a "Master Business License (MBL)" which is the form you receive after registration.
Your Master Business License (MBL) includes the registration particulars, expiry date, and Business Identification Number (BIN) and is proof of your legal business name registration. You should use your MBL when dealing with the Ontario government or financial institutions.
Ready to register?
Once you have chosen your business name and the type of entity you want to form, you can apply for business registration with the government.
The steps you will need to take to register your business depends on a number of elements including the type of business activity, whether or not your will have employees and if it will be a sole proprietorship or a partnership.
For more details please visit: https://www.ontario.ca/page/registering-your-business-name
For even more information on all the different types of businesses and how they can be registered, please visit : https://www.ontario.ca/page/ontario-business-registry-all-services
If you need help or have questions about registering or conducting business in Ontario, you can call ServiceOntario at 416-314-9151 in Toronto or Toll-Free 1-800-565-1921.
Alterna offers business banking services for all types of businesses. Book an appointment, and see how we can help!