Ontario is a great place to start a business. For one thing, Ontario is Canada's richest market, with a population of 14.5 million and the country's highest personal incomes. For another, the province makes it easy to find and access the information you need for Ontario business registration.
The first part of this article will lead you through the steps of business registration for a sole proprietorship, partnership or a Limited Liability Partnership (LLP) in Ontario. You should note that only lawyers, chartered accountants, and general accountants can form LLPs in the province. Regulations for registering corporations in Ontario are slightly different, so those are addressed in the final section.
Registering a Sole Proprietorship or Partnership in Ontario
Step 1. Choose a name for your business
You may operate a sole proprietorship using your own name with no additions. If you choose to do this, there's no need for a business registration. But if you call it anything else, your business name must be registered with the Central Production and Verification Services Branch of the Ministry of Government and Consumer Services.
Under the Ontario Business Names Act, fines of up to $2,000 can be levied against individuals and up to $25,000 for corporations for failure to register or for registering false or misleading information. So even though registering the name of your business doesn't give exclusive use of the name, it's worth your while.
Besides being sure you choose a business name for your sole proprietorship that sounds appealing, looks good, and will draw the proverbial horde of customers or clients, you also need to choose a business name that is legally acceptable. Certain words or expressions are prohibited.
For instance, you can't use words that imply incorporation such as Limited or Inc., or words that imply the business is associated with any branch of government. ServiceOntario provides all the details about which words or expressions can't be part of the name of your sole proprietorship.
Step 2. Conduct a search or searches for your chosen business name (and similar names)
A name registration does not protect your business name or guarantee exclusivity. For that, you need a trademark. The Business Names Act doesn't prohibit the registration of identical names, so you can register a business name used by another company. Keep in mind, if you do so—or if you register a name that's confusingly similar—you may end up in a lawsuit. So it's a good idea to investigate whether anyone else is using the name you want. There are several different ways to conduct a name search:
- ServiceOntario Integrated Business Services Application. This search spans Ontario only and charges between $8 and $26 for a report.
- The Government of Canada NUANS corporate name search website. NUANS (New Upgraded Automated Name Search) is a Canada-wide corporate and business name registry. A NUANS search will display corporations, business names, and trademarks similar to the name you have searched. The fee is currently $13.80 per report. NUANS reports from private service providers. For any other searches, you'll have to do those via the web. Those fees will vary.
Now that you've selected your business name and conducted a name search, you're ready to go through the actual business registration procedure to register your sole proprietorship or partnership. Continuing with the business registration steps, then:
Step 3. Register your business name
To register your business name, you will need to supply:
- The name and address of the business
- A description of the business activity that will be performed
- Your name and home address. You must have an address where legal papers can be served—a post office box is not acceptable. If you're registering the name of a partnership with 10 or fewer partners, you must include the names and home addresses of each partner.
- A valid email address if you are registering via email.
Once your business registration is complete, you will receive a Master Business Licence (MBL), which serves as proof of business name registration for financial institutions.
In Ontario, there are many options for registering your business name:
- Online through ServiceOntario ($60 to register or renew). You will receive your MBL via email within two business days after registering. One advantage to registering through the ServiceOntario website is that you can complete other necessary business forms electronically while you're at it, such as the Retail Sales Tax Vendor Permit (if you need to collect and remit the RST), the Employer Health Tax, and the Workplace Safety and Insurance Board.
- Through any of the service providers under contract with the Ministry of Government and Consumer Services. For information about service providers visit the ServiceOntario website.
- Via the Canada Revenue Agency's Business Registration Online service. By doing this, you can also register for other CRA accounts you may need, such as GST/HST registration or Payroll Deductions.
- Through the public office of the Central Production and Verification Services Branch in person or by mail. Forms are available from the branch or at local Land Registry Offices across the province. The fee for registering a business name by mail or in person is $80. If you register in person, you'll receive your MBL immediately. If you register by mail, you'll receive it within 20 business days.
Note that an MBL must be renewed every five years.
Step 4. Register for any other licenses, registrations, or certifications needed to legally operate your business
You may also need a business license, depending on the type of business you're running. And you have to run your business according to provincial and federal laws, which means you may need to register for workers' compensation insurance or collect GST/HST. Be sure you know every type of registration your business requires.
Step 5. Upgrade and renew your business name registration as required
A business name registration must be renewed every five years. The government doesn't send out reminder notices, which means re-registering is your responsibility. Additionally, if your business name or business ownership changes at any time, you must re-register your business name (and pay the registration fee once again).
Registering a Corporation in Ontario
There are pros and cons to incorporating your business, and you should also weigh whether to incorporate locally or federally. Provincial incorporation creates a legal entity only in Ontario and protects your corporation's name only in Ontario. Federal incorporation allows you to operate anywhere in the country with a name that is protected nationwide.
Having said that, registering a corporation in Ontario is also relatively easy. Here are the steps to incorporation in Ontario:
1. Choose a name for your corporation
Just as with a sole proprietorship or partnership, you may not use words that imply the business is connected with the Crown, the Government of Canada, a province or territory, a municipality, or an agency of the Crown, government, or municipality without the written consent of the appropriate authority.
2. Conduct a name search unless you're going to be operating a numbered company
This search, done by a Searcher of Records, confirms no one else has a business or registered trademark with the same or similar name to what you've chosen. You must provide a current NUANS report with your incorporation application.
3. Complete the Articles of Incorporation—Form 1 under the Business Corporations Act
To complete the articles of incorporation online, you can use one of the following service providers:
- Cyberbahn, a division of Thomson Reuters Canada Limited
- OnCorp Direct Inc.
- ESC Corporate Services Ltd
If you want to file the old-fashioned way using paper forms, you can purchase business incorporation forms from lawyers, legal stationery stores, or name search houses.
4. Create a cover letter
This identifies the name, return address, and telephone number of a contact for the corporation. If you are registering electronically, you must complete the cover letter online as well.
5. File your application
Your application must include the completed articles of incorporation, the cover letter, a current NUANS name search, the NUANS reservation reference number, the NUANS date, and the fee.
If you are filing in person or by mail at the Central Production and Verification Services Branch, or at a Land Registry Office, the registration fee is $360. There's a statutory fee of $300 plus the fee charged by the primary service provider if you're filing electronically.
You may also need to file other supporting documentation, such as a legal opinion, that will be kept in your file. To find out whether you need additional documents, contact the ministry.
For More Information on Ontario Business Registration
Need more information? Ontario business incorporation is handled through the Companies and Personal Property Security Branch of the Ministry of Government Services. You can contact the Ministry in Toronto at (416)212-2665 or toll-free at 1-800-361-3223. The mailing address is:
Companies and Personal Property Security Branch
Ministry of Government and Consumer Services
393 University Ave., Suite 200
Toronto ON M5G 2M2
Registering your business in Ontario is an important first step in getting it off the ground. Be sure you've covered all these steps before you start operating.