Legal Requirements for Starting a Business in Ontario [Updated]
Starting a business anywhere in the world requires the business owner to get their business registered and also put in place some legal requirements for starting the business. So, are you planning to start up a business in Ontario and you are thinking about the requirements to register your business?
Do not stress yourself, I will be covering some important areas on how you can register your business in Ontario and some legal documents and requirements you need to put in place before you get started with your business.
Legal requirements for starting a business in Ontario (Business Permits)
Before getting to know how to register a business in Ontario, you need to know your business structure and how it affects your business registration or permit. You need to choose a business structure, such as sole proprietorship, partnership, or corporation before you can even begin to consider registering your small business.
Then, you’ll need to decide on a name that will require registration if you plan to use it in place of your legal name. According to the Ontario Business Names Act, there is a hefty penalty for failing to register a business name.
Following is what you need to start a business legally in Ontario:
- A Registered business name
- Documents showing business location
- Business permits appropriate to your business
- Certification from professional bodies offering your services (for example clinical certificates and other professional certifications)
Registration requirements (based on the business structure you choose)
As a sole owner doing business under your own name, you are exempt from filing any formal paperwork to establish your company. You must register your business with the province if you want to use a name other than your own, or if your business is a partnership or corporation. Whenever a company is registered in the province of Ontario, it is also registered at the federal level.
If you decide to form a corporation, you’ll have to do so in Ontario and any other states or jurisdictions where you intend to conduct business. Incorporating your firm federally assures that your name is protected and recognized across the country and globally, but state incorporation only provides protection in the states in which you choose to do so.
Your company’s name is the only thing you have to worry about when you incorporate; no other company can lawfully use it. However, the protection is jurisdictional; if you only incorporate in Ontario, your business name will not be protected in other jurisdictions.
If you incorporate at the federal level, your business name will be safeguarded across the country, even if you don’t have separate provincial or territorial incorporations.
How To Apply For A GST/HST Number
Consider whether you’ll need a GST/HST number before proceeding. The Canadian Revenue Agency considers most sole proprietorships, partnerships, and companies with annual revenues of less than $30,000. to be “small suppliers” who are exempt from collecting GST/HST.
If your company’s quarterly or annual global sales are more than $30,000, you must apply for a GST/HST number and begin collecting sales tax immediately.
If your annual sales are expected to be less than $30,000, you may want to voluntarily register to collect GST/HST in order to save money. You can choose between a “fast method” and a “long method” for reporting GST/HST, so you should consider the possible increase in income versus the time it will take you (or the expense for your accountant) to complete GST/HST reports before deciding which option is best for you.
How To Obtain licenses or permits In Ontario
To obtain a business permit or license, all you need to know is to head to https://www.ontarioca.gov/BusinessLicense, fill in your business name, and other information required from you.
Pay the specified amount appropriate to your business structure and follow the prompt.
Watch the below video to learn how to register a business in Ontario Canada:
Do small businesses need to be registered in Ontario?
As a sole owner doing business under your own name, you are exempt from filing any formal paperwork to establish your company. You must register your business with the province if you want to use a name other than your own, or if your business is a partnership or corporation. Whenever a company is registered in the province of Ontario, it is also registered at the federal level.
Your company must be registered with the Ontario Business Registry if you have any workers, facilities, or offices located in Ontario. The Ontario Business Registry is where you’ll need to be if your company has any presence in the province, be it in the form of employees, physical locations, or administrative offices.
Do you need a business license to sell in Ontario?
In most places, a business license is required before offering products or services for sale with the intent to make a profit.
What happens if you don’t register your business in Ontario?
Failure to register your firm when required could result in hefty fines and other penalties. Using an unregistered name can result in fines of up to $2,000 in Ontario, for example, for a sole proprietor or partnership. For a business, this penalty can reach $25,000.
How much is a business license in Ontario?
To register as a business license in Ontario will cost you at least $60. Online registration with Service Ontario is available for sole proprietorships and partnerships. The “Search, register, and renew business names” option is available at www.serviceontario.ca.
Can you run a business out of your home in Ontario?
Yes, you can run a business out of your home in Ontario. As long as one of the following applies, you can write off the costs associated with using a space in your house as a place of business: it is your primary place of business. The sole purpose of your visits to this location is to conduct business with paying customers or patients.
Why do I need a business license in Ontario?
Business registration in Ontario is a quick and easy but mandatory step when launching a new business in the province. When creating a company, whether as a lone owner or a partnership, it is essential to obtain a master business license.
Does a sole proprietor need a business license in Ontario?
Business registration is not required in the province of Ontario if you use your own name for commercial purposes; but, if your company uses a business name, you must register as a Sole Proprietor.
How much does it cost to register a sole proprietorship in Ontario?
For a sole proprietorship or general partnership, the cost to register or renew a business name is $60 (payable online, by mail, or by email), while the fee for a limited partnership is $210.
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Conclusion
Ontario Canada is one of the American countries that is suitable to do such businesses, but your desire and dream to start a business may properly come to reality if you have all the legal documents and requirements to start up the business in your area. So, in this content, we have covered the information you need to know about how to register a business in Ontario and all you need to know.
