In Ontario, not only is it required to register a business, but the process is remarkably straightforward!
Having your business become a reality isn't out of your reach. Whether you're envisioning a sole proprietorship, partnership, or corporation, understanding the registration process is paramount. In this article, we'll delve into the why and how of registering your business, uncovering the complexities and empowering you to embark on your entrepreneurial journey with confidence.
Register a Business In Ontario - Why is it Important?
While you may think you do not have to register your business in order to get started, that isn't true. If your business operates in Ontario, registering with the province is mandatory, whether you do it directly with the Ontario Business Registry or through a third-party service provider like ONPro Services Inc.
If you are conducting business under your own name, no registration is needed. However, if you're using a name other than your own, registration is a must.
Determining what type of business you are going to register is essential in understanding how you will operate your business and how you will or will not be protected legally.
In Ontario, there are four main types of business registrations: Sole Proprietorships, General Partnerships, Incorporations, and Co-operatives. The following outlines the differences, pros, and cons for each.
Sole Proprietorships
A sole proprietorship is a business owned by one person. It is the easiest and most common way to start a business. As your business grows, you can choose to incorporate later.
Pros
You have full control of your company
It is easy and more affordable to set up
You can deduct losses and expenses from your personal income
You earn all the profits
Cons
General Partnership
A general partnership is a business owned by two or more people.
Pros
It is easy and more affordable to set up
Partners can contribute to costs and provide different skills to the business
Debts and losses are shared between partners
Expenses and losses can be included on your tax returns
Cons
Incorporation
A corporation is a legal entity that keeps the business separate from the business owner. You can choose to incorporate federally or provincially, and each option comes with its own pros and cons. If you choose to register your business provincially, you can always change to federal incorporation later by filing Articles of Continuance.
Before you incorporate, consult a lawyer or professional advisor.
Pros
You have limited liability
You can transfer ownership
You have more access to capital and grants
Your business name is protected (if you register federally)
Cons
Co-Operative
A co-operative is a corporation that is organized and controlled by its members. It can be set up to operate for profit or as a not-for-profit. Just like a corporation, it can be registered provincially or federally, and each option comes with pros and cons.
Pros
You are not responsible for all debts and losses
Decision making is democratic (one member, one vote)
Cons
Why Should You Register Your Business?
Registering your business in Ontario offers a layer of protection through liability separation. By incorporating, you create a distinct entity, safeguarding your personal assets from potential business liabilities. This not only protects your financial well-being but also provides a solid foundation for sustainable business growth.
You should also consider that the act of registration goes beyond legal requirements; it is a powerful tool for building credibility. A registered business or incorporation signals commitment and professionalism, instilling confidence in customers, suppliers, and partners. The trust garnered by a registered business can be a decisive factor in attracting stakeholders and establishing lasting, fruitful relationships.
How to Check if the Business Name is Available?
While registering a business may seem daunting, it's a relatively simple process. The first step, after coming up with a business idea, is finding a unique and memorable name for your business. Conducting a NUANS Pre-Search is crucial to see if your chosen name is available for use in Ontario.
Contrary to popular belief, if you're registering a business name (Sole Proprietorship, General Partnership or Tradename), you can technically have the same name as another registration, although it's not recommended. Searching multiple variations ensures you have options. NUANS, the Government of Canada's business name and trademark search tool, allows us to conduct searches on business and trademark names.
To search your business name, you will want to conduct a NUANS Pre-Search on the name(s) for your business.
After searching and deciding on a name, you can proceed with registering your business. If incorporating, you'd need to reserve the name for use, but for business registration, it's not required.
How to Register a Business Name
After you have determined your business name and the type of business you are registering or incorporating, you would proceed to the actual registration. You can either register or incorporate directly with the Ontario Business Registry or use a third party service provider such as ONPro Services Inc. who can handle the registration process for you.
How Long Does it Take to Register a Business?
Registering a business name can take anywhere from a few minutes to a couple of days. With ONPro, you typically have your registration with 1-3 hours.
What Information is Required to Register?
The business registration itself is pretty simple, and you just need basic information to complete it.
The details you will be required to provide are:
The name of the business,
Business address (business address is normally in Ontario),
The names of the individual owner or owners and addresses (there isn’t a requirement for the individuals to have an residential address in Ontario)
Additionally, you are required to provide a NAICS code for business activity and the accompanying description.
Things to Consider After Registering
After successfully registering your business in Ontario, it's important to remember that you must maintain and renew the business. This includes filing amendments when your business changes addresses and renewing it every 5 years if you are still operating that business. Changing the business name itself can only be done by registering a new business name. There is no way to change the name of a business other than registering a new business altogether. If you have a corporation then you can file Articles of Amendments to change the name of the incorporation so keep this in mind.
Common Mistakes to Avoid
Entrepreneurs often encounter common pitfalls during the registration process, leading to delays and complications. One frequent mistake is inadequate research when selecting a business name, resulting in conflicts or rejections during registration. To prevent such issues, make sure that you conduct a NUANS Pre-Search to see what businesses already exist with a name similar to yours.
From understanding the different business structures to selecting a unique business name, each step of registering your business allows you to start off right. As you embark on this journey, remember that seeking professional advice is invaluable. Whether consulting legal experts or utilizing government resources, tapping into professional assistance ensures a smooth and compliant business registration process, setting the stage for a successful and enduring enterprise.
Don't forget you can reach out to our team of experts to help you with registering your business today. You can also check out our library for more information.
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