Registering Your Business in Ontario
There are 3 main steps before your business becomes legally recognized. I am not a lawyer I am just explaining my experience with launching my business and the necessary steps. *Disclaimer, this is protocol in Ontario, always double check your province to make sure what the protocols are.
3 steps For Registering your Business
1)Register Your Business Number
2)Register HST
3)Register Your Business Name
Before you decide to get all the necessary documents for your business you will need to decide what kind of business ownership you wish to fall under.
Types of Ownerships
1. Sole-Proprietorship – the sole proprietor is personally liable and responsible for their business and any debts
2.Partnership – similar to sole proprietorship except with 2 or more parties involved, usually established with a contract detailing the percentage of revenues, expenses and taxes
3. Corporation – Establishes your business as a separately recognized legal entity by creating ownership shares. The owner would be considered an employee and thus offering some tax advantages as well as some protection and liability for the company’s name.
You can read more about the types of ownerships here:
https://www.bdc.ca/en/articles-tools/start-buy-business/start-business/advantages-different-business-structures
*For some context my business is set up as Sole Proprietorship, but once more established the idea of switching to Corporation can also have many benefits!
Now you can get started on your business journey with these steps…
2 Key Factors
** If you are running your business using your own name ie. BOB STEVENS, then you do not need to register your business name. Even if you use a slight variation like ‘BOB STEVENS COMPANY’ then you MUST register your name.
**You do not need to register for HST if your business is making under $30,000 in income, BUT if you want to claim your business under HST and have your clients claim it as well then it is highly recommended to do so from the start. I personally registered for HST right away to charge my clients HST. (it just makes book-keeping and taxes easier for you in the end!). You can NOT charge your clients HST if you do not have a number registered.
Step 1) Registering your Business Number
There is no cost to registering your business and HST and you can do so right on Canada Revenues website using a quick step by step questionnaire.
You will need to know some important information to state in your registration such as:
-your first and last name
-your business name
-email
-what ownership you will fall under
-your address and phone number
-your SIN
-description of your business activities
You can complete the steps using this link.
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/registering-your-business/business-registration-online-overview.html
Step 2) Register your HST
Once your BN is registered you can then complete any other registrations you require for your business like HST registration, payroll etc.
You can complete the prompts following this link
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/account-register.html
Once you have a BN and HST you are able to charge HST on your business. Make sure to check your province HST guidelines as it varies. In Ontario HST is 13%.
Step 3) Register Your Business Name
You must register your business name within 60 days of operating your business so don’t put this step off!
Registering your business does cost money, but good news, as a business expense you are able to write this off in your taxes! Depending on which features you use when registering your business it can cost anywhere from $60 to $80. Registering the name itself costs $60 but you should also pay to do a name search. You don’t want to pay for a business license under a name already being used by a person or company!
You can complete your Business name registration right online and it just takes a few minutes. I completed this step using the Service Ontario site which I have linked below.
https://www.ontario.ca/page/register-business-name-limited-partnership
Important disclaimer on 'Employees'
The prompts will ask if you plan on hiring employees down the line and offer all sorts of insurances – you can always change this feature in your business account later so just check NO for now, unless you for sure know the exact date you intend to start hiring people and operating using payroll.
Once you complete the prompts you can receive your downloadable/printable license PDF right away or you can have it sent via standard mail which will arrive in around 10 days.
You must renew your master business license every 5 years which also costs $60.
Don't Skip these steps!
Now you are all set to legally operate your business and charge/submit HST. I hope this quick guide was helpful as I found registering my business a little confusing at first! There are so many back-end steps to complete when it comes to launching your business, but it’s important not to forget these crucial steps to make sure your business is legit! 🙂
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