All small and large businesses in Ontario are subjected to laws and regulations. Therefore, you’re required by law to register your business within 60 days of starting your operations. You’ll only be exempted from doing this when you use your personal name for your business.
However, when you add a slight adjustment to your name, for instance, adding the name entrepreneurs, you’ll have to register your business. If you want to know everything about business name registration Ontario, read this exhaustive guide which looks at everything you need to know.
1. Select An Appropriate Business Structure
Before registering your business name, you’ll be required to select the appropriate business structure for your company. In Ontario, the three business structures to choose from include the following options:
a). Corporation/Trade Name
A corporation or trade name is a legal form of business ownership requiring detailed legal filings. This form of legal ownership offers independent entities different from the owners or shareholders. As an owner, you’ll receive payment through shared profits or dividends.
Here are the main advantages of using this type of business structure;
- It offers benefits over income tax at different levels of income.
- As a corporation, you can award shares, which can boost your capital.
- It helps to enhance the company’s customs and image in the industry. For instance, it’s ideal for securing any government contract.
- As the owner, you’ll be protected or indemnified against liabilities or the company’s debt in most cases.
Despite all the significant advantages this legal form offers, it also has its downsides. This business structure features high administrative costs. It’s relatively expensive and can cost between CAD$300 to CAD$400.
During the registration of a corporation, there are certain things you need to keep in mind. Here are some of them:
- It’s affordable to start.
- Registration runs for five years and can be renewed.
- It doesn’t offer name protection.
- Making changes isn’t easy after registering your business.
- Business taxation is filed under corporate tax returns.
- It should be owned by a registered or incorporated corporation within Ontario.
It’s important to remember these details if you’re planning to form a corporation in Ontario.
A partnership is a type of proprietorship divided among business owners. Hence, it can be among two principal individuals or more. Registering the company under partnership provides validity for five years, and you can renew it afterward. However, unlike a corporation, when an individual incurs debt in partnership, it’ll be incurred by all business partners.
When registering a partnership, you’ll need to keep these details in mind:
- The business has to be owned by two or more individuals.
- The business taxation will be included in the business owner’s tax return filings.
- Access to credit will be limited.
- Establishing it can be relatively easy, and so is the cancellation process.
- There’s no protection of the business name.
- Individual owners will be responsible for taxation.
- It’s inflexible when it comes to changing details after registering.
- Individual owners will be liable for everything in the business.
In addition, starting your company under this business structure is inexpensive. Furthermore, this legal form is classified under a master business license.
c). Sole Proprietorship
A sole proprietorship is the simplest type of legal form. As a business owner who offers services or sells products, you’re said to fall into a sole proprietorship category. In this legal form, you are your own business, not an employee.
Moreover, your business income becomes your personal net income. Plus, you’ll be responsible for your business’s debt. Once you abandon it, it’ll cease to run and exist. Thus, having these details in mind is vital when it comes to registering for sole proprietorship:
- It’s individually owned.
- Establishing and canceling it can be relatively easy.
- Starting it is inexpensive.
- Registration can be renewed after five years.
- The tax will be individual.
A sole proprietorship is an ideal legal form for starting a small business. However, here are some vital points to keep in mind:
- The Importance Of Your Business Name: When you spend a good amount of money on advertising and promotion materials, several individuals may use the name of your business. Therefore, it’s best to protect your business name by incorporating it.
- Taxation: Since sole proprietorship taxation is done under your personal tax return, the return can be higher than your individual needs. As a result, you might consider looking into incorporation or consulting a tax expert or an accountant who will give you better advice on what you should do in this circumstance.
- Liability Protection: You won’t be a separate entity from your business when registering your business under sole proprietorship. While this isn’t the case with incorporation, it’s something to consider if you’re running a high-risk business.
Given these details, choosing the best legal form of business is essential to achieve your goals.
2. Find Out The Required Information During Business Registration
Once you choose a legal form that best suits your business, you’ll be required to set it up. As a small business owner, you can use an inexpensive method of registering your company at Ontario Business Registration, often known as the master business license or form 1. This form of registration is accessible to trade names.
The information needed for business name registration Ontario includes the name of your business, your business address, and the primary place of your business in Ontario. Furthermore, it’s essential to indicate the addresses and names of individuals running the business. Keep in mind that a post office box won’t be accepted.
Moreover, the name of the individual authorizing your business registration should be included in your registration. Plus, your business’s North American Industry Classification Code (NAICS) should also be added for the activities being carried out according to the listing provided.
Having all this information in your head will help avoid possible issues while registering your business in Ontario. This will help prevent possible stumbling blocks that might delay you from starting your business operations within the desired time.
3. Select The Right Business Name
A business name is crucial as it serves as the identity of your venture, making it a vital marketing asset. As a result, you’ll need to come up with a great name carefully. Having the right name for your business will help your clients identify you and your product, helping you attract new customers. Also, a good name will help you create an excellent image for your business.
The idea behind choosing a good name lies in its simplicity. A simple name should be easy to remember and offer detailed information. Your business name should help potential customers to understand your services or product.
When coming up with a name for your business, you’ll need to ensure it’s unique. The Ontario Government will accept any name given to them by the registrant because small companies have no name protection. However, you’ll be risking legal action if the name of your business is similar to any existing firm.
Therefore, when selecting a name for your business, it would be better to remember these aspects:
- The use of obscene words is prohibited.
- Words such as ‘Corp’ for a corporation, ‘Inc’ for incorporation, and ‘Ltd’ for limited are not allowed since they indicate a corporate entity.
- Names that imply government body association are restricted.
- You cannot use someone else’s name to register your business, such as Abraham Lincoln.
- As a sole proprietor, you cannot use names that will imply that more than one individual owns the business.
- You cannot use @ sign in your business name. However, you’re allowed to use other symbols but you cannot use them as the first character.
- Unless given consent by the Ministry of Education, you’re not allowed to use the ‘Institute,’ ‘University,’ or ‘College’ in your business name.
These aspects can guide you when selecting the right name for your business.
4. Conduct A Name Search
Searching existing business names is vital before making any final decision. And to do that, you can use the Ontario Business Name Search or the Newly Updated Automated Name Search (NUANS). Although it isn’t mandatory to search for existing business names, verifying your business name is highly recommended.
The Ontario Business Name Search offers a search using the Ontario Ministry of Consumer and Commercial Relations. With this database, you can search your business names and those with the same names within Ontario. However, it doesn’t offer similar names, and neither does it verify you’re not infringing an existing trademark or corporation name within Ontario.
On the other hand, NUANS is a database with records of business names in most areas of Canada. With this database, you can access businesses with similar names. NUANS offers a better search than the Ontario Business Name Search, making it the best platform for searching existing business names.
5. Select An Appropriate Location
The success of your business depends significantly on its location. Because of this, it’s best to take your time to find a suitable location before starting your business operations. Your location is also crucial because banks and different government agencies will use it when sending you crucial and sensitive documents.
In addition, you’ll be using your location address when filing business taxes. With all this in mind, ensure to provide your company’s actual physical address when registering your business name.
6. Understand The Final Steps For Business Registration
To complete the registration of your business name in Ontario, you’ll need to consider these vital aspects:
- NUANS or Ontario Business Name Search
- Your business activity
- Type of legal form used
- Name of the individual authorizing the registration of the business
With the name of your business fully registered with the Ontario Government, you’ll receive a unique Business Identification Number (BIN). In addition, your business name registration in Ontario will be valid for five years.
You can always cancel or amend the name of your business within five years. For this to be effective, you’ll be required to have your BIN with you for the changes to be updated successfully.
Although all businesses in Ontario are subjected to laws and regulations, not all businesses require name registration. Fortunately, the registration process is relatively easy, and after reading this article, you can now go ahead and register your business name in Ontario with maximum ease.