Entrepreneurship has the potential to become a fulfilling and financially viable career choice, if you’re willing to make the commitment necessary to build a business from scratch. As an aspiring entrepreneur, legally registering your business is a key step in the process. If you’ve been putting it off because of fears about the cost, time, and effort required to register a business in Ontario, we’re here to help.
Doing it alone can be stressful and confusing. You don’t have to. When you register for a sole proprietorship in Ontario with Ownr, the registration process and everything after it gets handled in one place, at a price that won’t dent your startup budget.
What is a sole proprietorship in Canada?
A sole proprietorship is the simplest business structure in Canada, in which an individual owner of a business takes on all the profits, debts, and legal responsibilities of a company. Sole proprietorships are taxed at your personal income tax rates, and are also the least expensive and most straightforward business types in Canada when it comes to both registration and ongoing requirements.
Do I need to register a sole proprietorship in Ontario?
In most cases, you are legally required to register a sole proprietorship in Ontario. The one exception is if you are conducting business operations under your own legal name, rather than a distinct business name, in which case registering your business is not mandatory.
That said, registering your sole proprietorship may still be in your best interest, even if it’s not technically necessary. While establishing a sole proprietorship does not provide business name protection, having a registered business can lend a level of validity to your business that you don’t get with an unregistered company.
Sole proprietorship registration also gives you the option of opening a business bank account, and can help with accessing government programs for business loans and other funding opportunities.
A sole proprietorship is also the easiest type of business to register, and considering how complicated starting a business can be, the comparatively stress-free sole proprietorship registration definitely has its share of advantages.
How to register a sole proprietorship in Ontario
Determine if a sole proprietorship is right for you
Becoming a sole proprietor can be the perfect business structure if you’re running a small business by yourself and don’t want to have to worry about complex corporate paperwork or expensive accounting fees. As a sole proprietorship, you can file your small business income and deduct business expenses as part of your personal taxes.
If you’re considering running your business with a partner, you’ll need to look into registering a partnership rather than a sole proprietorship. While a simple verbal agreement is enough to form a partnership, it’s always a good idea to lay out your business strategy in a partnership agreement. One of the advantages of a partnership is another person to bounce ideas off of, but it can lead to challenges when the roles of the partners are not clear.
On the other hand, if additional liability protection is a priority, incorporation may be the best choice for your business.
Register your business name
You don’t have to register a name if you’ll trade under your own legal name, but anything more creative than that needs a business name registration before you can use it.
Ontario’s Business Names Act governs that registration, and it doesn’t hand you exclusive rights to the name. Another sole proprietor can register the exact same one, which is perfectly legal and still a good reason to pick something distinctive enough to stand apart in search results. While you’re weighing options, check whether the matching domain name is free too.
Register with Ownr, and you’ll get unlimited business name searches, so you can test as many ideas as you want before you commit. Ontario doesn’t require a formal NUANS name search report for a sole proprietorship business name registration, as it does for incorporation, though a search still tells you who’s already using the name.
Fill out the paperwork
Now comes the part nobody looks forward to: the forms. Luckily, a sole proprietorship is the easiest type of business to register, and you can complete the entire sole proprietorship business registration process online.
Going direct means creating an Ontario.ca Login first, then an Ontario Business Account, and the registry walks you through both during setup. From there, you pay the $60 filing fee, and the Ontario Business Registry issues your Business Name Registration along with a nine-digit Business Identification Number (BIN). That document used to go by a different name, so if you want the terminology explained properly, our guide to the Master Business Licence covers it.
Registering with Ownr costs $49 and bundles a few things the registry doesn’t.
| Register directly (Ontario Business Registry) | Register with Ownr | |
|---|---|---|
| Fee | $60 government fee | $49, government fee included |
| Name searches included | Free registry search | Unlimited business name searches |
| Document storage | You download and file your own copies | Stored in your Ownr account |
| RBC cashback offer | None | $100 back on a new RBC business account opened within 60 days |
So instead of hunting for the file every time you hire someone, open a bank account, or apply for credit, everything sits in one place.
Register for a GST or HST number
Finished registering your business? There are still a few things left to do. Many Ontario businesses are required to register for the GST/HST, and the trigger is revenue rather than business type.
You are a small supplier and are exempt from registering as long as your total taxable revenue remains at or below $30,000 over four consecutive calendar quarters. Cross that line, either in a single quarter or over four of them, and you have 29 days from your effective date to register. You have to start charging sales tax from that effective date, not from the day your registration comes through.
You can apply for a GST/HST number online through the Canada Revenue Agency’s Business Registration Online (BRO), or by mail, fax, or telephone.
Even below $30,000, registering voluntarily can pay off, since registering for GST and HST lets you claim input tax credits against your business income. You can deduct the GST or HST on purchases you make for the business.
Pro tip: depending on what you do, you may also need other business licences or certifications, such as health and safety permits from your local health department. BizPaL is a government service that helps you work out which ones apply to you.
Renewing Your Sole Proprietorship Registration
Registering once doesn’t cover you forever. Your Business Name Registration is valid for 5 years from the date you file and then expires.
| When | What happens |
|---|---|
| Up to 6 months before expiry | The renewal option appears in your Ontario Business Account |
| At the 5-year expiry date | The registration expires unless you’ve renewed |
| Up to 60 days after expiry | You can still renew online for $60 |
| After the 60-day grace period | Renewal closes, and you have to register the name again from scratch |
Let that 60-day window run out, and you lose the option to renew entirely. You’d register the same name again as a brand-new filing, and the Ontario Business Registry would issue a new Business Identification Number and a new company key with no link back to your original registration date. Meanwhile, the name sits available, so another sole proprietor can take it before you get around to it.
Ontario doesn’t guarantee a reminder either, which makes tracking the date your job. Put it in your calendar the same day you register. Renewal costs $60 and takes minutes, while a lapsed name can cost you the brand you’ve spent five years building.
Frequently asked questions
Do I need to register as a sole proprietor in Ontario?
Only if you’ll trade under a name other than your own legal name. If you run the business as Jane Smith and Ontario doesn’t require a registration, but call it Smith Landscaping, you’ll need to register that business name before you use it.
How does sole proprietorship work in Ontario?
In Ontario, a sole proprietorship is a business with one owner who is fully responsible for all business decisions, profits, losses, and debts. A sole proprietorship does not have separate legal status, and the owner is personally liable for the business.
How much tax do sole proprietors pay in Ontario?
From a tax perspective, sole proprietors are required to pay personal income tax on the net income generated by their business.
How much does it cost to start a sole proprietorship in Ontario?
Registering directly through the Ontario Business Registry costs $60, or $49 with Ownr, which includes the government fee.
Do I have to renew my sole proprietorship registration in Ontario?
Yes. An Ontario Business Name Registration expires 5 years after you file it. You can renew from 6 months before the expiry date to 60 days after the expiry date for $60. Past that 60-day window, you have to register the name again as a new filing.
What can a sole proprietor write off in Ontario?
A sole proprietor can write off a variety of types of business expenses, including advertising, start-up costs, insurance, accounting services, maintenance, supplies, and many more.
Do I need a business bank account for a sole proprietorship?
If you operate your business under your own legal name, you do not need a separate business banking account. However, if you use a business name, you are required to open a separate business bank account in order to process payments to your business.
How to get started with your own business and become an entrepreneur
We’ve just gone over a lot of information, so let’s take a moment to summarize so you know what steps to take next to start your own sole proprietorship in Ontario.
First, weigh the pros and cons of a sole proprietorship to determine if it’s the right business structure for you. Remember, you can always choose to incorporate your business later on if your goals and priorities change.
Once you’re ready to register, you’ll need to decide whether to do it on your own or get help (and tons of other benefits) by registering your sole proprietorship with Ownr. Then it’s time to determine if you need to charge sales tax, and if so, sign up for a GST/HST number with Canada Revenue Agency.
After you’ve got all that set up and ready to go, you’ll be ready to focus on getting your new business off the ground. If you’re not sure where to start, using a business plan template can help to point you in the right direction.
Whether you choose to register a sole proprietorship or incorporate your business, Ownr is here to help with every step along the way.
Launch your business starting at $49
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.