How to Register a Business in Ontario?
Registering a business in Ontario is very easy when you have the right lawyer assisting you. One of the first things you will need to do is decide on the business structure that best suits your needs. We can help you choose the correct form of business (sole proprietorship, partnership, corporation) based on the number of people involved, the type of business, tax issues or liability concerns, and financial requirements. We will also register your business in Ontario for you. Pawlina Law can ensure your business is properly registered in Ontario Recently, our principal lawyer (Karol Pawlina) spoke at the annual Ontario Legal Conference ran by the Ontario Bar Association on Advising on the Right Business Structure for your Clients.
We can also help you draw up the necessary legal documents that set out the terms of any partnership or other shared ownership. These legal documents will provide your business with the necessary certainty to allow you to grow and prosper. This will also help ensure that all parties will be treated fairly, and that there is a mechanism for handling any disputes or disagreements. The government of Canada has provided some useful information here on choosing a business structure,
What Sole Proprietorship?
Whenever someone beings operating a business, they become a sole proprietor. Depending on how you operate, what you do, and what name you operate under, you may need to register your sole proprietorship. Registering a business name in Ontario is very easy. Both Corporations and individuals can register business names. More information on how to use business names in commerce is available here. For the purposes of registering a business in Ontario, business name registration will be key step for a person. However, a corporation will need to incorporate before filing a business name registration.
The Ministry of Government and Consumer services registers business names in Ontario. Registering a business name in Ontario is not incorporation. It is also not a trademark. Rather, it just provide notice to the public that there is an business entity or person consulting business under that name. Registering a business name in Ontario is legally required to comply with the law.
Moreover, depending on how much revenue you generate in given year, you may also need to register for HST. Pawlina Law can advise you on what you need to do to comply with business regulations in Ontario.
Partnership
A partnership exists if there is a relation that subsists between persons carrying on a business in common with a view to profit. There are three types of partnerships in Ontario, a general partnership, a limited liability partnership and a limited partnership. If there is a partnership, the provisions of the Partnerships Act (Ontario) would govern the relationship between the business partners. Some provisions of the Partnerships Act (Ontario) can be varied by a partnership agreement, which is a contract between partners that lists the rights and responsibilities of the partners. Although typically written, a partnership can be an oral agreement. Again, on how you operate, what you do, and what name you operate under, you may need to register your partnership.
Pragmatically speaking, unless there is a tax, finance, or regulatory reason for operating as a partnership, one should avoid the use of a partnership. Depending on how a partnership operates, it may need to register their business in Ontario.
Registering a Corporation in Ontario
Incorporation is the creation of a Corporation. Corporations aggregate are by far the most common and important form of business organization in modern Canadian society. They range in size from small corporations, with a single shareholder, no employees and nominal capital, to huge multinational enterprises with hundreds of thousands of shareholders and employees, and issued capital in the billions of dollars.
There are a lot of different types of corporations, including of a For-Profit, Not-For-Profit, Co-operative and Professional Corporations. Incorporation can be done at the federal or provincial/territorial level using the Ontario Business Corporations Act (the “OBCA“) which is administered by the Ministry of Government and Consumer Services and the Canada Business Corporations Act (the “CBCA“) which is administered by Corporations Canada. More information on choosing a jurisdiction can be found here.
When you incorporate your business, it is considered to be a legal entity that is separate from its shareholders. Moreover, the share structure of a corporation could also have tax implications. As a shareholder of a corporation, you will not be personally liable for the debts, obligations or acts of the corporation. It is always wise to seek legal advice before incorporating. Pawlina Law can advise you on whether to pursue incorporation, how to structure your share provisions and all other aspects of incorporation. Unlike other incorporation services, we focus on Corporate Law.
Extra-Provincial Registration in Ontario
The Extra-Provincial Registration system in Canada is extremely confusing. Unless you business is incorporated in a specific province, it will need to register in that province to do business. This includes federal Canada Corporation. To ensure maximum confusion, the definition of business varies by province. In Ontario, the Extra-Provincial Corporations Act, R.S.O. 1990, c. E.27 sets out the framework for registering your business corporation in Ontario. Section 1 provides the following definition as to what it means to carry on business in Ontario. For the purposes of this Act, an extra-provincial corporation carries on its business in Ontario if,
- (a) it has a resident agent, representative, warehouse, office or place where it carries on its business in Ontario;
- (b) it holds an interest, otherwise than by way of security, in real property situate in Ontario; or
- (c) it otherwise carries on its business in Ontario.
If you have a non-Ontario corporation and wish to carry on business in Ontario. You must register your business in Ontario. Pawlina Law can assist you in navigating this confusing landscape.