To Start A Business In Ontario, keep in mind that all businesses whether large or small, are subject to laws and regulations in Ontario. You are required to register your business name within 60 days before opening in Ontario. This does not apply when you use your own name for the business. If any other word is added to your business name, then you are required to register it.
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Legal Forms of Business
You must decide the lagal form of business you want to embark on. These are:
- Sole proprietorship
This is the simplest legal form of business. When you start operations and selling your product or service, you are known to be a sole proprietor. As such, you are the business – that is, you are not an employee of the firm. The net income of the business becomes your net income which is now added to your personal income. A sole proprietorship is responsible for all debts accrued, and the business automatically ceases to exist when the owner decides to abandons it. It is a one man business.
This is a sole proprietorship that is divided among 2 or more principal business owners. It is important to remember that any debt incurred by 1 partner on behalf of the business will be affected by the other partner.
This is a legal form of ownership that requires more detailed legal filings. This creates an independent entity that is separate from the “shareholders” or owners. Theowner is paid with dividends or shared profits, and/or as an employee.
The major advantages of incorporation are:
- A corporation have the right to issue shares thereby raising capital.
- In most cases, an owner is indemnified or protected against corporate debt or liabilities.
- Incorporation may enhance the image of the firm or may be customary in the relevant industry. For example, it is mandatory in order to secure government contracts.
- Income tax advantages may also occur at specific levels of net income.
- Cost of set up: About $150 – $400.
- Higher administrative costs
There is a regulated workplace insurance system where employees who get injured on the job are protected in Ontario, administered by the Workplace Safety and Insurance Board (WSIB). Also, employers are protected against lawsuits by workers who are injured. Employers are required to pay an insurance premium on behalf of these employees.
Municipal Zoning and Licensing
Most but not all types of businesses need a municipal licence. If you plan to open a business, you may need a municipal business licence. Municipalities are responsible for issuing licences to the following types of business and trades:
- Transport businesses, such as driving school instructors, catering truck owners, taxi owners
- Another type include stationary businesses, such as bowling allies, parking lots, pet shops, drug stores
- Other professions and trades, primarily plumbing, heating, and electrical contractors
You can also see some tips on how to start a restaurant business in Canada.