How To Start A Business- Registration Process

Differences Between Sole Proprietor, Partnership and Corporation.

Sole Proprietorship

A sole proprietorship is the simplest business structure, where one person owns and runs the business. It is easy and inexpensive to set up, and the owner has full control over decision-making.

Additionally, taxes are simple since profits are taxed as personal income.

However, a major drawback is unlimited liability, meaning the owner is personally responsible for business debts. It can also be challenging to raise capital since funding options are limited.

If the owner leaves or passes away, the business typically dissolves.

Best for: Freelancers, and independent contractors.

Partnership

A partnership is a business owned by two or more people who share profits, losses, and responsibilities.

Partnerships make it easier to raise capital since multiple owners can invest. Responsibilities are shared, making management more balanced. Taxes are also simple, as profits are passed through to partners’ personal income.

On the downside, general partners have unlimited liability, meaning their personal assets could be at risk. Disagreements between partners can also pose challenges. If a partner leaves, the business structure may need adjustments.

Best for: Law firms, medical practices, and family businesses.

Corporation

A corporation is a business that exists as a separate legal entity from its owners (shareholders). This provides limited liability, meaning owners are not personally responsible for business debts. Corporations also have an easier time raising capital since they can issue stock, and the business can continue operating even if an owner leaves.

Best for: Large businesses, startups seeking investors, and companies with high liability risks.

How to register your business through the Government of Ontario.

1. Go to the Ontario Business Registry website.
2. Sign in using a My Ontario Account or create one if you don’t have it.
3. Select “Register a Business” and choose the type of business you want to register.
4. Enter the required personal and business information, including the name, address, and business activities.
5. Review and confirm details before proceeding to payment.
6. Pay the registration fee (fees vary depending on the business type).
7. Submit your registration and receive your Business Identification Number (BIN) and confirmation email.

**Please note that you will have to renew your registration every 5 years.**