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Registering a Sole Proprietorship or Partnership

by Susan Ward

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Ontario is a great place to start a business. For one thing, Ontario currently has the lowest provincial taxes in Canada. For another, the province makes it easy to find and access the information you need to legally set up your business.

To set up a sole proprietorship, a partnership, or a Limited Liability Partnership in Ontario, just follow these steps. (Currently, only chartered accountants and law firms can form a Limited Liability Partnership.)

1. Choose a name for your business.
You may operate a sole proprietorship using your own name, with no additions. If you choose to do this, you don't need to register your business' name. If you call it anything else, however, your business name must be registered with the Companies Branch of the Ministry of Consumer and Business Services. So if I set up my business as a sole proprietorship and do business under the name "Susan Ward" I don't need to register it. If I want to use the name "Susan Ward & Sons" or "Ward's Word Emporium", then I need to register it.

Under Ontario's Business Names Act, fines of up to $2,000 can be levied against individuals and up to $25,000 for corporations for failure to register or for registering false or misleading information. So even though registering the name of your business doesn't give exclusive use of the name, you can see that it's worth your while to register it.

Besides being sure that you choose a business name for your sole proprietorship that sounds and looks good and will draw the proverbial horde of customers or clients, you also need to choose a business name that is acceptable to Companies Branch. Certain words or expressions are prohibited.

For instance, you can't use words that imply incorporation, such as Limited or Inc., or words that imply the business is associated with any branch of government. "A Guide to Registering Your Business Name in Ontario" provides all the details about which words or expressions can't be part of the name of your sole proprietorship.

2. Conduct a search or searches for your chosen business name (and/or similar names) to see if any other business is using the name you've chosen.

Business name registration is no guarantee of exclusivity. (Business name protection is provided by a trademark, not by name registration.) The Business Names Act doesn't prohibit the registration of identical names, so you could register a business name that another company is already using. If you do, or if you register a name that's confusingly similar, a lawsuit could result so it's a good idea to conduct a search to see if anyone else is using the name you want. There are several different search options you may wish to pursue. Each name search will cost you $8 to $12, depending on where and how you conduct the search.

Searching the business names public record at the Companies Branch (located on the second floor at 375 University Avenue in Toronto) will tell you if someone is already using the name you have selected and where that business is located, although it will not show variations of business names or corporation names. You can also browse through the Electronic Corporate Index while you're at the Companies Branch, or request a corporate search.

You can also search online through OnCorp Direct Inc. or Cyberbahn Inc.; both of these corporations are Primary Service Providers under contract with the Ministry of Consumer and Business Services.

You may also want to get a NUANS report. NUANS (New Upgraded Automated Name Search) is a Canada-wide corporate and business name registry. A NUANS search will display corporations, business names and trademarks which are similar to the name you have searched. To search NUANS, you will need to contact a private service provider (listed in the Yellow Pages under "Searchers of Records") as the Companies Branch does not provide these.

3. Register your business name.
You will need the name and address of the business, a description of the business activity that will be performed, and your name and home address. (You must have an address where legal papers can be served; a post office box is not acceptable.) If you're registering the name of a partnership with ten or fewer partners, you must include the names and home addresses of all the partners.

In Ontario, registering the name of your business is easy because you have so many different access options. For instance, you can register your business name through the public office of the Companies Branch in person or by mail. (Forms are available from the branch or at local Land Registry Offices across the province.) The fee for registering a business name by mail or in person at the Companies Branch is $80. If you register in person, you'll receive your Master Business License (proof of business name registration) immediately; if you register by mail, you'll receive it in 6 to 8 weeks.

You can also register your business name at any of the Ontario Business Connects Workstations. This page provides the locations of workstations across the province.

Or register online at the Ontario Business Connects Web site. Whether you register your business name at a workstation, or via the Web site, the fee is the same; $60. The difference is in the time it takes to complete the procedure and get your Master Business License. If you register through the Web site or at an internet-based workstation, you'll receive your Master Business License in the mail in 2 weeks; if you register at a dedicated workstation, you'll get your Master Business License on the spot. When you register your business name via Ontario Business Connects, you can also complete forms electronically for the Retail Sales Tax Vendor Permit, Employer Health Tax, and the Workplace Safety and Insurance Board.

You may also register your business name at a Local Tax Service Office through CCRA's BRO (Business Registration Online) service. The advantage to doing this is that you can also register for other CCRA accounts you may need, such as GST/HST registration or Payroll Deductions.

4. Register for whatever other licenses, registrations, or certifications you require to legally operate your business. You may also need a business license, depending on the type of business you're running. And you have to run your business according to provincial and federal laws, which means you may need to register for Workers' Compensation insurance, or collect GST/HST. This Start Up Checklist from Canada Business Service Centres is a good starting point for figuring out which regulations will apply to you. You can also find more information at The Canada-Ontario Business Service Centre Web site.

5. Upgrade/renew your business name registration as required. A business name registration must be renewed every 5 years. The Companies Branch doesn't send out reminder notices; re-registering is your responsibility. If your business name or business ownership changes at any time, you must re-register your business name (and pay the registration fee once again).