CALL US

Tel: 647-668-9363

EMAIL US
VISIT US

Kitchener - Waterloo

  • Simply Bookkeeping Facebook Icon
  • Simply Bookkeeping LinkedIn Icon
  • Simply Bookkeeping Twitter Icon
  • Simply Bookkeeping YouTube Icon
  • Simply Bookkeeping Google+ Icon

© 2017-2023 All Rights Reserved - Simply Bookkeeping - Privacy Policy

Please reload

Recent Posts

I'm busy working on my blog posts. Watch this space!

Please reload

Featured Posts

Starting a Business: Part 4 of 6 – How to Set Up Different Types of Businesses in Ontario

If you’ve been following along our thread of posts about the most common types of business organization and the advantages and disadvantages of each, hopefully you have an idea of which type of business structure is right for you. In this post we describe the steps you need to take to start each of the different business types and to provide some helpful resources along the way.

 

Please note that this information pertains to setting up the different types of business organization in Ontario. While other provinces in Canada have similar processes and requirements, there are some differences in some provinces that must be considered. Also, please note that the information contained in this blog post is only presented as summary information and is not intended as legal advice – please consult your lawyer to learn more about setting up different types of business organization.

 

How to Set Up an Unincorporated Sole Proprietorship in Ontario

If you simply want to start doing business under your personal name, you don’t need to do anything – just get out there and start drumming up business! When you invoice your customers and clients, do so using your personal name. When you purchase the products and services you need to run your business, also do so in your personal name. At the end of the personal tax year you need to include the revenues and expenses from your business on your personal income tax return and pay the appropriate personal income taxes.

 

If you want to have a name for your business that is anything other than your personal name, you must register the name. Even if you want to use an extension of your name (i.e. John Doe & Company) you must register a business name. Before you can register your business name you must check that the business name that you want to use does not already exist – while you can legally use a business name that is already registered, doing so can expose you to legal action by the company who had previously registered the name, especially if you have a similar business to that company. Also, be sure to check variants of the name you wish to use (don’t try and register Samsang if you are going to manufacture electronic devices, for example) and be sure to stay away from trademarked names.

 

Research and register a business name in Ontario by visiting ONe-Source for Business, a resource provided by ServiceOntario.

 

How to Set Up an Unincorporate Partnership in Ontario

Unincorporated partnerships are similarly easy to set up like sole proprietorships. Like with a sole proprietorship the business is an extension of the individuals and business revenue and expenses are claimed at the end of the personal tax year by the partners.

You do not have to have a legal partnership agreement if you are involved in a partnership but it is strongly recommended: in some types of partnerships all partners are equally liable and responsible for the actions taken by any one of the partners on behalf of the business, so having a legal agreement in place would certainly help protect against this.

You can register a partnership by completing a Declaration – Form 3 under Limited Partnerships Act and register the name of the business at ONe-Source for Business.

 

How to Set Up a Corporation in Ontario

When setting up a corporation you have to make a clear distinction of whether you want to incorporate provincially (in Ontario) or federally (throughout Canada).

 

Incorporating a business is more complicated as you are creating a new legal entity that pays taxes, can be sued and has other financial and legal responsibilities. It is a good idea to get professional legal advice while incorporating a company to make sure you fully understand the implications of incorporating a new business.

 

A lawyer will usually take care of all of the details of incorporating a company, but if you choose not to do it yourself here is what is involved. To incorporate in Ontario you’ll need articles of incorporation and optionally a business name search. You don’t have to have a business name if you don’t want one – if you don’t want a business name then the government will assign your new corporation a number. There are a number of cases where people wouldn’t want to use a company name, but the most common is for holding companies.

 

There is a long way and a short way to register a corporation. The long way is to complete the Form1 – Articles of Incorporation, do a name search if you want a company name, and then either mail your corporation application to ServiceOntario or visit one of their service centers. The faster way is to use a registered service provider like OnCorp Direct. Through the OnCorp Direct website you can file your articles of incorporation, perform a name search and register your corporation.

 

Once your corporation is registered you will receive a business number and the related documentation that you need to operate your new company. You’ll need your business number when dealing with the government on things like HST returns, corporate income tax filing and payroll source deductions.

 

How to Set Up a Cooperative in Ontario

The Financial Services Commission of Ontario (FSCO) oversees the registration and compliance of co-operatives. All co-operatives are governed by the Co-operative Corporation Act but some sectors are also governed by other acts as well.

 

In a standard co-op you need five members to incorporate. In worker co-ops you need three members to incorporate. As with the other types of business you complete articles of incorporation and then submit them to the Credit Unions and Co-operatives Branch section of the FSCO. When incorporating a co-operative you have to decide whether your co-operative will issue shares (completing your articles of incorporation with or without share capital as appropriate) and the details of financing.

 

As with incorporating a corporation, there are many important legal considerations when incorporating a cooperative so it is usually a good idea to seek professional legal advice and assistance.

 

Conclusion

If you’re starting a new sole proprietorship then you can start your business as soon as you want – you don’t need to register anything. If you’re starting a partnership then you need to register the partnership under the Limited Partnerships Act, if you’re incorporating a corporation then you need to file articles of incorporation, and if you’re incorporating a cooperative then you need to register with the Financial Services Commission of Ontario. For all of these types of businesses you can go with a business name as long as you do a business name search but you don’t have to have a business name in all cases.

 

Please check back for the next article in this series about starting a new business in Ontario focuses on which professionals you should have on your business management team.

 

Simply Bookkeeping1 provides professional bookkeeping services for freelancers, solopreneurs and owners of unincorporated and incorporated businesses. We customize our services based on your needs – we only see some of our clients a few hours a month but others we see on a more regular basis. Our services are reasonably priced and we tightly track the amount of time we spend working for you so you only pay for the services you get.

 

To learn more about us, please visit our website at www.simplybookkeeping1.com or contact Michele Hyde by phone at (647) 668 – 9363 or by email at michele@simplybookkeeping1.com.

 

Have Your Say

If you’re thinking of starting a new business but you’re not sure which structure is best for you, we’d love to hear from you. Tell us what’s on your mind and share your thoughts! Also, please share this article using the social media share buttons – chances are there are others out there wrestling with the same decisions!

Share on Facebook
Share on Twitter
Please reload

Follow Us