Starting a business in Ontario can be an exhilarating and rewarding journey. Whether you’re an entrepreneur with a groundbreaking idea or an experienced professional ready to explore new avenues, understanding the steps and procedures involved is essential to your success. If you want to learn how to start a business in Ontario, this article is for you. Keep reading to discover the 11 essential steps you must take.

What is a Small Business vs. Corporation?

Before diving into the steps, it’s important to distinguish between a small business and a corporation. A small business is typically a sole proprietorship or partnership, whereas a corporation is a separate legal entity.

Small businesses are owned by individuals or a group of individuals, while corporations are owned by shareholders. In this article, we’ll focus on how to start a small business in Ontario.

​​Who Can Own a Small Business in Ontario?

One of the advantages of starting a small business in Ontario is that anyone can do it. There are no restrictions based on citizenship or residency, making it an inclusive environment for entrepreneurs from all backgrounds.

Whether you’re a Canadian citizen, permanent resident, or a foreign national, you too can own and operate a small business in Ontario!

How to Start a Business in Ontario

Starting a business in Ontario requires careful planning and execution. In this section, we will outline the essential steps you need to take.

Step 1. Conduct Market Research

Before diving into the business setup process, it’s essential to conduct thorough market research. This involves analyzing the market demand, competition, target audience, and potential profitability of your business idea.

Understanding the market landscape will help you make informed decisions and increase your chances of success.

Step 2. Write a Business Plan

Business Plan Graphic

Writing a well-crafted business plan is vital for outlining your business objectives, strategies, and financial projections. It acts as a roadmap and provides clarity on how you’ll operate and grow your business. A comprehensive business plan is often required when seeking financing or partnerships.

Step 3. Choose a Business Structure

Types of business structures in Ontario

Selecting the right business structure is essential for legal and tax purposes. In Ontario, common business structures include sole proprietorships, partnerships, co-operatives, and limited liability corporations (LLCs).

Selecting the right business structure is essential for legal and tax purposes. In Ontario, there are several common types of business structures to consider:

  1. Sole Proprietorship: A sole proprietorship is an unincorporated business owned and operated by a single individual. It offers simplicity and full control over business decisions, but the owner assumes personal liability for the business’s debts and obligations.
  2. Partnership: A partnership is a business structure in which two or more individuals share ownership and responsibility. It can be a general partnership, where all partners have equal liability, or a limited partnership, where there are both general partners and limited partners with restricted liability.
  3. Co-operative: A co-operative is a business owned and controlled by its members, who pool resources and share profits and decision-making authority. Co-operatives are typically formed to meet the specific needs of the members and operate based on democratic principles.
  4. Limited Liability Corporation (LLC): A limited liability corporation, also known as a corporation or a company, offers limited liability protection to its owners, known as shareholders. This means that shareholders’ personal assets are generally protected from the debts and liabilities of the business. Corporations have a more complex structure and require formalities such as holding shareholder meetings and maintaining corporate records.

Each structure has its advantages and considerations, so it’s recommended to consult with a legal professional or accountant to determine the most suitable option for your business.

Step 4. Register Your Business Online

Ontario Business Registry

Registering your business is a legal requirement in Ontario. The process can be done online through the Ontario Business Registry. You’ll need to provide details such as your business name, structure, and address. Registering your business ensures its legal recognition and helps protect your brand.

Here’s how to register a small business in Ontario:

  1. Choose a business name: Ensure it’s unique and doesn’t infringe on existing trademarks.
  2. Register your business name: This can be done through the Ontario Business Registry.
  3. Obtain a Business Number (BN): This unique identifier is required for tax purposes and can be obtained from the Canada Revenue Agency (CRA).
  4. Register for a Harmonized Sales Tax (HST) account: If your business is expected to earn over $30,000 in annual revenue, you’ll need to register for an HST account with the CRA.

Step 5. Obtain Licenses and Permits

Next, you need to know how to apply for a business license in Ontario. Depending on your industry and business activities, you may need to obtain specific licenses and permits to operate legally.

The types of licenses and permits required vary, so we advise you to consult with the Ontario government’s official website to ensure compliance.

Step 6. Apply for GST/HST

If your business is registered for HST, you’ll need to charge and collect the applicable taxes on your products or services. It’s important to understand the rules and regulations surrounding GST/HST to fulfill your tax obligations accurately.

Step 7. Open a Business Bank Account

Separating your personal and business finances is crucial for effective financial management. Open a dedicated business bank account to handle your business transactions, track income and expenses, and simplify tax filing.

Step 8. Consider Business Insurance

Protecting your business from potential risks and liabilities is essential. Depending on the nature of your business, it may be prudent to obtain business insurance coverage. Consult with an insurance professional to assess your specific needs and find suitable coverage options.

Step 9. Get Funding and Support

Securing funding and seeking support can give your business a significant boost. Explore government grants, loans, or venture capital options available for entrepreneurs in Ontario.

Additionally, consider reaching out to small business support organizations or local business development centers for guidance and resources.

Step 10. Purchase a Domain and Set Up Social Media

google my business profile

Establishing an online presence is crucial in today’s digital age. Purchase a domain name for your business and set up a professional website. Additionally, create social media accounts to connect with your target audience, increase brand visibility, and promote your products or services effectively.

Step 11. Build Your Brand Presence

Developing a strong brand presence is key to attracting customers and standing out in the market. Invest in branding efforts such as designing a logo, creating marketing materials, and implementing a consistent brand identity across all communication channels.

Conclusion: Kickstart Your Business

In conclusion, starting a business in Ontario requires careful planning and strategic decision-making. By following the steps we outlined in this guide and checking out our digital marketing articles, you can kickstart your business with confidence.

Remember to seek guidance from professionals by finding a Small Business Enterprise Centre near you. These centers provide valuable resources, workshops, and guidance to entrepreneurs at various stages of their business journey.

Originally published . Last updated .


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