How to Register Business and Business Name in Canada?
Sole Proprietorship, Partnership, or Corporation
Once you have decided on the business structure that best fits your needs, the next critical step is business registration. Depending on your structure and activities, you may also need to obtain specific licenses, permits, or tax accounts to operate legally under federal, provincial, or municipal regulations. Failure to register when required can result in penalties, fines, and legal complications.
Business registration may involve:
- Registering a business name for a sole proprietorship or partnership
- Incorporating your business federally or provincially
- Registering with the Canada Revenue Agency (CRA) for GST/HST or other program accounts, when applicable
Understanding what registration applies to your situation is essential to remaining compliant from the start.
Can You Operate a Business Without Registering?
In limited circumstances, only sole proprietors may operate without registering a business name. This is permitted if:
- The business operates under the owner’s legal personal name, and
- Annual taxable revenues are below $30,000, meaning GST/HST registration is not yet required.
However, once a sole proprietor exceeds $30,000 in taxable sales, leases, or other supplies within a 12-month period, GST/HST registration with the CRA becomes mandatory. At that point, the business must begin collecting and remitting sales tax, regardless of whether a business name is registered.
A. Registration for Sole Proprietorships and Partnerships (Ontario)
If you choose to operate under a business name, registration is required. In Ontario, this process is completed through the Ontario Business Registry.
Step-by-Step Overview
- Choose a business name and identify your primary business activity (NAICS code).
- Search the Ontario Business Registry to confirm that your desired business name is available.
- Register the business online, in person, or by mail through Service Ontario.
To complete the registration yourself, you must:
- Create a ONE-Key account
- Register for a Service Ontario account
- Submit the business registration application
Once approved, you will receive a Certificate of Business Registration, which includes a Business Identification Number (BIN).
Important Note:
The Ontario Business Identification Number (BIN) is different from the CRA Business Number (BN). The BIN is issued by Service Ontario for provincial identification, while the BN is issued by the CRA for tax and program account purposes.
B. Registration for Corporations
Businesses may incorporate either provincially or federally and can be registered as either a named corporation or a numbered corporation.
Provincial vs. Federal Incorporation
Provincial Incorporation
- Business name protection applies only within the province
- Additional registrations may be required to operate in other provinces
Federal Incorporation
- Business name protection applies across Canada
- Extra-provincial registration is still required in the province where the business operates
- Governed by Corporations Canada
For example, an Ontario business that incorporates federally must register both with Corporations Canada and the Province of Ontario.
Named vs. Numbered Corporations
There is no legal difference between a named corporation and a numbered corporation. The choice depends primarily on branding and operational preferences.
Named Corporation
A named corporation is ideal if your business:
- Deals directly with the public
- Focuses on a specific product or service
- Intends to build a recognizable brand
Example: Diamond Tax Corporation
All named corporations must include a legal suffix such as Inc., Ltd., Corp., or Corporation. The suffix selected has no legal impact beyond indicating corporate status.
To register a named corporation, you must complete a NUANS name search to ensure the proposed name is not confusingly similar to an existing business name.
Numbered Corporation
A numbered corporation is often suitable when branding is not a priority. Advantages include:
- No name search requirement
- Faster incorporation process
The government automatically assigns a name consisting of a number and legal suffix, such as:
- 1234567 Ontario Inc.
- 1234567 Canada Inc.
If you later decide to change a numbered corporation to a named one, this can be done by filing Articles of Amendment and paying the applicable fee.
Setting up a Corporation
- Ontario corporations are incorporated electronically through authorized Service Providers contracted by the Ministry of Government and Consumer Services.
- Federal corporations are incorporated through Corporations Canada.
After incorporation, you must obtain a CRA Business Number (BN) to register for tax program accounts such as GST/HST, payroll deductions, or corporate income tax, as well as any additional licenses required to operate.
Final Considerations
Choosing the appropriate type of business registration involves significant legal, tax, and reporting considerations. Making the wrong decision can lead to unnecessary costs, compliance issues, and administrative challenges.
For this reason, it is strongly recommended to consult with a qualified professional before proceeding. Diamond CPA PC can help you assess your unique situation, ensure compliance, and guide you through the registration process with confidence.
Disclaimer
The information provided in this article is for general informational purposes only and does not consider your individual circumstances. It should not be relied upon without consulting a qualified accounting professional. Diamond CPA PC is not responsible for any issues arising from the use of this information.